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Perhaps not costly, but definitely cumbersome. What's more, it will have the opposite consequence. In his book "Influence", Robert Cialdini wrote that making C
by putlake 12y ago
Perhaps not costly, but definitely cumbersome.
What's more, it will have the opposite consequence. In his book "Influence", Robert Cialdini wrote that making CEO pay public had the effect of raising exec pay across the board rather than check it, as the lawmakers had hoped.
- seunosewa 12y agoIsn't CEO pay of public companies already public? If so, the ratio would merely disclose the median employee's salary level.
- lotsofmangos 12y agoI can't see how it would be that cumbersome, calculators are lightweight, widely available and easily fit in a pocket. The thing about CEO pay rising after the information was made public was because it became a metric used by traders, so it started making financial sense to raise the CEO pay as it was thought to raise the company share price by more than the wage increase. Of course this only works until someone matches your raise, then you have to raise again to keep the signaling going to the market and then the returns from this strategy rapidly diminish. Now if the ratio was also public, then that would also become a market signal, but if you are a trader trying to gauge the health of a company then it should work in the favour of the employees, as if you are comparing two competing companies and trying to decide which one to bet on, if the CEO pay is the same and they are making similar profits, then the one with a smaller ratio will look like a much better bet. edit - also, given that publicising CEO compensation can increase CEO compensation, why do you think that publicising employee compensation would reduce employee compensation?
- ptaipale 12y agoCalculators are lightweight, but to decide which five digits to punch into the calculator, you might need to hire both an accountant and a HR lawyer.
- lotsofmangos 12y agoAny company large enough to make this in anyway confusing has several of those on staff already.
- ptaipale 12y agoDoing nothing? Most likely they are already busy with something, and adding this means more resources and cost to produce reports for the government.
- lotsofmangos 12y agoIf accounts and HR do not have the figures of what employees are paid already in a spreadsheet somewhere, in a form that is easy to run statistics on, then you have larger problems than producing reports for government. And given you have not answered, why do you think that publicising employee compensation would reduce employee compensation? You seem to be using the logic that the government tried something once and it did the opposite, so therefore all government policies do the opposite, rather than engaging with the potential outcomes of this specific idea.
- ptaipale 12y agoAs explained elsewhere, a figure of gross pay is definitely somewhere, but whether that is the figure required by law to be reported, and a figure that someone will think is what should honestly be reported, that's already another matter. I did not argue that publicising employee compensation would reduce employee compensation, that was someone else. Perhaps you confuse authors.
- lotsofmangos 12y agoyes, was confusing you with putlake, was tired, it began with a p and was about the same length, sorry.
- 12y ago
- spacemanmatt 12y agoI'm sure they can find some spare CPU power to tally up the CEO's earnings. I'll be glad to throw a Raspberry Pi in if it helps their cumbersome counting effort.