[HN Gopher] Employee - CEO pay gap historically wide
___________________________________________________________________
Employee - CEO pay gap historically wide
Author : e12e
Score : 125 points
Date : 2025-07-23 18:41 UTC (4 hours ago)
(HTM) web link (www.cnn.com)
(TXT) w3m dump (www.cnn.com)
| mc32 wrote:
| And it's not only a problem at for profit organizations but also
| a problem for so-called NGOs and other non-profits --who you'd
| think would be different...
|
| Screw it, tax them progressively for every multiplier above the
| average Jack and Jill's pay --with adjustments for company size
| and whatnot.
| Hikikomori wrote:
| At some point do we need to make it a law to not compensate
| anyone more than x times the lowest worker salary?
| ndrwdvvs wrote:
| this would greatly diminish meta's ability to hire ai
| researchers
| Analemma_ wrote:
| I'm already sold, you don't need to sweeten the deal
| further.
| michaelt wrote:
| Their competitors like Google and OpenAI would _also_ be
| subject to the same salary cap.
| navbaker wrote:
| That will never happen in the US as long as the current
| iteration of the Republican Party has any power to stop it,
| which is given to them by people continuing to vote against
| their own interests and thinking that billionaires are what
| "makes America great".
| m00x wrote:
| The democrats are just as guilty of this.
|
| There was bi-partisan support for blocking congress from
| trading due to clear insider trading and the Democrats
| refused to support the bill.
|
| Democrats were also the ones to move all manufacturing to
| China, which hurt the American worker more than anything
| we've done in the past 20 years. If the democrats were
| actually serious about the working class, they would've let
| Bernie compete against Trump.
| wat10000 wrote:
| Never mind the multiplier. Bring back 90% marginal tax rates.
| bpt3 wrote:
| The ones that had numerous loopholes causing the effective
| rate to be similar to what it is today? Sure, have at it, but
| it's not going to have the effect you want.
|
| If you think anyone is going to pay an effective tax rate of
| 90%, I'm not sure what to tell you.
| wat10000 wrote:
| Of course they're not. In a progressive system that uses
| marginal rates, there's little point in giving someone a
| raise when they're in the 90% bracket, so nobody is going
| to be paying a 90% effective rate on all their income.
|
| The point isn't to actually collect $90 million in taxes
| from a CEO paid $100 million, the point is to discourage
| that kind of ridiculous pay package in the first place.
| _DeadFred_ wrote:
| Also the 90% was only charged on income OVER a fairly
| high amount. I think it was the equivalent of income over
| $2 million.
| bpt3 wrote:
| In reality, the people who earn that much will do what it
| takes to avoid those taxes, including moving themselves
| or their business to someplace that won't confiscate
| their income if needed.
| vaneri2007 wrote:
| Are we back to monarchy where the few makes the most and the rest
| is there to watch?
| goatlover wrote:
| Technofeudalism where our tech lords rent out all the services
| we rely on. AI will only make it worse.
| glitchc wrote:
| Why not stop renting? As experts, we are in a unique position
| to be able to make that choice. Regular joes and janes don't
| have much hope, but we do.
| hunter-gatherer wrote:
| You must not be from around here. Most of us here on HN are
| lords, vassals, or nobles in this technofeudalist society.
| The technomonarch is currently giving us enough fiefs to
| behave appropriately.
| bee_rider wrote:
| I'm not sure of that. I expect most of the posters here
| are more like the equivalent of a skilled blacksmith.
|
| I mean, it is a little weird because compensation these
| days usually includes stock, so, some ownership of the
| company. But not much real decision making power beyond
| the limited-scope decisions around we implement their
| will.
|
| Maybe a consultant could be considered like a vassal?
| vouaobrasil wrote:
| Not really. Renting will be forced via iterations of the
| prisoner's dilemma, and all it needs is a proportion of
| people who will rent at some point to keep the system
| going. A few standouts that make a break from renting will
| just be a mantlepiece that gives us the illusion of choice.
| Apreche wrote:
| The one thing that wealthy people actually purchase is
| assets. They can't possibly spend all their money. The
| extra money is managed by wealth managers. Those managers
| automatically use the money to purchase more assets. This
| drives the prices of assets ever upwards. Fortunate people
| like doctors, lawyers, and tech workers with high paying
| jobs might be better off than most, but they can not afford
| to purchase assets that the truly wealthy people desire.
|
| I could afford a house, sure. In the boonies. Could I
| afford to buy the NYC apartment I live in? No chance.
| shadowgovt wrote:
| Yes, good idea. We should all go in together to build our
| _own_ datacenter in The Dalles! Who 's with me?
|
| (More seriously though: the real challenge to this approach
| is that cloud compute resources are a game changer and they
| can be at best approximated with the high-latency
| connections of hundreds of distributed users. The problem
| to solve goes a bit past "everyone should host their own
| email..." And even that is a tall order if you want your
| email to actually be sent and received and to not drown in
| spam).
