Skip to main content

A few weeks ago, the folks at the site NerdWallet decided to analyze just how stark the inequality at major fast food and retail chains is. They calculated the ratio of CEO hourly compensation to the average hourly worker wage as well the number of months of overtime that average worker would have to work in order to earn money equivalent to that hourly CEO pay. Their results are below:

The CEOs at McDonald's, Starbucks, and Dollar General make over 1,000 times as much per hour as the average non-executive employee in their company. Their employees would have to work over three months just to make as much as those CEOs make in one hour.

According to data from the Social Security Administration, the median wage in 2012 was $27,519.10. If we assume 40 hours a week and 52 weeks per year, then that comes out to $13.23 per hour. The CEO at McDonald's makes 699 times that per hour.

The CEO with the lowest hourly compensation in NerdWallet's sample was that of Best Buy, at $6,517 per hour. That CEO makes 666 times the average non-executive Best Buy employee and 493 times the median worker in the country.

According to a 2010 report from the Institute for Policy Studies, CEOs back in the 70s rarely made more than 30 times what their workers made. IPS calculated that the CEOS major corporations recently averaged 263 times the compensation of average workers. Unsurprisingly, the rapid growth of executive compensation began in the 1980s---and it's continued since.

Socialists and Greens in Switzerland recently championed a referendum to limit executive compensation to 12 times the compensation of the lowest-paid worker, often called the "1:12 referendum" for short.  The referendum did not pass (65.3% against to 34.7% in favor), which should come as no surprise since market liberalism is stronger in Switzerland than in other European countries. Consider, for instance, the results of the most recent Swiss federal election. The Socialists, the Greens, and the minor parties of the left won only 28.3% of the popular vote. The parties of the center-right and right had a combined 49.6%, and the parties of the center (the Christian democrats and the Green liberals) had 19.7% of the vote. The 65-35 split in the vote on the referendum looks about right, given this ideological split.

The political will for such an initiative appears even weaker in the U.S. Here is the response I received from Elizabeth Warren, one of the most progressive Democratic senators, in response to a petition calling for similar action in the US:

Thank you for contacting me in support of limitations on corporate executive compensation, such as the recent Swiss proposal that would have capped the salary of certain corporate executives at 12 times the salary of the lowest-paid employee at the executive's company.

I believe that companies should be able to pay top dollar to attract and retain key executives but that the public deserves to know more about these disparities so that investors can assess whether they benefit from such stark differences in compensation.  That is why I joined several fellow Senators in urging the Securities and Exchange Commission to promptly finalize a rule that requires companies to report, in the form of a ratio, the CEO's total annual compensation compared to the median total annual compensation of all other company employees.  When executive compensation packages are misaligned with shareholder interests, it is bad for workers, bad for investors, and bad for the economy.  We learned that the hard way during the financial crisis, when the structure of inflated executive compensation packages on Wall Street led to short-term recklessness and staggering economic cost to our country.  We still have not fully recovered from that crisis, and this is an area that I care deeply about.

Disclosure is a positive step, even if it could end up inadvertently exacerbating the problem. However, transparency does not inherently create political will or inspire action. The logic for disclosure in the email above is very technocratic. Its value apparently lies in how it promotes efficiency and sound management and how it helps to manage risk. Morality and justice are largely absent.

This emphasis on productivity and economic efficiency dominates much of Democratic argumentation/rhetoric these days (but, thankfully, not all of Warren's--she often manages to be a very effective moral communicator). Consider the effort to increase the minimum wage. Because the increase in the minimum wage boosts economic productivity of workers and buying power of consumers, say Democrats, it won't conflict with the continuation of profit. Perhaps it could even increase profits! We see similar arguments as well in the debate over immigration, where Democrats often would prefer to talk about the economic benefits of immigration than to address questions of human rights, justice, and family reunification. Action on climate change, too--insofar as it even gets discussed--is often presented more as an economic opportunity than a moral imperative.

One gets the impression that Democrats are talking to their donors, not their constituents, when they make such arguments.

In their recent book How Much is Enough? Money and the Good Life, Robert and Edward Skidelsky highlight the weakness of the technocratic defense for reform:

The historian Peter Clarke has usefully distinguished between “moral” and “mechanical” reformism. Moral reformism saw improvements in material conditions as ways of elevating the moral condition of the people; mechanical reformism simply aimed to increase their prosperity. Deprived of the ethical language by the collapse of religion and the strongly individualist fashion in economics and political philosophy, ‘moral’ liberals were forced back on purely ‘mechanical’ arguments. They stressed the positive effect on productivity of a better fed, better housed, better clothed, healthier and better educated workforce. This was almost certainly true. However, once the commonly accepted language became one of efficiency, the moral reformers were vulnerable to the charge that their reforms had created inefficiency by lessening the incentives to work and save, and by stealing resources from the productive sector. The social liberalism of the 1950s and 1960s had nothing left to put in place of the profit motive, only qualifications that applied to particular examples of ‘market failure.’ So when the social liberal states ran into fiscal crisis in the 1970s, they had no intellectually cogent defenses to offer against the restatement of the philosophy of untrammeled self-interest. Tax rates tumbled, the welfare state was reined in, state industries were privatized, the financial sector was set free.
[Note: The book by Peter Clarke cited is Liberals and Social Democrats. If you are interested in the intellectual history of the early 20th century British left, then definitely take a look.]

With a reduced willingness to make the moral case for egalitarian policies, liberals have embraced "growth" as their favored economic tool. Economic growth, to the (technocratic) liberal, can resolve the contradictions between classes within capitalism. If you are growing the size of the pie, then you can avoid the question of the disparity in the sizes of the slices.

The rising tide may "lift all boats," but the yacht will go further than the rowboat--and might even crush it.

Economic growth, in other words, is how liberals avoid talking about power.

Liberalism, by its nature, is an ideology of compromise. Liberalism celebrates the power of the market to increase prosperity but asserts the need to tame the market for its own good. Liberalism does not veer into the territory of system change or redesign. Consequently, liberal reformism often amounts to little more than opportunism: steps forward but no path.

Liberal reformism is constrained by its refusal to challenge the centrality of the profit motive—that is, to ask how much (if any) profit is justified and, as Skidelsky and Skidelsky ask, how much (money) is enough. Because of the inherent aversion to structural or systemic change, liberalism often depends on weak appeals to sympathy or enlightened self-interest. Sympathy is often narrow and intermittent, and at best, can support a pity-charity liberalism. Relying on enlightened self-interest is difficult because self-interest is rarely enlightened.

"Get as much as you can--but leave some for others" is not a particularly inspiring credo.

Eschewing the need to change society at the root and to change culture and values in order to broaden the sphere of the possible, liberal reformist opportunism prevents itself from offering enduring solutions to the problems that it is often capable of identifying. Organizing will be only ad hoc, piecemeal, provisional. In a lecture series published as The Reconstruction of the Spiritual Ideal (1923), Felix Adler explained this dynamic well:

Sentiment, self-interest, can be appealed to, and the factors that make for unfairness can be made to yield to a certain extent. Wages can be raised so long as their increase is consistent with the accumulation of profit. When, however, the cessation of profit itself is threatened, there is an end of concession. The motive, the principle that operates in the competitive system then stands forth as an insurmountable obstacle. Better housing can be supplied here and there by benevolent employers--a complete change in the housing system is resisted tooth and nail. Certain forms of the piratical instinct in business are prohibited; big business declares with self-complacency, we have seen a new light; but the same ruthless instinct, like a flood which is dyked at one point, breaks out in new quarters, under new modes or disguises. There is no help for it. Man is actuated by motives, and unless the motives can be changed, there will be no steadfast, no large, lasting improvement, even in material conditions. Unless a new respect for human nature as such can be won, the power will be lacking to support the efforts that are demanded, even toward material betterment. Unless the poorest of the poor are seen as beings having worth, the value to which they may justly claim will never be accorded to them. There will be a little lightening of their heavy burden, the scanty requirements of what is called a “decent” way of living may be provided, so far as is compatible with the continued living in palaces of the rich; but social reconstruction in any thoroughgoing sense will not take place.
Going back to my earlier point, ratios of CEO to average worker pay in the 100s, even 1,000s, is not just a problem because it might hinder productivity or increase risk for shareholders. It is a problem because it poses a threat to the foundations and functioning of democracy.

The central affirmation of democracy is that of moral equality--that individuals may differ in empirical abilities but that they are equally worth of dignity and respect. Formal or legal equality stems from this principle: we are all equal in the eyes of the law.

If all human beings are equally worthy of dignity and respect, then we must work to create the conditions fitting of such equal dignity and respect. Poverty, hunger, disease, ignorance, and war must be abolished. Creating conditions that acknowledge equal dignity and respect must also take into account the democratic ethos of citizenship. When those of small means cannot engage fully as citizens, the promise of democracy remains unfulfilled. Political equality is a sham in conditions of extreme economic inequality.

When those of great wealth can buy themselves justice, then no justice exists. When laws are applied unequally, as we see quite flagrantly in the drug war, then the spirit of the law rings hollow. When politicians place more emphasis on the views of their most affluent constituents, then democracy suffers.

Such inequality also increases social distance, which when, too large, can undermine the spirit that underlies the belief in democratic and moral equality. If those at the top are so far removed from those at the bottom (hundreds of times removed per hour, let's say), they will not even realize that such individuals exist and will more easily equate their own private good with the good of society at large. If corporate profits are up, the Dow reaching new heights, then the economy must be fine, they think, because the economic echo chamber in which they live says so, too. Social distance between representatives and the represented likewise threatens the health of democracy.

