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Inequity is a real thing, but I am confused about why the CEO of a company that consists primarily of low wage earners deserves a lower compensation for that re

Inequity is a real thing, but I am confused about why the CEO of a company that consists primarily of low wage earners deserves a lower compensation for that reason alone. If you follow this logic to extremes, the compensation of a CEO of a company of a dozen people earning 100,000 should be higher than one with with tens of thousands of employees earning 30,000. Not all businesses are the same.

cammikebrown 1y ago
Even $30,000 is below minimum wage full time on the west coast. You’re not gonna be doing well at all making that.
- yieldcrv 1y ago
  which neither bolsters or negates the point.
tw04 1y ago
What’s the motivation of the CEO to increase employee wages if his compensation isn’t tied to theirs? There’s this perverse belief that companies should exist to enrich the wealthy shareholders at the expense of the workers and it’s put us dangerously close to a complete collapse of the social contract.
- slashdave 1y ago
  The motivation? A healthy and productive workforce. The greater good. Not sure why you would tie pure compensation (a greedy concept) with goals that align exactly to the opposite.
  - danny_codes 1y ago
    People who become CEOs tend not to care about other people. Sort of a prerequisite to the job in a lot of cases. See that UHC guy as a prime example.
  - stemlord 1y ago
    >The motivation? A healthy and productive workforce. The greater good. This is so outrageously naive
- whimsicalism 1y ago
  > What’s the motivation of the CEO to increase employee wages if his compensation isn’t tied to theirs? To pay the asking price for the needed labor?
- koolba 1y ago
  > What’s the motivation of the CEO to increase employee wages if his compensation isn’t tied to theirs? Wages are a cost. Profits are revenue minus costs. Share price is driven by profits. The job of a CEO is to maximize share price. The only reason to raise wages is if you think it will lead to a net gain of profit during your tenure. Say do to efficiency or simply retaining better talent. There’s no gain for simply raising employee wages. Quite the opposite.
  - tw04 1y ago
    >The job of a CEO is to maximize share price. It absolultely is not. That was an idea floated by Milton Friedman, and he was wrong with his ridicluous assertion. His justification wasn't even legally sound... https://www.forbes.com/sites/stevedenning/2013/06/26/the-origin-of-the-worlds-dumbest-idea-milton-friedman/ https://www.forbes.com/sites/stevedenning/2013/06/26/the-ori... A CEOs job is to grow market share, increase the value of the company, and tend to its long-term health. All of which directly conflicts with "maximizing the share price" as we've seen time and time again with the corporate raider class.
    - hollerith 1y ago
      What is the difference in your mind between maximizing share price and "increase the value of the company"?
      - slashdave 1y ago
        Why do you equate the intrinsic value of a company directly to its share price?
        whatevaa 1y ago
        For shareholders that's that it is.
        hollerith 1y ago
        The beauty of share price and market cap (share price times total number of shares) is how easy it is to determine. How is this "intrinsic value" determined?
Aunche 1y ago
> I am confused about why the CEO of a company that consists primarily of low wage earners deserves a lower compensation for that reason alone If you're looking for an economic reason, there isn't any. Politics in the US has always been moralistic since the days of the Puritans, so people prefer moralistic "solutions".

cammikebrown 1y ago

Even $30,000 is below minimum wage full time on the west coast. You’re not gonna be doing well at all making that.

yieldcrv 1y ago
which neither bolsters or negates the point.

tw04 1y ago

What’s the motivation of the CEO to increase employee wages if his compensation isn’t tied to theirs? There’s this perverse belief that companies should exist to enrich the wealthy shareholders at the expense of the workers and it’s put us dangerously close to a complete collapse of the social contract.

slashdave 1y ago
The motivation? A healthy and productive workforce. The greater good. Not sure why you would tie pure compensation (a greedy concept) with goals that align exactly to the opposite.
- danny_codes 1y ago
  People who become CEOs tend not to care about other people. Sort of a prerequisite to the job in a lot of cases. See that UHC guy as a prime example.
- stemlord 1y ago
  >The motivation? A healthy and productive workforce. The greater good. This is so outrageously naive
whimsicalism 1y ago
> What’s the motivation of the CEO to increase employee wages if his compensation isn’t tied to theirs? To pay the asking price for the needed labor?
koolba 1y ago
> What’s the motivation of the CEO to increase employee wages if his compensation isn’t tied to theirs? Wages are a cost. Profits are revenue minus costs. Share price is driven by profits. The job of a CEO is to maximize share price. The only reason to raise wages is if you think it will lead to a net gain of profit during your tenure. Say do to efficiency or simply retaining better talent. There’s no gain for simply raising employee wages. Quite the opposite.
- tw04 1y ago
  >The job of a CEO is to maximize share price. It absolultely is not. That was an idea floated by Milton Friedman, and he was wrong with his ridicluous assertion. His justification wasn't even legally sound... https://www.forbes.com/sites/stevedenning/2013/06/26/the-origin-of-the-worlds-dumbest-idea-milton-friedman/ https://www.forbes.com/sites/stevedenning/2013/06/26/the-ori... A CEOs job is to grow market share, increase the value of the company, and tend to its long-term health. All of which directly conflicts with "maximizing the share price" as we've seen time and time again with the corporate raider class.
  - hollerith 1y ago
    What is the difference in your mind between maximizing share price and "increase the value of the company"?
    - slashdave 1y ago
      Why do you equate the intrinsic value of a company directly to its share price?
      - whatevaa 1y ago
        For shareholders that's that it is.
      - hollerith 1y ago
        The beauty of share price and market cap (share price times total number of shares) is how easy it is to determine. How is this "intrinsic value" determined?

Aunche 1y ago

> I am confused about why the CEO of a company that consists primarily of low wage earners deserves a lower compensation for that reason alone If you're looking for an economic reason, there isn't any. Politics in the US has always been moralistic since the days of the Puritans, so people prefer moralistic "solutions".