| recursivedoubts wrote:
| no, we are back to an oligarchy, which is the natural state of
| human affairs in the post-reformation anglosphere unfortunately
| humblebeekeeper wrote:
| Workers should exercise their power more, imo. We need more folks
| willing to put tools down, collectively, over stuff like:
|
| * RTO mandates that reduce productivity AND job satisfaction
|
| * High CEO pay outstripping worker pay
|
| * Loss of work autonomy and space (working without an assigned
| desk)
|
| * Layoffs out of the blue for successful teams
|
| * Weakening benefits
|
| * AI being wedged into whatever task you are working on
|
| I don't care if it's a union, I don't care if it's a guild, I
| don't care if it's just a group of folks deciding to take action
| together, whatever. It's time we (especially us in tech) to stop
| acting like "got mine" and start acting like "get ours".
| taraindara wrote:
| The hard part is these workers are doing the job to survive
| life. Without the job, the unsure future is terrifying.
|
| I'm all for taking action. I just don't know what action best
| suits my needs, other than finding a new job or starting my own
| business and hoping I don't become one of the greedy ones too.
| echelon wrote:
| > The hard part is these workers are doing the job to survive
| life.
|
| Tech companies used to hire all the brilliant engineers
| because they were worried about startups eating their lunch.
|
| Without antitrust enforcement, they've grown large enough
| that they can essentially bleed money in any of their non-
| core markets for decades without it impacting them. So this
| clearly isn't the case anymore.
|
| We need to:
|
| (1) get the DOJ/FTC/EU/ASEAN/etc. to slap the FAANG / Mag 7
| hard. Bust them up into many companies. It would probably
| even result in greater market value being created as these
| companies are inefficiently sitting on gold mountains that
| they do not monetize and also making insane malinvestments
| that simply waste millennia of human engineering in stupid
| ways that have absolutely no potential of succeeding. But
| more than anything, this oxygenates the field for competition
| and provides greater upside to the financial / labor /
| innovation capital that are actually doing the work.
|
| (2) start lots of startups that erode the key money makers of
| these companies. They're quite vulnerable right now. And
| they've laid off a lot of highly skilled labor.
|
| Google should be four or five companies, at minimum. And it's
| time that the governments of the world demand it.
| gitremote wrote:
| > I'm all for taking action. I just don't know what action
| best suits my needs, other than finding a new job or starting
| my own business and hoping I don't become one of the greedy
| ones too.
|
| Tech workers shouldn't punch down against unions. We should
| be pro-union in general.
| ryandrake wrote:
| For some reason, too many tech workers think they are some
| kind of top 1% of tech workers, captains of their industry,
| and master negotiators: Each of them are a unicorn worker
| that unions couldn't possibly help.
| bpt3 wrote:
| US style unions generally require the above average
| workers to give up some form of compensation to benefit
| the below average workers.
|
| While you could argue "too many tech workers think they
| are some kind of top 50% of tech workers" and be correct,
| that is very different than claiming unions help everyone
| but the top 1%.
| clayhacks wrote:
| What sources do you have for that?
|
| Unionized employees make more than their non-unionized
| counterparts [0]. Even if the top earners to bottom
| earners gap shrank in relative terms, in absolute terms
| both would likely be higher.
|
| [0]: https://www.bls.gov/opub/ted/2025/weekly-earnings-
| of-nonunio...
| bpt3 wrote:
| Why? Assuming you're talking about a standard US union and
| not something like a guild, it would ultimately suppress
| wages for the top talent to provide job security to the
| other end of the bell curve.
| gitremote wrote:
| Why do you think this, other than "unions = communism"?
| recursivedoubts wrote:
| tying healthcare to employment and making two-earner
| households the norm has been a disaster for labor power
|
| now your employer holds you hostage via health care & if one
| spouse loses a job the other is not able to quickly replace
| part of that income
| bobthepanda wrote:
| i mean, the income replacement thing was a lot worse when
| there was only one breadwinner. at least with a two income
| household you have _something_.
| recursivedoubts wrote:
| No, now two (rather than one) incomes is required for a
| middle class lifestyle for most couples so there is no
| labor safety blanket available to temporarily allow the
| other couple to look for work.
| dietr1ch wrote:
| It's even worse when under a work visa. You can't even defend
| yourself when figuring out the legal course takes longer than
| you can stay in the country.
| hollywood_court wrote:
| I imagine we could get a lot of issues resolved if public
| school teachers went on a nationwide strike for only a few
| days. Not even a complete week.
|
| The same could be said about back of house restaurant staff or
| caregivers like CNAs or daycare staff.
|
| The two most vulnerable groups of people in our society are
| young children and the elderly. And the people who take care of
| those two groups are treated terribly and paid non-living
| wages.
|
| Having them go on strike for a few days would at the very least
| bring a great deal of attention to the matter.
| geodel wrote:
| Yup, sounds very straightforward to me. At least ten days of
| mandatory strike should be mandated by law as it can resolve
| so many issues.
| dgfitz wrote:
| Not at all against the idea, thinking about it from the other
| perspective: people would just use leave, or WFH, or take
| LWOP for the teacher aspect to take care of their kids. Or
| form a commune where one parent takes care of ~10 kids and
| everyone else goes to work.
|
| Elderly care, yes that would probably be more effective.
| However, I can see a scenario where people would pass away
| from a lack of care even if for a few days. This opens up a
| whole new can of worms.
