Why do American CEOs get paid so much?

BRAVE NEW WORLD?

Either you have a weird sense of humor or you are brain-dead.

Nobody living below the Poverty Threshold ($24K annual income) with four kids is laughing! From the Census Bureau here:

One in eight Americans means around 40 million of YOUR FELLOW YANKS live below the Poverty Threshold! That's equivalent to the entire population of California.

Adle-headed people like you who are utterly devoid of the Facts of Living Poor are the bane of America - and you are plenty disgusting.

And as for your above list, what is needed is to tax the piss-outta-them and put the money to work to make living in America worthwhile! Howzat? By means of a National Healthcare Service (that allows us a decent lifespan) and Free Post-secondary Education that permits an acceptable salary at the lowest income levels in this Brave New World of the Information Age ... !

 

You didn't answer the question. What's the value of the firm without workers? That question always gives the game away...

 

These big business elites are rapacious , omniscient monsters and don’t care
I do agree that the middle to lower guys get little

 

I own a tiny small business that is essential and I am still open in Vegas

 

Indeed. Large companies employ hierarchical practices which overinflate value of management.

 

FOOD FOR THOUGHT

It helps to define "little". I use the definition Poverty Threshold ($25K annual income for a family of four) to describe a fact of life. For a fourty-hour week that amounts to an hourly salary of $12/hour. The minimum wage is about half that. Who gets that wage? From here:

So, half a million workers earning $7.25/hour out of 80 million is "no big deal" - it is barely 0.7%. But how would YOU like to be one of them?

So, what is a decent minimum-wage? One that allows a family to work with dignity? That's a good question, and any correct answer is not $7.25 an hour! But more like double that amount.

BigBusiness is railing against such a wage-level at $15/hour - which is $3 more than the average today. But presume that this new Minimum Wage ($15/hour) were passed by Congress. What would happen?

This, I suggest:
*Tomorrow, heavy price-increases would incur as companies did so in order to at least "break-even". That is, avoid massive sales diminishing.
*Total Demand would likely drop for about 3-months as customers adjusted to the higher-costs. They would then come around to "normal buying-behavior" - as long as Total Demand remained near-normal. Profits would be lower because some (but not all) Demand would drop. It would also recover because spending-habits in general (for long as one is employed) will be maintained. (People get used to a better lifestyle regardless of price-increases - as long as the increases are not prohibitive.)
*Yes, general pricing in some - but not all - businesses would increase sharply. But Total Demand is unlikely to drop through the floor.
*Profits could be bent out of shape and it would take another 3/5 years for them to return to past levels. But, they would return as customers adapted to the new prices. Moreover, let us not forget that with additional revenue, a larger part of the workforce would have/enjoy higher spending-rates!
*Companies will try to recuperate profits by shipping more work abroad. But there is a limit (which has already passed) of reducing in-house labor-rates by means of imports.

Just some food-for-thought. Any and all comments regarding the above are welcome. But, as usual, I will not respond to asininities ...

 

Those opposed to corporate practices can always become minimalists and just not hardly buy any corporate products at all. Less is really more, for sure.

Problem solved.

 

You seem to be unaware that it is the shareholders' company, and the CEO is their employee.

 

Because, if they make a tiny mistake it costs millions of dollars.

 

Jared inherited most from his father

 

And he visited his father most weekends whilst "daddy" was in jail.

Like father, like son ... ?

 

No, it can't be hierarchy per se because Japanese companies are far more hierarchical, but their CEOs are paid two orders of magnitude less than American CEOs. It has to be institutional: tax laws, corporate governance regulations, etc.

Mainstream neoclassical economics cannot explain the inverse relationship between CEO pay and corporate financial performance. But as Peter deVries observed, "Whenever I see something that makes absolutely no sense whatsoever, I know there must be a damn good reason for it."

 

I'm not referring to Japan. I am referring to divide and conquer methods and how hierarchy is adopted to maximise wage-productivity gaps.

 

Because it disproves your claims. I know.

Which is factually incorrect, as Japan proves.

 

Nope, because its irrelevant to the point being made about the US

It is certainly the case in the US. Wage productivity gaps have gone hand in hand with overpayment of CEOs. This is expected, mind you, in neoliberalism.

 

No it isn't.

And these are both caused by hierarchy because....?

Oh, wait a minute, that's right: because Marx.

So, not connected to hierarchy at all, other than in your Marx-addled mind. Check.

 

You're maximising your incoherence. There isn't any Marxist specific analysis here (although it is true that Marx had a high powered understanding of property rights and therefore influenced managerial science). For example, the use of hierarchy is understood within internal labour markets (where human resource management, rather than economic efficiency criteria, determines wage and promotion outcomes). This of course also ensures a need for Anglo-Saxon economic distinction. The application of neoliberalism in labour markets, where labour rights are aggressively restricted in favour of labour market flexibility, corrupts wage norms and intensifies wage differentials. We see the consequence of that today, with essential workers typically paid below the living wage.

 

On your best day, you are less coherent than I am on my worst day.

No, Marx had zero (0) understanding of property rights, which is why he couldn't tell the difference between property that only enables the factory owner to offer the worker access to economic opportunity he would not otherwise have and property that only enables the landowner to deprive the worker of access to economic opportunity he would otherwise have.

And you accuse me of incoherence??

 

Churlish effort. Referring to Marx when its not Marxist analysis isn't really cunning. The existence of human resource departments ultimately demonstrates the nature of the institutionalist perspective. Bit obvious really.

You're again merely showing how little you know. Here is one article chosen randomly: https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1467-6435.1982.tb01222.x

 

It shows I am right: Marx couldn't tell the difference between property that only enables the factory owner to offer the worker access to economic opportunity he would not otherwise have and property that only enables the landowner to deprive the worker of access to economic opportunity he would otherwise have.

 

This is a childish response. We have confirmation from economic analysis that Marx's analysis into property rights continues to influence the profession. Indeed, you would be correct in suggesting Marx is as important as Coase in understanding the nature of new institutionalism.

I appreciate you don't like that. Where are your publications in support of your rant?

 

Thank you for the admirably honest confession.

Right. It is a profession. Or you could call it a "discipline" or a "field." One thing you can't call it is science, in large measure because it pays such heed to Marx's absurd, anti-scientific claptrap.

I.e., but not economics.

The profession is not interested in publishing facts.

 

Zero comment again. Why do you think there are numerous publications on Marx's analysis into property rights? Is it another conspiracy?

 

Because it's reliably wrong, and effectively distracts the left -- you are a good example -- from the salient facts.

"Whenever I see something that makes absolutely no sense whatsoever, I know there must be a damn good reason for it."
-- Peter deVries

That would describe Marxism and its otherwise inexplicable hold on academe.

 

Given the multiple publications on Marx's contribution to property rights analysis, when is yours coming out?