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Yes and no. Executive compensation, from one perspective, is the mechanism via which shareholders align executive behavior in their favor, to the detriment of w
by ethbr1 1y ago
Yes and no. Executive compensation, from one perspective, is the mechanism via which shareholders align executive behavior in their favor, to the detriment of workers.
- WalterBright 1y agoWorker pay is determined by the Law of Supply & Demand, not by the amount of executive pay. I.e. worker pay is determined by the minimum wage the worker will accept and the maximum wage the company is willing to pay. The latter figure is based on the value the worker will provide. Executive compensation is not part of that equation.
- skylurk 1y agoFarmers in poor countries will plant low-yield traditional varietals, even when a high yield option is available. They might have twice the yield with the new varietal, but if their crop fails: they risk destitution and might even loose their land. So they rationally choose the proven lower-yield varietal. Their risk appetite is proportional to their savings, if they have any. A catch-22. For low wage workers in America, is it that much different? So many people stay in badly paying jobs because if they loose access to health insurance they could loose their home. Or get sued over a non-compete they cannot afford to fight. Seems like below some threshold of wealth, supply and demand don't apply anymore. People are forced to choose the least risky option.
- ethbr1 1y agoIn addition to the modern US structural labor concerns sibling highlighted, > the maximum wage the company is willing to pay This is the primary method I was thinking of. A company/CEO has a variety of reasons for paying its labor more than the minimum (retention, moral belief, working next to colleagues, etc). Shareholders really only have executive comp (and its structure) to discourage CEOs from paying labor more than the minimum necessary.