| PaulKeeble wrote:
| Never tell them when the strike is going to end, it ends when
| your demands are met not a moment before and they should
| never hear otherwise.
| shadowgovt wrote:
| Worth noting is that in the United States, we passed laws to
| make it difficult to do multi-union collective action.
| Secondary strikes are generally illegal (workers of company B
| can't strike because A's employees are striking A to try and
| induce A to come to the negotiating table).
|
| I'm sure the folks with legal power would try to use that law
| to tamp down on any full-on nationwide action.
| commandlinefan wrote:
| Well, the time to take action was about 25 years ago when we
| were in demand. That horse has long since bolted.
| basisword wrote:
| I think life has gotten too expensive. People have zero
| leverage. Part of that is self-imposed in terms of unnecessary
| expenditure but the basics like food and housing are now so
| expensive people can't strike. They can't quit and try to find
| something new. You need an exceedingly strong union to get
| anything these days and even then most of the recent strikes in
| my country have achieved very little.
| mrangle wrote:
| So you want to work from home with top pay, top benefits,
| control over your assignments, control over Ai competition, and
| control over CEO salary. And you're couching this as the
| reasonable ask of oppressed labor and want to organize over it.
| Do I have that right? Last, I assume that the labor pool should
| be as large as possible.
|
| The CEO pay issue is agitprop nonsense. It's purely political
| without proved mooring to worker interests. It's predicated on
| the same fallacy that more taxes will mean more appreciably
| more social benefits for the poor. Instead, the money gets
| routed everywhere else. The only metric that matters for
| workers is their own pay. You have no idea if higher CEO pay
| isn't linked to comparably higher worker pay, not less. No
| worker in their right mind would spite-lower CEO pay just to
| have their own be static or decline.
| dgfitz wrote:
| Agitprop: Agitprop, derived from the Russian "Agitatsiya i
| Propaganda," refers to the practice of using cultural and
| artistic forms to promote a political ideology. It's
| characterized by its overt and often forceful messaging,
| aiming to influence public opinion and behavior.
|
| TIL
| salawat wrote:
| Said post you learned it from was also a shining example of
| agitprop.
| nickff wrote:
| Where is all this money going to come from? Labor is already
| the largest expense for most companies, and executive
| compensation is only a very small proportion of it. If the
| companies are have all their profits taken away (in the form of
| increased worker pay), their capital will vanish as well
| (either invested elsewhere or spent by the former investors on
| assets & services), and they won't be able to operate.
| fredfoobar wrote:
| Looks like a cash grab before the AI meltdown
| Workaccount2 wrote:
| The media would probably lose 20% of their revenue if people
| learned that CEO's with those monster pay packages get paid out
| of shareholders pockets, whereas workers get paid out of company
| pockets.
|
| To put it plainly - not paying the CEO wouldn't free up any
| meaningful amount of more money to pay the workers.
| vouaobrasil wrote:
| Even if that were true, they should still get less on
| principle. Making the elite richer gives them even more power
| that they don't need.
| bpt3 wrote:
| On what principle? Why should anyone be barred from
| negotiating the best deal they can get in a fair exchange?
| vouaobrasil wrote:
| The keyword is fair. The have the power to influence the
| government through bribes so it's never fair. And they can
| use their wealth to take advantage of the commons as well.
| They should be sent to prison, the majority of them.
| clipsy wrote:
| I'm sure the workers would be happy to take substantial raises
| in the form of equity.
| Workaccount2 wrote:
| Probably not, since you can't pay rent or buy groceries with
| shares. If the company is private this is even more of a
| headache as you may not see any money for years and the
| actual value wouldn't be firm until the sale is finalized.
|
| If the company is public...you can just buy shares like
| anyone else (well depending on your position you might need
| approval).
|
| Equity isn't a magical thing that prints millions. There are
| ample people on this forum that could tell you endless
| stories about "equity" and "getting rich"...
| hnav wrote:
| The company issues new shares to the CEO, it could just as well
| issue new shares to workers, issue new shares and sell them to
| the workers.
| thrance wrote:
| And where is that money shareholders give to CEOs coming from?
|
| I'll one up your tautology: not paying shareholders would free
| up meaningful amounts of money to pay the workers.
| kyralis wrote:
| _Workers_ are paid out of shareholder pockets. Every dollar
| spent on worker salaries is a dollar not spent on dividends or
| stock buybacks. This isn 't a useful distinction to make.
| Workaccount2 wrote:
| Sure, from the standpoint that the entire business is an
| investment owned by shareholders that's true. But it's not
| really helpful in any financial way to frame it like that.
| The entire business could be liquidated and paid out in a
| dividend if that's all shareholders wanted.
| drowsspa wrote:
| Why does it matter?
| reliabilityguy wrote:
| I suspect that lack of strong antitrust contributed greatly to
| what we have now.
| vouaobrasil wrote:
| That, and the government support of big business in many other
| ways as well.
| paulddraper wrote:
| What trusts do you see?
|
| Apple?
| reliabilityguy wrote:
| Google, Meta, MSFT, Apple, and many many others.