As Louis Brandeis once said, "We must make our choice. We may have democracy, or we may have wealth concentrated in the hands of a few, but we can't have both."

Originally posted to Liberty Equality Fraternity and Trees on Mon Dec 30, 2013 at 04:58 PM PST.

Also republished by Community Spotlight.

EMAIL TO A FRIEND X
Your Email has been sent.
You must add at least one tag to this diary before publishing it.

Add keywords that describe this diary. Separate multiple keywords with commas.
Tagging tips - Search For Tags - Browse For Tags

?

More Tagging tips:

A tag is a way to search for this diary. If someone is searching for "Barack Obama," is this a diary they'd be trying to find?

Use a person's full name, without any title. Senator Obama may become President Obama, and Michelle Obama might run for office.

If your diary covers an election or elected official, use election tags, which are generally the state abbreviation followed by the office. CA-01 is the first district House seat. CA-Sen covers both senate races. NY-GOV covers the New York governor's race.

Tags do not compound: that is, "education reform" is a completely different tag from "education". A tag like "reform" alone is probably not meaningful.

Consider if one or more of these tags fits your diary: Civil Rights, Community, Congress, Culture, Economy, Education, Elections, Energy, Environment, Health Care, International, Labor, Law, Media, Meta, National Security, Science, Transportation, or White House. If your diary is specific to a state, consider adding the state (California, Texas, etc). Keep in mind, though, that there are many wonderful and important diaries that don't fit in any of these tags. Don't worry if yours doesn't.

You can add a private note to this diary when hotlisting it:
Are you sure you want to remove this diary from your hotlist?
Are you sure you want to remove your recommendation? You can only recommend a diary once, so you will not be able to re-recommend it afterwards.
Rescue this diary, and add a note:
Are you sure you want to remove this diary from Rescue?
Choose where to republish this diary. The diary will be added to the queue for that group. Publish it from the queue to make it appear.

You must be a member of a group to use this feature.

Add a quick update to your diary without changing the diary itself:
Are you sure you want to remove this diary?
(The diary will be removed from the site and returned to your drafts for further editing.)
(The diary will be removed.)
Are you sure you want to save these changes to the published diary?

Comment Preferences

  •  Tip Jar (133+ / 0-)
    Recommended by:
    Hammerhand, Gooserock, SpecialKinFlag, Simplify, irishwitch, psnyder, corvo, psychodrew, IndieGuy, sillycarrot, Lujane, angel d, jrand, LaEscapee, MsGrin, BigAlinWashSt, lostinamerica, kevinpdx, LucyandByron, atana, Ginsu, kurt, WearyIdealist, myrmecia gulosa, dannyboy1, Lost Left Coaster, MartyM, blueoasis, DRo, jbsoul, Silvia Nightshade, maryabein, petestern, jbob, kharma, not this time, YaNevaNo, ybruti, ask, PhilJD, happy camper, Teiresias70, Kristina40, Kevskos, zerelda, Ray Pensador, I Lurked For Years, blue in NC, cv lurking gf, bookwoman, One Pissed Off Liberal, bnasley, Odysseus, eyo, harlinchi, KansasNancy, triv33, Catte Nappe, marykk, emal, unfangus, StateofEuphoria, wader, GeorgeXVIII, rapala, FogCityJohn, bsmechanic, blue jersey mom, Gowrie Gal, snazzzybird, Most Awesome Nana, NoMoreLies, lcrp, Youffraita, Chaddiwicker, sostos, RFK Lives, sfbob, NBBooks, cpresley, poligirl, roses, dotsright, Geenius at Wrok, Hawksana, TX Unmuzzled, chuck utzman, linkage, catlady, fumie, rmonroe, tegrat, thirty three and a third, ColoTim, Dodgerdog1, Tonedevil, vahana, MKinTN, alice kleeman, Amber6541, pixxer, nota bene, peptabysmal, chimene, Infected Zebra, Lefty Coaster, doinaheckuvanutjob, onionjim, Blue Bell Bookworm, letsgetreal, Hirodog, thomask, wintergreen8694, chakadog, bluehammer, MJ via Chicago, jm214, Jakkalbessie, SethRightmer, xaxnar, srelar, YucatanMan, on the cusp, DrCoyle65, RAST, Orinoco, asym, Cofcos, Mark Mywurtz, MadGeorgiaDem, Robynhood too, Laconic Lib, rlb
  •  It's Closer to 5,000 - 10,000:1 When You Con- (24+ / 0-)

    sider that 50 years ago, when our ratio was some 40:1, millions of those "1's" were citizen manufacturing workers and laborers whose jobs are now offshore for a dollar or few per day. As ownership and top management have skyrocketed, labor has plunged when the whole picture is viewed.

    We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

    by Gooserock on Mon Dec 30, 2013 at 05:17:01 PM PST

  •  Pigs at the trough.. (45+ / 0-)

    they don't earn salaries, they receive winning lottery tickets.

    Take my former employee, HP. Former CEO Carly Fiorina got canned but received 20 to 30 million for her failed efforts. Besides her regular pay, mind you.

    They bring in another hired gun, Mark Hurd, who proceeds to cut pay, benefits and heads. Along the way, the family values CEO got caught with his pants down. He made advances towards his personal "greeter" assistant (and former soft porn star). And got caught lying about his expense account.

    He received his lotto ticket as a severance, though. Some estimate at 30 million. For getting fired. Then, Larry Ellison hires him at Oracle (I wonder why?), and pays him  in the neighborhood of 70 million.  

    It gets worse. Without ever interviewing him, the BOS hires a failed CEO from SAP, Leo Apotheker.. He lasted 10 months. He did got his lotto ticket, too. We paid this bozo 4 million to move his home to America. He then announced HP was getting out of PCs. Blew our tablet roll, and paid a crap load for a software company that was since written off.

    Who do we get for our troubles, Meg Whitman. The nation is finished. The middle class is headed for disaster. And we're old they deserve their high salaries. Market demand.

    What is so unnerving about the candidacy of Sarah Palin is the degree to which she represents—and her supporters celebrate—the joyful marriage of confidence and ignorance. SAM HARRIS

    by Cpqemp on Mon Dec 30, 2013 at 05:47:20 PM PST

  •  What multiple is acceptable to you? (2+ / 0-)
    Recommended by:
    Steve Simitzis, Amber6541

    100 times?
    50 times?
    20 times?

    Clearly, a CEO is worth more to a company than a line worker (or perhaps you don't think so?)

    What multiple reflects their true worth?

    •  Well, when my Dad worked in (18+ / 0-)

      Engineering at Goodrich for 44 years, the CEO made about 20X what he made, and about 40X what entry level.

      I'd consider that a reasonable rate of compensation.

      Fiat justitia ruat caelum "Let justice be done though the heavens fall."

      by bobdevo on Tue Dec 31, 2013 at 02:46:44 AM PST

      [ Parent ]

      •  OK (3+ / 0-)
        Recommended by:
        coffeetalk, Kickemout, VClib

        The reason for my question is that it seems to me these relativity metrics are not really useful.

        One could apply the same metrics to football players or rock stars as well.  How about investors?  Should Warren Buffet be "allowed" to make that much money?

        And here's the other thing about comparative metrics...

        If McDonald's reduced their CEO's pay to 20X the lowest worker, what has that done for the worker? Nothing.

        •  If (7+ / 0-)

          we limit CEO pay as a ratio, if the CEO wants more money they must raise wages across the company.  And if the ratio drops dramatically (say to 20x instead of 1000x) then clearly the company has the money to spend to raise wages across the board.

          Would they do it that way?  I don't know, but it's one possibility.

          "I don't want a unicorn. I want a fucking pegasus. And I want it to carry a flaming sword." -mahakali overdrive

          by Silvia Nightshade on Tue Dec 31, 2013 at 05:28:48 AM PST

          [ Parent ]

          •  Not Gonna Happen. (6+ / 0-)

            1.  Much of the time, that compensation is in thinks like stock options -- not cash.  In other words, that money is not sitting around to pay somebody and the company just chooses to send it all to the CEO instead of the workers.

            2.  Much of the time, if you spread say  50% of the CEO's salary among all the employees of a company it's not enough to make much of a difference.  

            3.  If you limit CEO pay, two things will happen:  (1) it will go to things like deferred compensation; and (2) anything "extra" will go to the owners of the company in the form of profits.  There's no incentive -- none - to send the extra cash to the workers.  The companies will still pay market rates for workers -- whatever is necessary to keep the workers with the skills they want and to attract new workers with the skills they want.  If for a certain position with certain skills, the market level is $20 an hour, that's what the company will pay.  

            The idea that if you limit CEO pay a lot of extra money will flow to the workers is pretty much a pipe dream.

        •  Warren Buffett's salary has been the same (10+ / 0-)

          for 25 years. Including his other benefits, he makes around half a million a year from his job. Now, due to his work, his company usually does well. However, the only way you'll make money off of Berkshire Hathaway is buying and holding the stock, and eventually selling. It never pays dividends. Mr. Buffett believes stockholders should view themselves as company owners; the market should not be a betting pool. His annual reports are great reading too. On this page, there are pdf links to his letters - worthwhile.

          Thanks for referencing Mr. Buffett. There's a CEO we can all get behind.

