Microsoft CEO Nadella’s compensation drops… to $48M — CEO to employee pay ratio hits 250 to 1::Try to hold back your tears as CEO to employee pay ratio hits: 250 to 1
I’d support laws that limited CEO:Employee wage ratio to something more like 10:1.
If you pay me 100k and you’re making 1m, I can accept that there is no room for a raise or a bonus.
If you are making 10m and I am making 100k and you deny me a raise, I’m feeling disenfranchised.
I’d like to see such a rule, but doubt that there won’t be any loopholes to circumvent it. You can already see some of those in sports. There are a lot of stories on how clubs “dealt” with financial fair play in european football and I heard rumors of a similar thing with the american salary cap too.
Just some ideas:
- ridiculously long contracts with “fair” pay
- managers are working for a seperate company that only contains managers
- seperate overpayed contracts for a none existing job
- material/service based rewards like private jets
All in all good luck with finding a politician pushing this through (most lf the are exactly in those positions) and finding all the loopholes. Rich people can pay a lot of experts to become even richer
There will always be loop holes, but then you fix those. And regardless, loop holes are not used by all, and they take time to find. So that’s no reason not to do it.
Absolutely right, but nobody should expect it to be a perfect solution to all the problems.
All you have to do is have a subsidiary corporation that the executives work for. They get paid whatever insane amount and the parent company hires the executive company so it’s not direct payroll. I’ve seen this exact arrangement done for other tax reasons.
Those are only loopholes if they are allowed to exist. If people do those things, but then get fined/persecuted as they are infringing on the spirit of the law to limit executive/worker pay ratio, then they are not loopholes right?
Do you live in Europe? Then do consider signing the commission for the EU commission https://www.tax-the-rich.eu/
It’s better to place the burden on the company as a whole per revenue than per CEO pay differential. Amazon for example made somewhere in the 500 billion dollars in revenue for 2022 but for all ~1.5m employees only spent ~42 billion on salaries for an average of ~28k a year.
They have so much ample revenue to use for increased salaries that goes unanswered.
Won’t work, can’t work.
There are companies which have insane revenues but tiny profits - let’s say manufacturing, where you need to pay a shitton for materials and workers, just to get a bit in return.
There are also companies where the main source of income is selling people’s time, say a consulting firm like McKinsey. Their income/revenue ratio is gonna be totally different from the first example.
I’m sure there are good ways to do it but this ain’t one of them.
I can see your point, but I am also tired of pointing to CEO salaries and thinking that reducing them will make any meaningful increase on company wide salaries.
There’s always making cost scalable to reported profit. It’s annoying to see a company like Amazon make so much but pay employees so little because it’s"competitive pay" to the business they’re ruining through monopoly.
Guess he has only been working 250x as hard as the other employees
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unironically I do think that the ceo of a corporation as big as Microsoft does much greater than 250x the work as a low level employee. Not in terms of hours spent, but in terms of skill required and impact.
Bullshit, so many things incorrect and nonsensical about what you just said.
I closely work with the CEO at my organization and their whole job is decision making. If you have common sense then you can be a CEO
That’s still an obscene amount of money, but I appreciate the trend reversal.
It’s not reversing. He didn’t hit the right metrics to get the 50M he could be getting. He just didn’t get his bonuses.
He also froze employee wages a few months ago, thanks to inflation, if anything, it’s set up to accelerate to get even worse.
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The CEO is an employee.
If I make ten times the minimum wage, am I working ten times as hard as a minimum wage earner?
Not harder, but it’s also a matter of knowledge. You couldn’t take any person off the street and have them be a successful CEO tomorrow. Same with other specialized roles, like medical roles, some IT areas, rocketry, etc.
That said, pay and benefits disparity is a real thing and I’d love to see it addressed. But what is reasonable to me may not be to others.
You couldn’t take any person off the street and have them be a successful CEO tomorrow.
Are you sure? Has anyone ever tried? Maybe we should do an experiment!
There was a documentary with this premise, only with commodities traders rather than CEOs.
The bottom line is yes, you can take someone off the street and have them trade places with a senior broker and thrive in that role; the only caveat being that the subjects of your experiment discover your plot and subsequently falsify orange crop yield projections causing you to lose your entire net worth investing in frozen orange juice concentrate futures.
Consider how stupid the average (median) person is. Then realize that half of them are stupider than that.
I don’t think you have to do the experiment, it won’t work.
You’re assuming you need to be smart/educated to be a CEO.
I know a couple CEO’s who are just trust fund idiots and bet people off the street would do just as good.
You seem very confident that you don’t need to be smart to be a successful CEO. Then what do you need? Surely if anyone could be a successful CEO they would do so, 10x salary is the prize. There must be something you need to be a successful CEO.
Most of CEOing is about networking and wealth. It’s a little club and we ain’t in it, even if we wanted to, even if the prize is 10x salary.
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Nice hoodie Satya, bet it cost more than my annual salary.