|
| My (perhaps moronic, but hey, I'm not an expert) metric is
| this: if a company X constantly buys other companies just for
| the sake of preventing competition --- it's bad, and we risk
| to have a monopoly. Which, we almost do have with Google,
| Apple, and many others.
|
| I mean, it's a fine line to thread: companies should be able
| to do M&As, but at the same time, they should not be allowed
| to become monopolies.
| adastra22 wrote:
| > Google, Meta, MSFT, Apple, _and many many others_.
|
| That's ... not how monopolies work.
| reliabilityguy wrote:
| Thank you for a very insightful comment.
|
| PS you do not have to have a monopoly to get no or
| minimal competition.
| arrosenberg wrote:
| Antitrust law covers a broad range of anti-competitive
| corporate behavior. Don't be pedantic.
| carefulfungi wrote:
| If you want to read about this, "industry concentration rate"
| is a good search term. In general, studies show that US
| industry concentration (percentage of the market claimed by
| the largest entrants) is increasing (indicating a decrease in
| competition).
|
| Here's an example:
| https://www.federalreserve.gov/econres/notes/feds-
| notes/a-no....
|
| And another: https://bpb-
| us-w2.wpmucdn.com/voices.uchicago.edu/dist/7/129...
|
| This doesn't seem like a topic with an irrefutable answer,
| though, due to the complexity of measuring. Here's an
| interesting paper on that complexity and a contrary point of
| view: https://www.nber.org/system/files/working_papers/w32762
| /w327...
| shadowgovt wrote:
| It did. The shift from the manufacturing sector to the service
| sector also mattered; manufacturing had a well-understood
| "union culture" with clear benefits to employees and service-
| sector work was generally considered "white-collar" and not in
| need of the same protections.
|
| ... but ask nurses whether they feel "white-collar."
| bko wrote:
| The question is often framed as "fairness" but the more
| interesting question, are the high salaries worth it? One person
| they cite as a high salary is the Starbucks CEO.
|
| > The report listed Starbucks CEO Brian Niccol as making 6,666
| times more than the company's typical worker, the largest pay gap
| in the S&P 500. (Niccol took over the company's helm last
| September. The AFL-CIO annualized his compensation, listing it as
| nearly $98 million, compared to the typical Starbucks worker's
| pay of less than $15,000.)
|
| But what happened after he was announced? The stock jumped nearly
| 25%, resulting in an increase market cap of 27.2 billion [0].
|
| So the $98m per year compensation is a great bargain for
| Starbucks and all their shareholders. This at least suggests that
| CEOs are very important (or investors are stupid?). But the stock
| price today is about the same level post announcement, so the
| value of his leadership mostly matched expectations for now.
|
| It would be great if the article had some of this context and
| nuance rather than a press release from the AFL-CIO.
|
| https://www.forbes.com/sites/petercohan/2024/08/13/why-starb...
| dvt wrote:
| > So the $98m per year compensation is a great bargain for
| Starbucks and all their shareholders.
|
| And their employees, too, actually, since they have something
| called the Bean Stock[1] program. But citing this wouldn't fit
| the article's narrative. Comparing salaries of a regular
| employee and a CEO (especially one of a public company) is like
| comparing apples to oranges; it has nothing to do with
| fairness. The two are _fundamentally_ different in effort,
| incentive, and risk:reward structure.
|
| [1] https://www.starbucksbenefits.com/en-us/home/stock-
| savings/b...
| buerkle wrote:
| Sorry but the risk:reward narrative is tiring. Many of these
| CEOs walk away with millions whether they succeed or fail,
| there's little to no risk for them. In fact, even they fail
| in cases they end finding another well paying executive
| position. Meanwhile, many of their employees are living
| paycheck to paycheck.
| wat10000 wrote:
| Even if he got fired and had his entire pay package clawed
| back somehow, Brian Niccol would still be fabulously
| wealthy. His risk is basically zero.
|
| There's something about the human mind that makes it feel
| worse for a rich person to lose insignificant-to-them
| millions than for a poor person to lose a thousand bucks.
| ryandrake wrote:
| People have trouble with orders of magnitude. A
| billionaire could lose _99% of his wealth_ , and still
| have $10M--set for life, never having to work again.
| dvt wrote:
| I don't necessarily mean financial risk (though tbh, even
| the golden parachutes you cite are often a drop in the
| bucket compared to the market cap of these companies), but
| there's a lot of legal risk involved: think testifying to
| Congress, embroilments with the FTC/FCC, etc., dealing with
| a board of directors, navigating potential hostile
| takeovers or activist investors, etc. My point is that it's
| just a different ball game and being a CEO of a public
| company simply isn't the same thing as being an accountant
| that works 9-5.
|
| I personally have _significantly_ more of a problem with
| Congress having no term limits and being able to trade on
| the very market they 're regulating.
| gitremote wrote:
| Non-CEO employees like lawyers and corporate accountants
| have legal risks too and could be subpoenaed.
| mattmanser wrote:
| Where are these CEO convictions then? If there's this
| "risk"? And please don't cite deliberate fraudsters like
| Holmes or SBF.
|
| And what conviction length do those tiny few who get
| convicted of aomething actually get?