          "You must not lose faith in humanity. Humanity is an ocean; if a few drops of the ocean are dirty, the ocean does not become dirty." Mohandas Gandhi

          by cv lurking gf on Tue Dec 31, 2013 at 07:20:41 AM PST

          [ Parent ]

          •  Buffet is a founder/CEO (2+ / 0-)
            Recommended by:
            coffeetalk, Pi Li

            Like other founder/CEOs that hold large equity positions Buffet's income is primarily from selling small amounts of his founder's shares, which qualify for long term capital gains treatment, and are not reflected in the compensation schedule filed in the Berkshire Hathaway proxy statement with the SEC. If a senior executive sells shares they have purchased, and own, it's not compensation even if those shares are founders' shares purchased at ten for a penny. We will likely see the same thing at companies like Google and Facebook.

            "let's talk about that"

            by VClib on Tue Dec 31, 2013 at 09:29:11 AM PST

            [ Parent ]

            •  I don't believe the company gave those to him (1+ / 0-)
              Recommended by:
              Hawksana

              as stock options, based on this quote:

              ". . . In his opinion, all Berkshire managers can use their own money (either it comes from salary or bonus money) to buy Berkshire’s stock in the stock market. “By accepting both the risks and the carrying costs that go with outright purchases, these managers truly walk in the shoes of owners.”

              as discussed here. As he did not acquire them through stock options nor other company program, but as an individual buying stock using his own money, they are not compensation and should not be reflected in the proxy statement.

              "You must not lose faith in humanity. Humanity is an ocean; if a few drops of the ocean are dirty, the ocean does not become dirty." Mohandas Gandhi

              by cv lurking gf on Tue Dec 31, 2013 at 09:48:37 AM PST

              [ Parent ]

              •  They were not stock options and therefore (5+ / 0-)

                not compensation. These were founders' shares that Buffet purchased for pennies which is how nearly all founders' shares are distributed.

                I think your comment and mine make the same point. Buffet's equity is purchased, not granted, and therefore not compensation. That works well for founders, but for a large public company it is unusual for executives to purchase, for cash, large amounts of company equity in the market and frankly not a smart investment decision on their part. People should have diversified personal investment portfolios. So if a public company wants to be competitive you need to offer some equity when recruiting senior executives and the most common form of that equity is non-qualified stock options which only have value if the stock appreciates above the price on the day they are issued. That ties the equity compensation to performance to some degree.

                The trend toward large stock option grants is due in large part to three things. The first was a law passed by Congress, now codified as 162(m) in the code, that only allowed a company to deduct for tax purposes only the first $1 million of salary. To be deductible for tax purposes all the rest of the compensation had to be based on performance. That turned the discussion to incentive compensation both cash and stock options. The second was a Sarbanes Oxley requirement for more disclosure of compensation committee processes which led to the explosion in the use of "compensation consultants". The third was the size of the equity stake that private equity investors were willing to give to the management of companies who went private. Some day I'll write a diary about all of this.

                "let's talk about that"

                by VClib on Tue Dec 31, 2013 at 10:33:32 AM PST

                [ Parent ]

                •  Please do a diary. A lot of people don't even (4+ / 0-)
                  Recommended by:
                  VClib, ColoTim, cv lurking gf, Pi Li

                  know about this:

                  The first was a law passed by Congress, now codified as 162(m) in the code, that only allowed a company to deduct for tax purposes only the first $1 million of salary. To be deductible for tax purposes all the rest of the compensation had to be based on performance.
                •  I agree that overall we're making the same (0+ / 0-)

                  point; however, just to clarify, Mr. Buffett bought up a virtually worthless company for pennies per share. It was a penny stock company rapidly failing by then. (As I am a partial owner of some bequested shares, worth about $5 versus the $75,000 invested in the company, I have a bit of understanding.) No one was given shares at the outset of his take-over of BRK.A.

                  You are quite knowledgeable, and know more than I. Sometimes diaries on finance get too simplified; I think you could write a great one so more would understand the complexity of this subject.

                  "You must not lose faith in humanity. Humanity is an ocean; if a few drops of the ocean are dirty, the ocean does not become dirty." Mohandas Gandhi

                  by cv lurking gf on Tue Dec 31, 2013 at 12:41:36 PM PST

                  [ Parent ]

                  •  I had forgotten that he bought the first company (3+ / 0-)
                    Recommended by:
                    Pi Li, cv lurking gf, mmacdDE

                    rather than started it. Was it Blue Chip Stamps that Buffet purchased?

                    When it comes to executive compensation there are only a few of us here at DKOS who have any real experience, or who have ever drafted the proxy disclosures, or negotiated a CEO compensation package. I think most executive compensation in the Fortune 1000 is outrageous but we have many diary authors who make fundamental mistakes when writing about executive compensation because they don't know anything about the laws and rules, or even what the numbers mean.

                    "let's talk about that"

                    by VClib on Tue Dec 31, 2013 at 01:59:35 PM PST

                    [ Parent ]

                    •  Quite agree; sometime it reminds me of the (1+ / 0-)
                      Recommended by:
                      VClib

                      people who think music should be free for all, forgetting the musicians are trying to make a living too. Everyone deserves compensation for work; unfortunately a few are over-compensated and many, under.

                      Here's to a great new year, with fair pay, great healthcare, and honest politicians and bankers! Oh, and no natural disasters.

                      Best to you.

                      "You must not lose faith in humanity. Humanity is an ocean; if a few drops of the ocean are dirty, the ocean does not become dirty." Mohandas Gandhi

                      by cv lurking gf on Tue Dec 31, 2013 at 03:46:06 PM PST

                      [ Parent ]

      •  Interesting (0+ / 0-)

        I work for an environmental consulting firm. Using the method outlined in the table linked by the diarist, the CEO of my employer (which I prefer to keep private) makes about 90 times the average employee and 27 times my salary.  If I ignore the stock options and other miscellaneous compensation and focus on on salary and bonus (the compensation given in cash), the CEO makes 27 times average compensation and 8 times mine.

        I'm curious if those levels seem reasonable to folks.  Of course, in my field, the average compensation is substantially above minimum wage

        •  That depends on your assumptions. (2+ / 0-)
          Recommended by:
          jbsoul, bluehammer
          I'm curious if those levels seem reasonable to folks.
          I will state that I do not believe that they do.

          There are several possible bases for pay.

          Even if you assume that "achieving a given goal" is worth X, most people would claim that "all members of the team who achieve X should receive substantially similar pay".

          The common rejoinder is that team members rarely contribute equal effort or talent.  Sure, have some variation.  But 25x?  Seriously?

          Someone who has an idea that requires teamwork to achieve has nothing.  They can't do it alone.  It's worthless.  The value comes from the team, and the value should be well distributed to the team.

          -7.75 -4.67

          "Freedom's just another word for nothing left to lose."

          There are no Christians in foxholes.

          by Odysseus on Tue Dec 31, 2013 at 10:30:47 AM PST

          [ Parent ]

        •  Ernest - if the CEO is a major rain maker (1+ / 0-)
          Recommended by:
          Pi Li

          I think its more than reasonable.

          "let's talk about that"

          by VClib on Tue Dec 31, 2013 at 02:09:01 PM PST

          [ Parent ]

    •  I'll put the question back to you (23+ / 0-)

      Yes a CEO is worth more to a company than an individual line worker.  I have no problem with people being rich.  But what do you think should be the limit?  Is 100 times not enough for you?

      Even dropping compensation to 50x a line worker would be plenty.  50 x $28,000 = 1.4 million a year.  Is that not enough?  We call teachers greedy for making $50,000 a year, but suddenly greed isn't an issue when its a CEO?  1.4 million a year enables someone to live a life of complete luxury.  Nobody needs, or deserves $40 million a year, and that $40 million dollars does a lot more good spread out among, say 4,000 people (in the form of raises) than in one person's hands.  Those 4,000 people will spend that money, rather than hoard it, and benefit many businesses.  There's a reason why business profits are up but the middle class is getting poorer and poorer.  It's being sucked up by those who already have way more than they could ever need.

      I distrust those people who know so well what God wants them to do, because I notice it always coincides with their own desires. -- Susan B. Anthony

      by bluestatesam on Tue Dec 31, 2013 at 05:30:11 AM PST

      [ Parent ]

      •  But...but...but...that's SOSHULIZM!!!!! (7+ / 0-)

        What gives you the right to determine that $1.4 million a year is "enough"?

        What about the yacht captain's salary? And what about if the yacht itself isn't big enough because your neighbor down the coast just bought a hundred and fifty-three footer? And the extra vacation home in Provence? And a spare G-550 for those "special" trips, in case the first one is down for maintenance?

        And, c'mon...everybody needs a private helicopter to drop him off at the country club when he's almost late for his tee time. And a collection of diamond-encrusted Rolexes - one for each country club - is an absolute must! Plus a few Breitlings (platinum, of course) for those more festive occasions.

        Sheesh, there's so much anti-'Murkin soshulizm bein' preached here, I feel like I'm in Cuba!

        "Bernie Madoff's mistake was stealing from the rich. If he'd stolen from the poor he'd have a cabinet position." -OPOL

        by blue in NC on Tue Dec 31, 2013 at 06:14:23 AM PST

        [ Parent ]

      •  This ^^ (19+ / 0-)

        Anything beyond a couple of million should be prohibitively taxed. It is in any case mostly hoarded and of little use to the overall economy.

        Paranoia strikes deep. Into your life it will creep. It starts when you're always afraid. You step out of line, the man come and take you away. - S. Stills

        by ask on Tue Dec 31, 2013 at 06:15:00 AM PST

        [ Parent ]

        •  And THIS! ^^ (16+ / 0-)

          As you know, that's the way it was in the 1950's and 1960's, when the top marginal tax bracket ($400,000 at the time, I believe, equivalent to around $3 million today) was taxed at 91%. Even estate taxes kicked in at a pretty low threshold.

          The middle class experienced its longest and deepest expansion in history, while the super-rich did just fine too.