| dvt wrote:
| > Where are these CEO convictions then?
|
| Not sure if this is rhetorical, but there are Wiki
| entries, investigative articles, documentaries, and even
| entire books dedicated to corporate malpractice and its
| consequences over the past century.
| cycomanic wrote:
| But now you are talking about malpractice. I would argue
| a regular employee is just much exposed to legal risk. I
| would argue that their risk is actually higher, because
| they don't have a full office of corporate lawyers to
| defend them.
|
| Take the VW Diesel scandal, several engineers went to
| jail over this. In contrast Winterkorn has been charged,
| but AFAIK the case has been suspended and I'm not sure if
| it will ever go forward.
| ThrowawayR2 wrote:
| > " _Many of these CEOs walk away with millions whether
| they succeed or fail_ "
|
| Surgeons walk away with their pay whether a high-risk
| patient lives or dies, aside from provable malpractice.
| Why? Because they made a good faith effort to do their jobs
| despite an uncertain outcome.
| danlitt wrote:
| > citing this wouldn't fit the article's narrative
|
| Did you do any research at all into whether this makes a
| material difference to starbucks employees?
| dvt wrote:
| What do you mean by "material" difference? The stock
| literally went up 25%+, so of course every SBUX employee
| got to share in that rise. Or are you asking if it minted
| any new millionaires? Maybe a few, who knows.
| wasabi991011 wrote:
| Very quick and shoddy estimates:
|
| $100m per year / $400k employees = $250 per employee per
| year.
|
| Meanwhile, $ of stock per year is really hard to estimate,
| but one person online said ~$500 per year for a barista. A
| 25% increase in price due to a new CEO is then +$125.
| danlitt wrote:
| Why is that the more interesting question? It seems obvious
| that the salaries are likely to be worth it. Our entire society
| is optimized to do nothing other than increasing shareholder
| value.
|
| It seems surely more interesting to ask why the rest of us
| bother to go along with it.
| renewiltord wrote:
| Because we are all shareholders and this has worked much
| better for us than all the shit other people have tried
| elsewhere.
| TFYS wrote:
| The bigger these pay gaps get, the more expensive for the
| average person those shares get. We are not all
| shareholders in any meaningful sense, and over time less
| and less of us will be. This works better than other things
| we've tried, but we've only tried about three things.
| There's plenty of ideas that we should look into.
| BobaFloutist wrote:
| You...you know you don't have to buy whole shares, right?
| VOO has a minimum investment of $1.00. While I won't
| argue that not a single person in the country is
| incapable of investing $1.00, the % of the population
| that couldn't stick a few bucks every now and again in a
| free account is probably single digit.
| BrawnyBadger53 wrote:
| The current form of the system we practice is massively
| different from the one that put us so far ahead. We tried
| many things trying to push it to be more successful. This
| gap change is a result of some of that. We now need to
| evaluate whether that change was actually better. This gap
| may be short term worth it but with trends like quiet
| quitting, we probably should think about whether these
| changes will slowly cause larger long term losses in
| productivity at the lower ends of these hierarchies.
| bluefirebrand wrote:
| What do you mean we are all shareholders?
|
| No we aren't? Not even everyone on this forum is a
| shareholder, nevermind everyone in society?
| ryandrake wrote:
| More than one third of Americans do not own any stock at
| all, even indirectly through mutual funds or retirement
| accounts[1]. Although admittedly, this number has been
| falling steadily (in 1989, more than two thirds of
| Americans did not own stocks).
|
| 1: https://news.gallup.com/poll/266807/percentage-
| americans-own...
| _DeadFred_ wrote:
| 'We' haven't seen an economy like this since the Gilded
| Age. The 'this' you talk about is new territory for post-
| WW2 America, and the people at the bottom are pretty pissed
| about it. Not sure how long/how much force it will take to
| continue with it's making your life 'much better'.
|
| The society whose foundations 'this' is built upon, the one
| that built the middle class, was built on very different
| rules. Marginal tax rates over 90%, strong(er) labor
| protections, and CEO-to-worker pay ratios today's CEOs
| would balk at.
|
| 'Income inequality' is really just a pyramid scheme with
| branding pretending it's still an extension of post-WW2
| America that built the middle class. The American public
| isn't buying it anymore.
| bko wrote:
| Starbucks is a business. If they can produce things we like
| and fork money over, it's valuable and creates value for
| society. If it can do the same thing with less resources,
| that also benefits society (efficiency).
|
| I guess you go along with it because it's a proxy for using
| precious resources efficiently and creating things people
| want.
| cycomanic wrote:
| Interestingly, I don't know why the investors thought this is
| such a great deal. Looking at the financials, he certainly did
| not have a significant impact on growth (it's been stagnating
| for the last 2 years it seems). So maybe the conclusion is,
| investors make decisions based on vibe much more than facts?
| tschellenbach wrote:
| AI is giving people endless freedom to start their own companies
| if they feel their skills are undervalued elsewhere. Very
| positive change for the world I think.