          It's really the simplest solution, and it would simultaneously spur charitable giving again, reestablish the middle class, reduce poverty to near-zero, and eliminate federal deficit spending...which is why our ruling plutocracy would never consider it.

          "Bernie Madoff's mistake was stealing from the rich. If he'd stolen from the poor he'd have a cabinet position." -OPOL

          by blue in NC on Tue Dec 31, 2013 at 06:31:03 AM PST

          [ Parent ]

          •  It worked beautifully for all. (6+ / 0-)

            We went to the moon.  Our economy was the envy of the world.

            And Reagan destroyed it all, by "... letting you KEEP more of YOUR MONEY!"  The middle class ate it up, but he wasn't talking to them.  They got to "keep" a pittance more.  The people he was talking to were the 1%.  And there began the downward slide to where we are now.

            Is it a genie that can't ever be put back in the bottle?  I don't know.  

            George W. Bush: Commit war crimes, then paint pictures. Reverse of how the other fellow did it. — billmon

            by snazzzybird on Tue Dec 31, 2013 at 09:30:05 AM PST

            [ Parent ]

          •  It is difficult to compare the (1+ / 0-)
            Recommended by:
            mmacdDE

            tax rates of 1950 to tax rates of today.  In 1950 there were tax loopholes big enough to drive an airbus through. Homes, cars, personal staff, all travel and meals were all bought on the company dime.

            While the compensation today appears crazy, do you actually think a CEO in 1950 was living a much poorer lifestyle than a CEO of today?  In the end, that is really what matters.

            •  Actually, that "loophole" anecdote is not borne (4+ / 0-)
              Recommended by:
              PJEvans, Hawksana, jbsoul, MKinTN

              out by historical fact.

              Do you think that there are not loopholes, today, big enough to drive an Airbus and a C-150 through side by side?

              Look up effective total tax rates in 1950. They averaged around 55% at the top. Nowadays, they average 10-15%. See Romney, Willard Mitt.

              I agree that a CEO in 1950 did not necessarily live a much poorer lifestyle than a CEO of today. The biggest reason for that is this: exactly how many G-550's or vacation mansions does one have to own before the quality of one's lifestyle maxes out? The $100 million, $200 million net worths are funny money. After the fifth airplane or the tenth vacation mansion the net marginal "feel good" benefit is no longer noticeable. All they have is "bragging rights". They don't need it, don't use it, hoard it. But it doesn't "trickle down" through the economy, that's for sure.

              "Bernie Madoff's mistake was stealing from the rich. If he'd stolen from the poor he'd have a cabinet position." -OPOL

              by blue in NC on Tue Dec 31, 2013 at 10:42:52 AM PST

              [ Parent ]

              •  You missed my point (0+ / 0-)

                In 1950 much of the average CEOs compensation wasn't even on the books to be taxed.  Or it was written off completely (that's why we have the AMT today).

                Taxes as a percent of GDP were 14.4% in 1950.  In 2012 they were 15.8%.  If the rich were paying so much more in 1950 why is the tax receipts as a percent to GDP less today?

                Don't get me wrong, I believe that marginal tax rates need to be raised for the very rich.  I also believe that there was never a time in our history where the very rich paid their fair share.

                •  The numbers you are using are misleading. (3+ / 0-)
                  Recommended by:
                  ask, jbsoul, MKinTN

                  If you're using the same table I am, that 14.4% and 15.8% include social security taxes, Medicare taxes, excise taxes, and corporate taxes. As you know, the super-rich pay an insignificant amount in SS and Medicare tax; that is a tax that is borne heavily by the working classes.

                  Also, I believe that the income tax receipts as a percentage of GDP are higher today (7.3% vs 5.3% in 1950) because the middle class is being soaked at a far greater percentage today than in the past. Also, 1950 is a bad year to use as a base comparison because it is artificially low; rather, the rates from 1952 - 1969, where they ranged from 7.1% to 9.2%, are a much better basis for comparison.

                  No, the super-rich made a lot less money in the 1950's - no  more than 10-20 times the average worker - and they paid much more in taxes (as a percentage of income) than they do now.

                  Finally, just look at the rapidly-increasing wealth gap. How have the filthy rich been accumulating steadily more wealth from 1980 - 2012 (to the point where 400 people own more wealth than the bottom 160 million people), when those wealth curves were relatively flat right up until the launch of the disastrous Reagan "voodoo" economic policy of "soak the working poor to feather the nests of the filthy rich"?

                  I do agree completely with your last paragraph, however. :-)

                  "Bernie Madoff's mistake was stealing from the rich. If he'd stolen from the poor he'd have a cabinet position." -OPOL

                  by blue in NC on Tue Dec 31, 2013 at 11:12:00 AM PST

                  [ Parent ]

                  •  You need to stop spreading incorrect facts. (2+ / 0-)
                    Recommended by:
                    VClib, Pi Li
                    Also, I believe that the income tax receipts as a percentage of GDP are higher today (7.3% vs 5.3% in 1950) because the middle class is being soaked at a far greater percentage today than in the past
                    Again, look at CBO data in effective federal income tax rates -- the second chart here.  The effective rate for  federal income taxes for the middle quintile has gone pretty steadily down -- from 7.4% in 1979 to 1.3% in 2009.  For social insurance taxes, it's about the same today as it was in 1979, and it hasn't fluctuated all that much over the years -- always at 8 - 9%.  

                    Of course, the reason that social insurance tax rates are higher on the middle class than the top 1% is that Social Security is wage insurance and is NOT supposed to be a progressive tax.  It is wage insurance, a "you get what you pay for" system.  But  if you want to add in Social Security and Medicare Taxes to compare the overall federal tax burden on different income groups, the CBO has that data, too (PDF here).   Overall, the entire federal tax burden is much, much higher on higher earners than it is on lower income earners.  

                    •  Stop it. You are the QUEEN of "incorrect facts". (1+ / 0-)
                      Recommended by:
                      jbsoul

                      Your comments in this diary read like Hank Rearden's monologues straight out of Atlas Shrugged.

                      "Bernie Madoff's mistake was stealing from the rich. If he'd stolen from the poor he'd have a cabinet position." -OPOL

                      by blue in NC on Tue Dec 31, 2013 at 11:46:12 AM PST

                      [ Parent ]

                      •  sure, as soon as you stop making clearly wrong (2+ / 0-)
                        Recommended by:
                        VClib, Pi Li

                        factual statements.  I am using CBO data -- that I linked to -- to support the facts I am using.  

                        When you make statements like this, which are just wrong according to that CBO data I link to, you deserve to be corrected.  

                        Also, I believe that the income tax receipts as a percentage of GDP are higher today (7.3% vs 5.3% in 1950) because the middle class is being soaked at a far greater percentage today than in the past
                        That's just wrong, according to the CBO.  

                        Isn't one of the sayings around here that you are entitled to your own opinions, but not your own facts?  

              •  Wow, how wrong can one post be? (3+ / 0-)
                Recommended by:
                Sparhawk, VClib, Pi Li
                Look up effective total tax rates in 1950. They averaged around 55% at the top. Nowadays, they average 10-15%. See Romney, Willard Mitt.
                1.  As for your first point, there is no accurate data for effective rates in 1950. That's because to do it, you have to be the federal government and have access to IRS data.  And the federal government, the CBO began keeping track in 1979, when top rates were 70%. In 1979, the effective individual income tax rate for the top 1% was 22.7%.  See the SECOND CHART here. That includes both earned income and capital gains income.  If you want it directly from the CBO see pdf here.

                2.  As for your second point, "average" effective rates for the 1% has NEVER NEVER NEVER been as low as 15%.  Again, see that same chart. In 2009 (before we again raised the top marginal rate) the effective rate for the top 1% was 21%.  That meant that for every Mitt Romney, there was someone in the 1% paying an effective rate of 30%.  

                3.  The highest effective indivdual income tax rare on the top 1% was during Bill Clinton's top marginal rate of 39.6%, higher even than when the top marginal rate was 70% in 1979.  So, yes the loophole thing absolutely is "borne out by historical fact."  If you want to know more, look up the Tax Reform Act of 1986.

                •  My one post can't be anywhere NEAR as wrong (3+ / 0-)
                  Recommended by:
                  ask, samanthab, jbsoul

                  as your one post, that's for sure.

                  But you've been on this diary shilling for the filthy rich all day anyway, so why should I be surprised?

                  And yes, I'm quite familiar with the Tax "Reform" Act of 1986". As a working-class person, I was a victim of it. That was when Reagan paid for his tax cuts for the fat cats on the backs of the working class.

                  "Bernie Madoff's mistake was stealing from the rich. If he'd stolen from the poor he'd have a cabinet position." -OPOL

                  by blue in NC on Tue Dec 31, 2013 at 11:14:54 AM PST

                  [ Parent ]

                •  do not feed this one (2+ / 0-)
                  Recommended by:
                  jbsoul, blue in NC
              •  blue in NC - I have never seen any realiable data (1+ / 0-)
                Recommended by:
                Pi Li

                that showed the top 1% paid an effective rate of 55% in any period, even when the top marginal rate was 91%. Do you have a good source on that?

                "let's talk about that"

                by VClib on Tue Dec 31, 2013 at 02:11:53 PM PST

                [ Parent ]

                •  Here ya go: (2+ / 0-)
                  Recommended by:
                  VClib, AaronInSanDiego

                  Congressional Research Service, September 14, 2012 (pdf). See narrative on Page 2 and graph on Page 3.

                  Effective tax rate for top 0.1% in 1945: 55%. In 2010: 25%.