| rimbo789 wrote:
| What a wildly naive take. AI will be another force of
| centralization, de-skilling, and repression that will make more
| people more dependant and more precarious making it much harder
| for them to start any form of business
| shkkmo wrote:
| The edited headline "Employee - CEO pay gap historically wide"
| here is wrong. The Employee - CEO gap is higher (ratio 295) than
| last year (ratio 268) but lower than in 2021 (ratio 324).
|
| If you're gonna make up a headline, don't make up one that is
| factually false.
| e12e wrote:
| Sorry about that - I tried to shrink the original to fit hn,
| but gave up after a few attempts.
|
| I'd argue the gap is still atypically wide, these past few
| years, though.
| shkkmo wrote:
| The gap is atypically wide, perhaps "Employee - CEO pay gap
| rises" would have the same intent without the factual
| inaccuracy?
| thrance wrote:
| Boss makes a dollar, I make the third of a cent.
| Kapura wrote:
| damn, if only it were possible to pass laws that make rewarding
| individuals increasingly unattractive as the individual rewards
| increased. some sort of progressive taxation scheme, perhaps. if
| only such a thing could exist!
| m00x wrote:
| You can't reap the rewards from a highly free market country
| while also interfering with the free market.
|
| There are countries where that gap is lower where you can move
| to if you really care about this. Most of Europe is a lot more
| equal, but you'll take a significant pay cut.
| greedo wrote:
| There's no such thing as a free market.
| hollywood_court wrote:
| We do plenty of interfering with the free market. We just
| don't do it in ways that benefit the workers.
| standardUser wrote:
| Binary thinking like that is a rhetorical trick, and a lazy
| one, that ignores both the diversity of existing market-
| oriented nations and the reality that these systems are not
| static.
|
| Not to mention that the American system is one of constant,
| frequent, and oftentimes contradictory forms of market
| interference, even if the manner of interference differs a
| bit from Western norms.
| tartoran wrote:
| > You can't reap the rewards from a highly free market
| country while also interfering with the free market.
|
| Look deeper into who's reaping all the benefits and who's
| interefering with the market.
| mattmanser wrote:
| Those rewards are failing, so yes you can.
|
| Your argument is just trickle down economics dressed up. But
| worse, we know that doesn't work. Not, we think. WE KNOW IT
| DOESN'T WORK.
|
| In fact, once you realize it's just the same tired trickle
| down economics argument, then when you start asking why is
| growth stalling, why are living standards falling?
|
| You can easily answer it. Because trickle down economics
| don't work.
|
| Because too much value is being captured by a tiny minority,
| who use that capital poorly.
| _DeadFred_ wrote:
| Have you studied free markets? They ONLY work long term when
| you have a strong hand 'interfering' in them. By design, from
| their very first proponents, having a strong hand step in was
| expected/understood to be required to keep them working long
| term.
| commandlinefan wrote:
| How would that even change anything? The CEO would still "make"
| 100x more than the individual employees, but the government
| would take as much as the individual CEO couldn't figure out
| tax loopholes to offshore and use it to study the mating habits
| of macaque monkeys. The most brutal tax regime you can imagine
| wouldn't change the substance of the article.
| SideQuark wrote:
| US tax system is the most progressive in the OECD [1]
|
| US top tiny amount of incomes pay vastly more, even per dollar
| earned, than in any other first world country, where middle and
| lower class pay a much larger share.
|
| Around the bottom 50% of US taxpayers pay zero federal income
| tax, and after post tax transfers (aid, etc...) the lowest
| decent sized chunk get money back, i.e., negative federal
| income tax.
|
| Then, after already covering the vast majority of US tax
| burden, the really wealthy end up paying another large chunk in
| estate taxes (and no, there isn't magic sauce where they all
| hide all assets in foreign lands - you can simply go over
| public IRS data, or CBO data and see).
|
| Here's historical effective rates by quintile. Bottom two were
| 9.3% and 15.0%, top 27.1% in 1979, in 2019 they were 0.6%,
| 8.9%, 19.3% top 1% remains over 30%.
| https://taxpolicycenter.org/statistics/historical-average-fe...
|
| How much more progressive is enough?
|
| https://www.cbpp.org/research/what-do-oecd-data-really-show-...
| robocat wrote:
| If you take away the incentive to work for an extra dollar, you
| break marginal incentives for high value workers.
|
| Too much progressive taxation is as unbalanced as CEO pay is.
|
| I am lucky enough to live in New Zealand and be taxed at 39%
| plus 15% sales tax. At some point I feel like the government is
| getting its pound of flesh. I just don't feel motivated to work
| hours to earn extra.
|
| The incentive of the government should be to encourage me to
| earn more since it would get its cut. Every other citizen
| misses out on 39 cents when I feel it is not worth trading my
| time for less than 61 cents on the dollar.
|
| Incentive systems matter. It isn't only about money - it is
| also about what feels fair.
|
| Everybody complains about the people earning more than them. If
| you're in the US you are excessively rich compared with most of
| the rest of the world. How about we tax everybody in the US at
| 50% and spread some of that wealth down to the workers in
| Vietnam or Bhopal? Strange how so many people whine about
| fairness but those same people don't wish to share their wealth
| fairly.