                  And I said "around 55% at the top", not the top 1%. With that in mind, the effective tax rate for the top 0.01% in 1950 was 53%. That's pretty damn close to the "around 55%" that I claimed.

                  "Bernie Madoff's mistake was stealing from the rich. If he'd stolen from the poor he'd have a cabinet position." -OPOL

                  by blue in NC on Tue Dec 31, 2013 at 02:57:20 PM PST

                  [ Parent ]

                  •  Thanks! (1+ / 0-)
                    Recommended by:
                    AaronInSanDiego

                    "let's talk about that"

                    by VClib on Tue Dec 31, 2013 at 03:02:42 PM PST

                    [ Parent ]

                    •  You're welcome. I hope "Ayn" gets it someday. n/t (0+ / 0-)

                      "Bernie Madoff's mistake was stealing from the rich. If he'd stolen from the poor he'd have a cabinet position." -OPOL

                      by blue in NC on Tue Dec 31, 2013 at 03:03:39 PM PST

                      [ Parent ]

                      •  I don't think coffeetalk is an Ayn Rand disciple (3+ / 0-)
                        Recommended by:
                        blue in NC, mmacdDE, AaronInSanDiego

                        but she clearly believes more in the free market than most of the people here at DKOS, as do I. On this topic I agree with her basic view that trying to legislate some maximum ratio between the lowest paid person and the CEO is not an appropriate public policy and would be infringing on the rights of corporations, public or private. As I have stated in this thread the way to deal with excessive compensation is to tax it at a higher marginal rate. I think that is easy to understand, accepted as legal, and without controversy.  

                        "let's talk about that"

                        by VClib on Tue Dec 31, 2013 at 03:24:21 PM PST

                        [ Parent ]

                        •  Yes, I DO agree with you on that, at least. (2+ / 0-)
                          Recommended by:
                          VClib, jbsoul

                          I can't see any reliable, accurate, and practical way to legislate income ratios either. Reestablishing very high marginal tax rates at the top would work wonders. I hardly think it would be "without controversy", however. ;-)

                          The free crony market has proven itself, somewhat recently, to be an abject failure. I cannot fathom how anybody can believe in what passes for a "free market" in the United States in 2013 (well, except the beneficiaries: the top few percent).

                          "Bernie Madoff's mistake was stealing from the rich. If he'd stolen from the poor he'd have a cabinet position." -OPOL

                          by blue in NC on Tue Dec 31, 2013 at 03:31:55 PM PST

                          [ Parent ]

                •  Oh, and since I see that you are "rec'ing" (0+ / 0-)

                  all of coffeetalk's Ayn Rand's plutocracy-pandering comments, including her ad hominem crap, I won't bother doing any more of your research for you.

                  "Bernie Madoff's mistake was stealing from the rich. If he'd stolen from the poor he'd have a cabinet position." -OPOL

                  by blue in NC on Tue Dec 31, 2013 at 03:02:45 PM PST

                  [ Parent ]

            •  That's not the right question (0+ / 0-)
              While the compensation today appears crazy, do you actually think a CEO in 1950 was living a much poorer lifestyle than a CEO of today?
              Do you actually think a person who makes $5m a year is living a 'much poorer lifestyle' than a person who makes $50m a year?

              They aren't. Above a certain point, lifestyles look pretty similar. The rest is simply hoarding, proving that you're better than everyone else by gloating over the numbers in your portfolio. That's all it's really for. Or buying senators, of course.

              But, in any case, a relative of mine was the CEO of a very large (under 10k employees, but more than 5k) company in the 1970s. He lived in a very nice five-bedroom house, but hardly a mansion, in a relatively modest neighborhood in a midwestern city. His lifestyle was, in fact, more or less identical to the one-income physician and dentist households around him, for the simple reason that his income was about the same as theirs. In contrast, the company still exists, and is roughly the same size, but the CEO now makes around 20 times what a physician does in that area.

              Yes. Aside from a few exceptions, CEOs did live differently back then than they do now.

              •  Back in those days there was mainly 1 guy running (0+ / 0-)

                the company.  Now there are many more people at the top who make millions.  Raise the tax rate to 50% on the amount over $1 million.  And since there are plenty who make over $5 million keep that tax rate increasing until we get to 75% on the amount over $5 million.  

        •  The correct public policy response (6+ / 0-)

          is higher marginal tax rates, not using the power of government to dictate some maximum ratio of CEO to worker pay.

          "let's talk about that"

          by VClib on Tue Dec 31, 2013 at 07:27:21 AM PST

          [ Parent ]

          •  I think you can definitely make a case for this (4+ / 0-)
            Recommended by:
            blue in NC, Odysseus, VClib, Hawksana

            as the most effective method of redistributing income from the top to the bottom.

            "As the madmen play on words, and make us all dance to their song / to the tune of starving millions, to make a better kind of gun..." -- Iron Maiden

            by Lost Left Coaster on Tue Dec 31, 2013 at 07:29:12 AM PST

            [ Parent ]

            •  Well, I don't disagree that taxation is a good (3+ / 0-)
              Recommended by:
              blue in NC, PJEvans, Hawksana

              way to go. On the other hand, I don't think it's fair to be sending the message to workers that their contributions aren't valuable, and that they are the ones mooching off of the hard work of others, rather than the CEO's. That's all kinds of backwards, but it's where were at as a society. Workers deserve to have self-respect, as well as society's respect.

              •   Proposal: (0+ / 0-)

                50% on everything over 2 million. But you get an additional 20 % off,  for a top of 30% if you are a retired veteran with at least 20 years duty. quarter percent for each reserve year and 1% for each active duty year.

                Purple hearts, and other medals don't count.

          •  Do you have evidence for the claim that there (1+ / 0-)
            Recommended by:
            blue in NC

            is one "correct" way to respond to vast wealth inequity? Has the Swiss economy gone in the toilet?

            •  I should have been more clear (1+ / 0-)
              Recommended by:
              Pi Li

              IMO higher marginal rates are the best way to deal with this issue.

              It will be interesting to see if any of the big Swiss companies move their headquarters to a more business friendly country of incorporation.

              "let's talk about that"

              by VClib on Tue Dec 31, 2013 at 09:04:18 AM PST

              [ Parent ]

          •  I agree (1+ / 0-)
            Recommended by:
            VClib

            and I think the Warren citation regarding transparency and letting the shareholders decide ie " the magic of the marketplace " is a good method as well.

            For now.

            “Vote for the party closest to you, but work for the movement you love.” ~ Thom Hartmann 6/12/13

            by ozsea1 on Tue Dec 31, 2013 at 10:16:48 AM PST

            [ Parent ]

        •  "Anything beyond a couple of million (4+ / 0-)
          Recommended by:
          ask, Odysseus, blue in NC, snazzzybird

          should be prohibitively taxed."

          This would bring the rapid restructuring we need. After restoring some balance to the economy, fair(er) progress can occur. We can always get better.

          Free Software, Free Society - fsf.org : Debian, not a company - debian.org

          by eyo on Tue Dec 31, 2013 at 07:42:42 AM PST

          [ Parent ]

          •  So get started. (1+ / 0-)
            Recommended by:
            Sparhawk

            Income taxes can be instituted at any level of governance.  State, county, or even city.  There are very few places this is restricted.

            So go find your local politician, and tell them to institute a 90% tax on income above $1M.

            A lot more will get done locally than nationally.

            -7.75 -4.67

            "Freedom's just another word for nothing left to lose."

            There are no Christians in foxholes.

            by Odysseus on Tue Dec 31, 2013 at 08:03:11 AM PST

            [ Parent ]

            •  Federal first, but I like the idea (1+ / 0-)
              Recommended by:
              ask

              Pile on the local, city, and state taxes if caps don't cover what is needed to begin restoring economic balance.

              Nice diversion.

              Free Software, Free Society - fsf.org : Debian, not a company - debian.org

              by eyo on Tue Dec 31, 2013 at 08:13:41 AM PST

              [ Parent ]

      •  Exactly (7+ / 0-)

        This all goes back to income redistribution, which is a dirty word, of course, because it smacks of socialism, but even Obama is willing to talk publicly about income inequality today, which is just a synonym.

        Yes, we need to redistribute income. Yes, it's going to be from the rich to the poor. And yes, rich people will keep being rich, no matter whether people like me like it or not. They'll have plenty of money. We might have to deny Mr. Burns one or two extra ivory backscratchers, or, in all seriousness, an extra house in Aspen. But it is reasonable for us to come together as a matter of public policy and say that a certain level of affluence is enough.

        The level of poverty that we're willing to allow in the USA seems to be limitless. Maybe it's time to start discussing limiting affluence? I mean, this is essentially what other countries have done to ensure better income distribution. How many billionaires are there in Sweden or Norway? Obviously we're talking about taking on some of the most powerful people in the world, so I don't want to be naive about the political difficulty of this, but this is what we need to do.

        "As the madmen play on words, and make us all dance to their song / to the tune of starving millions, to make a better kind of gun..." -- Iron Maiden

        by Lost Left Coaster on Tue Dec 31, 2013 at 06:54:04 AM PST

        [ Parent ]

      •  I like that, but when you consider brokers (1+ / 0-)
        Recommended by:
        VClib

        have been making that much and much more, I don't see CEOs willing to make less than the people trading their stock (aside from Buffett). The last broker I worked for averaged $1.5 million a year and the money manager I worked for before him made around $5-7 million a year twenty years ago. Stock options, as Coffeetalk mentions in a comment above, are part of compensation, but they do tie performance to pay. They are a good thing, as even those lower on the ladder get options. That was part of the business of several brokers for who I worked: I would research who was getting options at particular companies for cold-calls. Some had contracts with companies as their broker, giving a discounted rate to employees wishing to sell their stock options.

        It's complicated, as are most aspects of life.

        "You must not lose faith in humanity. Humanity is an ocean; if a few drops of the ocean are dirty, the ocean does not become dirty." Mohandas Gandhi

        by cv lurking gf on Tue Dec 31, 2013 at 07:33:05 AM PST

        [ Parent ]

      •  You seem to infer I am for 1000X (3+ / 0-)
        Recommended by:
        Odysseus, VClib, AaronInSanDiego

        compensation for CEO's.  Where did I say that?

        I think some CEO salaries are downright obscene.

        But, I think they are obscene on the face of it.. the actual dollar amounts are way over the top.  I simply think using a ratio is less than useful.

        And I truly was asking the diarist what he/she thought was "fair".

      •  bluestatesam - the correct public policy response (3+ / 0-)
        Recommended by:
        bluestatesam, NoMoreLies, Pi Li

        is higher marginal tax rates for all high income earners.

        Trying to have government interfere with private company compensation practices is difficult and cumbersome with many unintended consequences. If such a limit is even proposed you would see many public companies going private. It would be a boon for private equity funds.

        "let's talk about that"

        by VClib on Tue Dec 31, 2013 at 09:00:44 AM PST

        [ Parent ]

    •  What's REALLY unclear is why these companies (3+ / 0-)
      Recommended by:
      Odysseus, JJ In Illinois, blue in NC

      need a CEO at all.

      When you triangulate everything, you can't even roll downhill...

      by PhilJD on Tue Dec 31, 2013 at 06:13:46 AM PST

      [ Parent ]

    •  actually, its not clear to me how a CEO is (9+ / 0-)

      so much better to a company than someone at the bottom.

      I wasn't aware that CEO IQ's were in the 10,000+ range.  

      And, seriously? CEO's are 100-1000 times better at stretching a buck than someone making 7 or 8 or even 15 bucks an hour?

      All those millions Carly Fiorina got wouldn't have been better for the company ploughed back into R&D?

      As far as i can tell, the only thing all those banking and investment CEO's were better at was breaking the law, rigging the game and conning the rest of us into subsidizing their industry.

      So, i guess, CLEARLY, you are correct.  Especially in the banking and investment worlds, CEO's definitely did right by their respective companies.  Maybe not so much the society those companies need to exist, but who gives a shit about that, right?

      elipsii: helping the masses express aposiopesis for...

      by bnasley on Tue Dec 31, 2013 at 07:35:26 AM PST

      [ Parent ]

    •  well, Swiss, German and Japanese CEO's are (2+ / 0-)
      Recommended by:
      jbsoul, Rebecca

      around 20:1, 12:1 and 11:1 respectively.  Of course, those guys must be on freakin' food stamps and take out payday loans to survive...

      elipsii: helping the masses express aposiopesis for...

      by bnasley on Tue Dec 31, 2013 at 09:53:25 AM PST

      [ Parent ]

    •  An acceptable multiple is 40 to 50 to one. (5+ / 0-)

      The multiple in 1982 in USA was 42:1, according to the AFL-CIO. According to a comparison based on OECD data, the ratio Japan in 67:1, and in Germany is 147:1.

      I think Ian Welsh has one of the best and most concise critiques of the situation today. In 44 Explicit Points on Creating a Better World, Welsh speaks directly to the idea that "Clearly, a CEO is worth more to a company than a line worker":

      10) Most profits today are extracted value, they are not actual surplus value.  Instead they represent destruction of actual economic productivity.  Every cent the financial sector “earned” from 2000 to 2007 was destroyed, ten times over, in the crisis and the depression after the crisis.

      11) Actual value is not rewarded.  A janitor or a garbageman or a teacher or a nurse or an assembly line worker or an engineer produces real value.  If the CEO does not come in tomorrow, so what?  If the janitor doesn’t, everyone is complaining immediately.  The people we call value creators today are mostly value extractors: their job is to squeeze hard, to monetize, not to create new products which are genuinely beneficial to the world, not to create workers who are well paid and thus able to provide demand, not to create better paying work, but worse paying work.

      It was not always this way. There was a time, if you can believe it, that US corporations boasted of how well they paid their employees. In 1916, one of the largest corporations of the time, the Pennsylvania Railroad, issued a privately circulated 31 page history on the 70th anniversary of its founding, Seventy years of America's greatest railroad, The Pennsylvania 1846 - 1916. From the Foreword:
      The greatest industrial achievement of the United States is its railroad system. Other countries have achieved greatly in manufacturing, in farming, and in mining. But in no country in the world has a transportation system been developed equal to that of the United States. The railroads in this country carry their freight at a cheaper rate, they pay higher wages to their labor, they pay out a greater percentage of their earnings in the form of taxes, than the railroads of any other country in the world.

      Can you think of any corporation or industry today that boasts it pays higher taxes and pays its workers more than anywhere else in the world?

      In fact, a general equality of income and wealth was considered a requirement for the maintenance of republican self-government. The second most influential work, after The Federalist Papers, in securing the ratification of the Constitution was Noah Webster's October 1787 An Examination into the Leading Principles of the Federal Constitution, in which we read:

      Wherever we cast our eyes, we see this truth, that property is the basis of power; and this, being established as a cardinal point, directs us to the means of preserving our freedom.... A general and tolerably equal distribution of landed property is the whole basis of national freedom.... An equality of property, with a necessity of alienation, constantly operating to destroy combinations of powerful families, is the very soul of a republic--While this continues, the people will inevitably possess both power and freedom; when this is lost, power departs, liberty expires, and a commonwealth will inevitably assume some other form.
      This is rather standard classical republican theory, as developed during the Italian Renaissance and transmitted through the English Enlightenment. For example, a number of Italian city-states such as Sienna and Florence, enacted laws forbidding rich people from building towers in their homes above a certain height. The goal was to prevent the rich from building too formidable and defensible a fortress. The goal was exactly to leave them always feeling some vulnerability; always having to worry about an insurrection of the people. This was part of the political theory of a republic: don't let the rich exercise too much influence and control in public affairs, or they will misuse the powers of the state to enrich themselves even more, and will corrupt the republic into an oligarchy.

      In 44 Explicit Points on Creating a Better World, Welsh writes:

      28) We can all be prosperous, but we can’t all be rich.  Having hundreds of billionaires is exactly why you haven’t had a real raise in 30 years.

      29) Concentrations of wealth are used to protect that wealth and buy up the system.  That is why they can’t be allowed.  The first thing someone does who wins the market, is buy the market, and that means buying the government.

      In What is an economy?, Welsh reiterates a definition of money that allows us to use it in a manner coherent with the classical republican theory the United States was founded on:  
      Money, as my friend Stirling Newberry has noted, is permission: it is the right to decide what other people do with their time.  Money lets you buy up people who spend all day lobbying government, it lets you create political movements, it lets you buy up think tanks and universities, it lets you create your own mercenary army.  If you are throwing off more money than other industries, it lets you take over those industries. It lets you buy government, and thus control the rules.
      In Too Much Money Chasing The Wrong Returns, Welsh lays it out in starkly simple terms:
      Money is a social creation, it is permission to tell people what to do.  You do not give money, and permission, to those who use it badly.... A basic rule of economic governance is this: when the “private” sector is not doing productive things with money, you must either change the incentives so they are, or simply take the money away from the people who are using it in unproductive ways and spend it yourself.... The first step to getting out of our current mess, then, is 95% marginal tax rates  on all income over 5 million, 90% on all income over 1 million, and a huge increase of corporate tax rates to over 70% unless they are doing what is in the public interest.  (Tax breaks on 20% corporate taxation rates do not affect corporate behavior.).... Do not give money,  free money, to people who are not spending it in ways beneficial to society as a whole.

      And take away money from people who are spending it in harmful ways.

      Let me include one more quote from Welsh, and remind you of classical republican theory and its treatment of the rich:
      22) The most important rule of all is this: your elites must experience the same life as ordinary people.  They must go to the same shitty schools (no private schools, no enriched schools, no Ivy League).  They must fly on the same planes and go through the same security (they don’t), they must use the same healthcare and stew in the same wards in the same rooms as the poorest of the citizens.  They must eat the same food, rather than being able to buy high quality food the poor can’t.  If they don’t experience what you experience, they will not care what is happening to you.  And they don’t.  Why should they when they’re the richest riches the world has ever known. The world is great, to the rich and powerful.

      A conservative is a scab for the oligarchy.

      by NBBooks on Tue Dec 31, 2013 at 10:05:36 AM PST

      [ Parent ]

    •  50 times (3+ / 0-)
      Recommended by:
      samanthab, blue in NC, jbsoul

      ought to be enough. 100 time is generous.
      No way do executives earn mare than five million a year plus benefits. NONE of them deserve big golden parachutes when they're fired or the company is losing money or firing - excuse me, 'laying off' - employees. Severance pay, okay - a million ought to cover it.

      (Is it time for the pitchforks and torches yet?)

      by PJEvans on Tue Dec 31, 2013 at 10:46:20 AM PST

      [ Parent ]

    •  Cicero or someone back then (2+ / 0-)
      Recommended by:
      blue in NC, jbsoul

      opined that the ideal wealth/earnings ratio for a sane and sound society should be 10 to 1.

      Does the President of the US have less responsibility that the CEO of McDonald's?