| cyanydeez wrote:
| Wonder if they included the acquahires ditching the dead weight
| Jerry2 wrote:
| I'm convinvinced that CEO-employee wage gap is due to this not-
| so-well known legal case from 1919: Dodge v. Ford Motor Co. [1]
|
| Basically, in 1919, Henry Ford sought to reinvest the Ford Motor
| Company's profits into raising employee wages and expanding
| hiring, arguing that sharing success with workers would
| strengthen the economy and the company's long-term prospects.
| However, minority shareholders John and Horace Dodge (who also
| ran their own competing auto company) sued Ford, claiming that
| his actions violated the fiduciary duty to maximize profits for
| shareholders.
|
| The Michigan Supreme Court ruled in favor of the Dodges,
| declaring that a corporation's primary obligation was to serve
| the financial interests of its shareholders and not broader
| social goals or even the well-being of its employees. This
| decision established a legal precedent that continues to shape
| corporate law even today and reinforcing the doctrine of
| "shareholder primacy" and limiting the ability of companies to
| prioritize stakeholders (like workers or communities) over
| investor returns.
|
| It's been downhill for employees since.
|
| [1] https://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co.
| opo wrote:
| >Basically, in 1919, Henry Ford sought to reinvest the Ford
| Motor Company's profits into raising employee wages
|
| I don't actually see any reference in the wikipedia article
| that Ford was saying he wanted to use the dividend money to
| raise wages:
|
| >...Henry Ford, sought to end special dividends for
| shareholders in favor of massive investments in new plants that
| would enable Ford to dramatically increase production, and the
| number of people employed at his plants, while continuing to
| cut the costs and prices of his cars.
|
| And as usual in these cases, there are other unstated reasons
| that might actually be more important to the decision maker:
|
| >...Ford was also motivated by a desire to squeeze out his
| minority shareholders, especially the Dodge brothers, whom he
| suspected (correctly) of using their Ford dividends to build a
| rival car company. By cutting off their dividends, Ford hoped
| to starve the Dodges of capital to fuel their growth
| al_borland wrote:
| Having people who make enough money to buy stuff is in the best
| financial interest of all companies in the long term.
|
| Companies and investors need to think further than 90 days
| ahead.
| caseysoftware wrote:
| I think you're off by about 80 years:
|
| > _Twenty-five years ago, Bill Clinton campaigned on an idea
| for limiting excessive pay for American CEOs: Cap the tax
| deductibility of top executives ' compensation at $1 million,
| and companies, not wanting bigger tax bills, might reel in
| their pay. In his 1993 budget, advisers suggested a compromise:
| Companies couldn't deduct CEO pay over $1 million unless it was
| "performance-based."_
|
| > _But many believe the loophole had the opposite effect,
| driving companies instead to pay more in stock options and
| certain performance-based bonuses, which actually supercharged
| the growth in CEO pay. In 1989, according to the left-leaning
| Economic Policy Institute, the median value of annual CEO
| compensation was $2.7 million. By 1995 it was $6.6 million, and
| it reached $13 million in 2016._
|
| Ref: https://www.washingtonpost.com/news/on-
| leadership/wp/2017/11...
| m00x wrote:
| Bill Clinton made irreparable damage to the American
| workforce. He sold out America to move all manufacturing to
| China by giving massive incentives to companies to do so. The
| market boomed and all that money went to investors instead of
| workers.
| prasadjoglekar wrote:
| While partially true in hindsight, letting China into the
| WTO, removing tariffs and giving them MFN status was a
| bipartisan effort beginning in the 80s and 90s. The premise
| was that China's market would open for US goods and
| services as well.
|
| It hasn't worked out like that for sure.
| evilops wrote:
| By the same argument shouldn't CEO pay be reduced?
| charlie0 wrote:
| It's time to become a CEO.
| baron816 wrote:
| Employee to CEO pay ratio is such a meaningless and distracting
| measure. Imagine there is a hedge fund that has only a handful of
| very highly paid employees. Compare that to a very large multi-
| national corporation that employs hundreds of thousands of low
| skilled laborers (something like Walmart). Let's also imagine the
| CEOs of both companies have identical pay packages. All else
| being equal, the hedge fund that only employs a few people is
| much better for society than the company employing many many more
| people. I don't think anyone here would agree with that.
|
| One thing we absolutely don't want to do is disincentivize
| companies hiring people at the lowest end of the socioeconomic
| ladder. If employing those people lowers how much executives are
| allowed to get paid, what do you think is going to happen?
| WorkerBee28474 wrote:
| Yes. If companies are told to minimize CEO-to-employee pay they
| will just externalize the lowest paid employees. This won't
| meaningfully improve those employees lives or wages, but will
| reduce the target ratio, and may make promotions more difficult
| as the employee would need to move between legal entities.
| whatshisface wrote:
| The statistic in the article compares average CEO pay to the
| median income, which is not driven by company-to-company
| differences in category of labor.
| SideQuark wrote:
| > The statistic in the article compares average CEO pay to
| the median income
|
| No, it compares the top 500 CEO pay out of 250k+ CEOs to all
| workers, which is as ludicrous and misleading as comparing
| the top 500 worker pay to all 250k CEOs and thinking this is
| the useful metric to rage about.