    •  Really (1+ / 0-)
      Recommended by:
      jbsoul

      Do you know what a CEO does. They surround themselves with great minds and lay responsibility on them while they act in a figurehead position. They all answer to boards and must get approval of all large company directions. What should a person make that hires better people than themselves to run a company? Certainly not what they're making. I could understand if they ever had to face a penalty for something that happened while acting as figurehead. But as we all have seen, there is no responsibility for anything they do. Wow, we just got fined $100 million on that two billion illegal deal. That's incentive for a bigger paycheck, not a reason for discipline!

    •  Raise the tax to 50% on the amount over a million (0+ / 0-)
  •  No particular comment... (15+ / 0-)

    Been kinda slim on those comments lately but wanted to thank you for an awesome & valuable piece of work, LEFT.

    Key operative word in this diary: democracy.

    Sure does... Poetry:

    Such inequality also increases social distance, which when, too large, can undermine the spirit that underlies the belief in democratic and moral equality.
  •  Amazing quote (14+ / 0-)
    "We must make our choice. We may have democracy, or we may have wealth concentrated in the hands of a few, but we can't have both."
    •  Probably all we need to hear too. (7+ / 0-)

      "It is easier to pass through the eye of a needle then it is to be an honest politician."

      by BigAlinWashSt on Mon Dec 30, 2013 at 08:25:13 PM PST

      [ Parent ]

    •  Warren understands economics (1+ / 0-)
      Recommended by:
      Sparhawk

      Ill go out on a limb and say "you don't".

      There are many reasons to increase effective pay for uneducated labor.

      Productivity is not one of them.

      In a single day it is very fair to say that a CEO has more impact on the world and company than what a cashier will have over 3 or 4 years.

      Its a combination of corporate leaders having a meaningful impact on the world, and cashiers having little to no impact/value on the world at large.

      •  Oooh, snap! (25+ / 0-)

        You don't understand economics! Also, your mother was a hamster.

        Seriously, it is like you haven't been paying attention, at all, for the last decade. We're talking about CEOs who have done an abysmal job (did you see the comment about HP above? That's a perfect example) who are still receiving massive compensation packages that are in no way tied to performance.

        Do you honestly think that salary should be tired directly to your "impact on the world"? Seriously? I have a question for you: do you have any clue what Barack Obama's salary is, especially compared to, say, the CEO of a candy company? How about the CEO of a cigarette company? Or even a liquor company? What kind of impact on the world are they having? Should they have a negative salary if they're having a net negative impact on the world?

        What about Wall Street? Besides the fact that they often have a negative impact on the world, a lot of Wall Streeters just shift money around all day, trying to get a piece of it for themselves. What impact on the world are they having? Why do they receive such extravagant salaries, even higher, say, than doctors working in refugee camps?

        And why don't these CEOS try to have their impact on the world without standing on the backs of all those cashiers who can barely afford to feed their families? And how do you expect to run a prosperous economy when so many workers make so little?

        Oh, but you're the one who understands economics. Right. CEOs pump their companies for every penny that they get, and then they cash out, regardless of the condition that they leave their companies in, and to you, I guess this is the best of all possible worlds? Nonsense.

        "As the madmen play on words, and make us all dance to their song / to the tune of starving millions, to make a better kind of gun..." -- Iron Maiden

        by Lost Left Coaster on Tue Dec 31, 2013 at 04:06:36 AM PST

        [ Parent ]

        •  And his father smells of elderberries! (9+ / 0-)

          "Without a shadow of a double"!  Give that man a raise!  LOL

          Thank you LLC, for making strong arguments with humor, logic, eloquence,  and passion.

        •  Actually, your salary should be set by (4+ / 0-)
          Recommended by:
          Sparhawk, VClib, nextstep, Pi Li

          the people paying the money -- the owners of the company.  That's why Warren is proposing transparency -- so the people paying that CEO salary know exactly what they are paying.  Warren's approach is far, far more realistic than some here.  

          And generally, the salary is based on your impact on the company.   And in a big company like Starbucks, the CEO's influence on Starbucks is huge multiples over the influence of the local barista.  How many multiples?  That's generally up to the people paying the money.

          It's the same thing, for example, in entertainment.  Brad Pitt is worth huge multiples more to a movie than the PA getting the coffee.  How many multiples more?  that's up to the people paying him.  

          •  Bargaining power, not just "impact," has a huge (6+ / 0-)

            influence over what you get paid -- or are we forgetting the lessons of unions already?

            Edward McClelland made this point very well in an essay published at Salon yesterday.

            The argument given against paying a living wage in fast-food restaurants is that workers are paid according to their skills, and if the teenager cleaning the grease trap wants more money, he should get an education. Like most conservative arguments, it makes sense logically, but has little connection to economic reality. Workers are not simply paid according to their skills, they’re paid according to what they can negotiate with their employers. And in an era when only 6 percent of private-sector workers belong to a union, and when going on strike is almost certain to result in losing your job, low-skill workers have no negotiating power whatsoever.
            What workers make, whether they are CEOs, executives, or baristas, is a function of their bargaining power. CEOs have the connections, the ivy credentials, altogether the negotiating power, to get what they want out of their boards of directors, who in many companies bend to the CEO's will. A single barista, it is true, will never be able to convince her or his bosses at Starbucks to raise her/his hourly wages. But collectively, yes, they can, because what is Starbucks without its baristas? The company would be nothing. So, as the essay above discusses, the companies use everything they can to limit the workers' power to bargain collectively.

            It is union busting, not some inherent lack of value in their work, that keeps the wages of many service sector employees low. This is what we should be fighting to change -- to ensure that all workers have access to their lawful right to organize collectively. And, I mean, little ol' me sitting here on my computer doesn't have to say anything, because fast food workers across America, for example, are in fact fighting back and recognizing that their collective power is what it is going to take to raise their wages.

            "As the madmen play on words, and make us all dance to their song / to the tune of starving millions, to make a better kind of gun..." -- Iron Maiden

            by Lost Left Coaster on Tue Dec 31, 2013 at 06:41:27 AM PST

            [ Parent ]

      •  Thank you, Ayn. n/t (3+ / 0-)
        Recommended by:
        jbsoul, samanthab, angel d

        "Bernie Madoff's mistake was stealing from the rich. If he'd stolen from the poor he'd have a cabinet position." -OPOL

        by blue in NC on Tue Dec 31, 2013 at 06:18:15 AM PST

        [ Parent ]

      •  Leverage is not skill. (2+ / 0-)
        Recommended by:
        samanthab, angel d
        In a single day it is very fair to say that a CEO has more impact on the world and company than what a cashier will have over 3 or 4 years.

        Its a combination of corporate leaders having a meaningful impact on the world, and cashiers having little to no impact/value on the world at large.

        Stipulating that you are correct, because it's not worth fighting over, you still don't prove a useful case.

        The null hypothesis is that many people in the CEO position would make the same decisions, or at least decisions within a specific delta.

        We don't get to perform the counterfactual experiment and see what anyone else WOULD actually do, because there is only one such position.

        The null hypothesis does not support high CEO pay.

        -7.75 -4.67

        "Freedom's just another word for nothing left to lose."

        There are no Christians in foxholes.

        by Odysseus on Tue Dec 31, 2013 at 08:11:03 AM PST

        [ Parent ]

        •  Take it up with shareholders then (4+ / 0-)
          Recommended by:
          coffeetalk, Odysseus, nextstep, VClib

          They obviously think that you're not right since they aren't willing to risk sizeable amounts of cash for a relative pittance of a CEO salary.

          In the context of the entire economy or a particular company, CEO salaries are small potatoes. High CEO salaries contribute to "inequality", but is this actually the problem?

          The problem is low salaries for most workers, not high salaries for a few. A simple thought experiment shows why. We'll posit that we can make some deal where Walmart workers all get paid $2/hr more across the board in exchange for quadrupling the salaries of Walmart top executives. Would you take this deal? You'd be stupid not to, yet "inequality" is higher after the deal than before.

          (-5.50,-6.67): Left Libertarian
          Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

          by Sparhawk on Tue Dec 31, 2013 at 09:39:41 AM PST

          [ Parent ]

          •  Do we enshrine best practices into law? (1+ / 0-)
            Recommended by:
            jbsoul
            In the context of the entire economy or a particular company, CEO salaries are small potatoes. High CEO salaries contribute to "inequality", but is this actually the problem?
            I will stipulate for the entire economy.
            I will not stipulate for individual companies.

            "Tens of millions" is enough to produce an entire new product from scratch.  That's a huge bar to cross over for proving CEO worth.

            And corporate charters are written by the government.  In a representative system, we all get a say.  If enough people are convinced that corporate charters should be limited by statute to include compensation restrictions, so be it.

            -7.75 -4.67

            "Freedom's just another word for nothing left to lose."

            There are no Christians in foxholes.

            by Odysseus on Tue Dec 31, 2013 at 10:20:25 AM PST

            [ Parent ]

            •  You assume... (2+ / 0-)
              Recommended by:
              coffeetalk, VClib

              ...you have any idea what best practices are. Corporate shareholders might not either, but it's their money on the line not yours. Substituting the judgment of those actually taking the risks with the judgment of government bureaucrats is something that has a long storied history in places like the Soviet Union.

              So go ahead, set those rules by a majority that will watch jobs and opportunities leave these lands permanently. Your suggestion is a giant neon DON'T DO BUSINESS IN THE US sign.

              (-5.50,-6.67): Left Libertarian
              Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

              by Sparhawk on Tue Dec 31, 2013 at 10:34:43 AM PST

              [ Parent ]

              •  Good thing nobody's doing that then. (1+ / 0-)
                Recommended by:
                samanthab
                Substituting the judgment of those actually taking the risks with the judgment of government bureaucrats is something that has a long storied history in places like the Soviet Union.
                You're better than this.