| fwip wrote:
| Isn't this just an argument about Goodhart's law? (Yes, if this
| measure becomes a target, it will no longer be a useful
| measure.)
| qualeed wrote:
| In a complete vacuum, sure, it's not a great measurement.
|
| But it can provide some information when you look at it in
| context and with other information. Practically any comparison
| between a 10-person hedge fund and walmart is going to be
| silly.
| rimbo789 wrote:
| Every CEO I've worked for could have been replaced with a bot
| that randomly spat out "yes" or "no" to questions and the company
| would have either been improved or stayed the same.
| jstummbillig wrote:
| The pay gap is a such a sad metric. I understand where it's
| coming from (a mix of envy and sense of unfairness) but I think
| it's just not the right number to look at if we aim to increase
| prosperity. Much more interesting, if we cared about the
| prosperity of people, is the average inflation adjusted
| compensation of a companies employees, and that is something we
| could measure CEOs by.
| declan_roberts wrote:
| Both blue collar and white collar wages are being dramatically
| depressed via legal and illegal immigration. I have no idea why
| this became a right-wing talking point. This is why big business
| is very pro immigration.
|
| Your employer can at any time replace you with an H1b who MUST
| work at the company to even stay in the country.
|
| As soon as we can reform immigration we are going to see much
| higher software salaries.
| aaronbaugher wrote:
| The immigration issue has been a crown lying in the gutter
| waiting for someone to pick it up ever since the 90s when the
| Clinton "It's the economy, stupid" Democrats teamed up with the
| Bush neocon Republicans to make corporate profits and Wall
| Street numbers their driving basis for economic policy. All the
| approved economists said making goods cheaper would make
| everyone richer, no matter how it happened, so they yelled
| "Smoot-Hawley hur hur" at everyone who disagreed, and invited
| the world.
| declan_roberts wrote:
| It's unnecessarily politicized and also the source of all of
| these fake job postings.
|
| Employers put them up and everybody wastes their time
| applying. When the employer "can't find anyone qualified"
| they import an h1b for less money who can be worked harder
| because they have no choice.
|
| They love that they can hire and train people who can't
| complain or even legally leave to join a competitor. Pound
| sand, Americans!
| SideQuark wrote:
| There are 211,230 CEOs with mean annual wage $258,900 [1]. Being
| the mean surely gives that the median is much lower.
|
| There are 120,053,000 age workers with median weekly income of
| $1,159 = $60,258 annual income [2] (and this includes part time,
| people in college, semi-retired, many people who have had high
| incomes in the past or will in the future).
|
| A story about a 4.3x of CEO to worker pay, which is the actual
| stats of CEO to worker, doesn't generate enough outrage.
|
| Comparing the top 500 (ish) of them to all workers is simply bad
| analysis designed to rile up people.
|
| Surely people here would call out the dishonesty of comparing the
| top 500 wage worker salaries (many millions/year each) vs all the
| CEOs (258k) as dishonest. It's funny seeing how many people eat
| this equally dishonest comparison up as indicative of all CEOs
| and companies...
|
| As to all the theories as to this or that law being some culprit,
| or some evil intentions, note the pay of the top performers in
| nearly every category, from musician, to athlete, to lawyer, to
| top 500 CEO, to even employee, have seen pretty much the same
| growth over the same time. It's nearly impossible all these are
| driven by something as specific as a labor law, a union change, a
| stock market or money format change. It's almost a certainty
| these are all driven by an excess of accrued capital in the US
| (and other markets) allowing those paying these incomes to pay
| for what they see as talent, whether is a huge rise in middle
| class disposable income, a larger share of US money available for
| retirement accounts, etc. Many years ago chasing down this exact
| set of ideas revealed a ton of econ papers reaching the same
| conclusions....
|
| In short, high (someone else) pay rarely is money taken from the
| poor, and in more cases the poor and middle get higher wages as
| the top get higher wages simply by econ effects like the Baumol
| effect. This is the effect that as some jobs pay more, it
| attracts more people, so for society to get older jobs done, they
| must now also pay more, even if productivity in the latter jobs
| have not increased. It's why the lowest labor in the US pays
| many, many fold over what you'd get for the same output in most
| of the world.
|
| https://en.wikipedia.org/wiki/Baumol_effect
|
| Just some thoughts....
|
| [1] https://www.bls.gov/oes/2023/may/oes111011.htm [2]
| https://www.bls.gov/cps/cpsaat39.htm
| cycomanic wrote:
| Note that this is mean wage not compensation, specifically it
| does not include stock bonuses [1]. Considering that the high
| CEO compensation is almost exclusively based on equity (there
| are several famous cases of CEOs taking only $1 of wage),
| arguments based on wage are pretty meaningless.
|
| Also, I highly suspect that even if we take the ratio of top 1%
| CEOs compared to top 1% of non-executive employees the picture
| would not change dramatically (unfortunately I can't find
| easily accessible information).
|
| [1] https://www.bls.gov/oes/oes_ques.htm
| absolutdis wrote:
| historicly wide lik ur mum
| SirMaster wrote:
| I mean there are only so many CEO positions available... Wouldn't
| we expect that the competition for so few top ranking positions
| would come with high pay?
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