                I have not advocated this today, nor have I seen any indication that other respondents are either.

                -7.75 -4.67

                "Freedom's just another word for nothing left to lose."

                There are no Christians in foxholes.

                by Odysseus on Tue Dec 31, 2013 at 11:23:19 AM PST

                [ Parent ]

                •  You have (3+ / 0-)
                  Recommended by:
                  coffeetalk, nextstep, VClib

                  You are proposing to limit the kinds of agreements that private individuals can freely engage in. You want to substitute your judgment for other people's in business because you think your position is better, more fair, what have you than theirs.

                  (-5.50,-6.67): Left Libertarian
                  Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

                  by Sparhawk on Tue Dec 31, 2013 at 11:29:31 AM PST

                  [ Parent ]

                  •  Not at all. (0+ / 0-)
                    You are proposing to limit the kinds of agreements that private individuals can freely engage in.
                    Not just no, but hell no.

                    You are free to sign any contract you want, as a principal.  We would be far better off as a nation if people did that rather than relying on the government policy of the corporate charter.

                    -7.75 -4.67

                    "Freedom's just another word for nothing left to lose."

                    There are no Christians in foxholes.

                    by Odysseus on Tue Dec 31, 2013 at 12:38:56 PM PST

                    [ Parent ]

          •  so that's why (1+ / 0-)
            Recommended by:
            blue in NC

            shareholders get no say in CEO salaries?
            Boards of directors, when a motion comes up at an annual meeting on this, always turn it into an advisory action, not one they have to pay attention to.

            (Is it time for the pitchforks and torches yet?)

            by PJEvans on Tue Dec 31, 2013 at 10:55:46 AM PST

            [ Parent ]

    •  Just proves that pretty much all of them (5+ / 0-)
      Recommended by:
      ozsea1, dinazina, jbsoul, NoMoreLies, angel d

      are part of the corrupt oligarchy.

      I really believe that there's no hope left for our country. The only consolation is that it will all topple down soon under the weight of the greed and hoarding at the top, but the fall won't be pretty for any of us.

      "Bernie Madoff's mistake was stealing from the rich. If he'd stolen from the poor he'd have a cabinet position." -OPOL

      by blue in NC on Tue Dec 31, 2013 at 06:17:22 AM PST

      [ Parent ]

  •  These numbers do not scare/worry me (4+ / 0-)
    Recommended by:
    Shifty18, coffeetalk, Kickemout, VClib

    The value of what the CEO does at McDonalds' does in a single hour is probably more than what 1,196 cashiers create in a single hour.

    There is reason to worry about CEO's getting paid too much, but there is also no reason to overestimate the value  of unskilled labor.

    The 12:1 rule is simply batshit crazy. The impact that the CEO of any multinational company has is without a shadow of a double FAR more than the impact of 12 cashiers.

    •  Yes unskilled labor is only worth so much (16+ / 0-)

      But without those cashiers, your CEO would have nothing.  And don't forget that taxpayers are picking up the tab for medical care, food stamps and all kinds of programs so that McDonalds can pay well under a living wage.

      Wouldn't you rather McDonald's foot the bill for their employees rather than the taxpayer?

      I distrust those people who know so well what God wants them to do, because I notice it always coincides with their own desires. -- Susan B. Anthony

      by bluestatesam on Tue Dec 31, 2013 at 06:05:19 AM PST

      [ Parent ]

      •  Limiting the pay of McD's CEO (13+ / 1-)

        will do nothing -- nada - to raise the salary of the person behind the counter.  

        For starters, the local person behind the counter is typically employed by a local owner -- a franchise owner -- not McD's.  

        But even if it were the same company, if you limit CEO pay, these things will happen (1) the money will go to CEO's in deferred compensation agreements, stocks, that kind of thing (to the extent it is not already); or (2) the extra money (to the extent there is anything significant -- people here tend to vastly overestimate what kind of financial difference to a large company the CEO pay makes -- the money will go to the owners in the form of profits.  

        Warren is right.  The most realistic thing the government can do is make sure those paying the money -- the owners of the company - know what they are paying the CEO.  The government has no business telling the owners of a company how to spend their money.  

        •  HR: RW trolling (3+ / 0-)
          Recommended by:
          cville townie, angel d, poco

          "The government has no business telling the owners of a company how to spend their money" is a very very old, bedrock RW idea.

          We may consider this cat finally belled, people.

          BUSTED.

        •  That, my friend, is horseshit (11+ / 0-)
          The government has no business telling the owners of a company how to spend their money.  
          The government tells companies how to spend their money all the time.

          What do you call it when the government requires a coal plant to install certain types of pollution mitigation equipment? What do you call it when the government requires a construction company to provide hard hats and steel toed boots to all its employees? What do you call it when the government requires a developer to pay for improvements to a public park or road as part of a private project?

          C'mon -- maybe in some kind of libertarian paradise every company can spend every single one of its dollars exactly how it pleases, but this does not match reality in America, or any country.

          "As the madmen play on words, and make us all dance to their song / to the tune of starving millions, to make a better kind of gun..." -- Iron Maiden

          by Lost Left Coaster on Tue Dec 31, 2013 at 07:01:38 AM PST

          [ Parent ]

          •  Sigh. Not the same thing AT ALL. (6+ / 0-)

            The government can set parameters on your investment choices.  If you are Exxon, the government can say, if you open a refinery, it has to meet this requirements.  If you drill in the Gulf, you have to meet these requirements. That's what you are talking about.

            But if Exxon makes $1 billion in profits, government has no business telling Exxon, you have to spend that $1 billion on a new refinery rather than drilling in the Gulf of Mexico. Government has no business saying, you can build a new refinery, but you can only spend $900,000,000 doing it.

            A CEO is an investment.  If you limit how much cash compensation they are paid, businesses will find other ways to invest in them.  Steve Jobs was only "paid" $1 a year.  He became a zillionaire other ways.  

            •  the government (2+ / 0-)
              Recommended by:
              blue in NC, cville townie

              can't even make Exxon, an extremely profitable corporation, pay the taxes it actually owes.

              CEOs aren't valuable except in the work they actually do. If a company is as good as it thinks, it shouldn't have to hire outside CEOs, and it certainly shouldn't pay them multiple millions a year PLUS more millions when they're fired.

              (Is it time for the pitchforks and torches yet?)

              by PJEvans on Tue Dec 31, 2013 at 11:00:57 AM PST

              [ Parent ]

              •  Just wrong. (4+ / 0-)
                Recommended by:
                VClib, Pi Li, cville townie, O112358
                the government can't even make Exxon, an extremely profitable corporation, pay the taxes it actually owes.
                Just like every other taxpayer, Exxon only owes what the law says it owes. If Exxon does not follow the law, Exxon pays not only what it owed, but interest and penalties on top of that.  And that's if the mistake was from carelessness.  If they intentionally did not pay what the law says they owed, somebody can go to jail for tax fraud.  The IRS has a whole bunch of auditors who go to big companies like Exxon and examine all their books on a regular basis. Maybe they could do a better job but the government absolutely CAN make a profitable company pay "the taxes it actually owes."

                The problem is that under the law as it's written, some of these big companies don't legally OWE enough in taxes.  that's the fault of a horrible corporate tax code, where there are high stated rates but it's so complex that some companies pay close to that in effective rates and some companies pay far, far, far less in effective rates -- perfectly legally. The corporate tax code definitely needs to be re-done.  But that's not AT ALL the same thing as saying that companies who have low effective rates under the current tax code don't pay "what they actually owe."  They DO pay what they "actually owe" under the law.  That's the problem.  

              •  Exxon pays massive taxes. What evidence do (2+ / 0-)
                Recommended by:
                coffeetalk, Pi Li

                you have they pay less than what they owe?  What do you know that the IRS does not?  

                The most important way to protect the environment is not to have more than one child.

                by nextstep on Tue Dec 31, 2013 at 11:36:35 AM PST

                [ Parent ]

            •  Ha ha, listen to yourself. (1+ / 0-)
              Recommended by:
              jbsoul
              The government can set parameters on your investment choices.
              A CEO is an investment.
              Looks like we're in agreement after all, then! We're merely asking for some parameters on the company's investment choices.

              "As the madmen play on words, and make us all dance to their song / to the tune of starving millions, to make a better kind of gun..." -- Iron Maiden

              by Lost Left Coaster on Tue Dec 31, 2013 at 11:10:34 AM PST

              [ Parent ]

              •  No. The Government can regulate (2+ / 0-)
                Recommended by:
                VClib, Pi Li

                CEO pay through tax policy. Government already does that by the IRS code, which says, as VClib pointed out:

                The first was a law passed by Congress, now codified as 162(m) in the code, that only allowed a company to deduct for tax purposes only the first $1 million of salary. To be deductible for tax purposes all the rest of the compensation had to be based on performance.
                What government can't do is say, if I want to pay a person $x to do a job, that's too much, I can't pay him that much, and he can't demand that much.  It can impose TAX CONSEQUENCES on those choices, but it can't -- and shouldn't -- tell business that it can't make those choices even if it wants to with the tax consequences.
                •  It can't how? (0+ / 0-)

                  What clause of the Constitution would this be in violation of? Has the Supreme Court made any relevant rulings? These are honest questions, not rhetorical ones. I'd genuinely like to know.

                  "As the madmen play on words, and make us all dance to their song / to the tune of starving millions, to make a better kind of gun..." -- Iron Maiden

                  by Lost Left Coaster on Tue Dec 31, 2013 at 12:03:23 PM PST

                  [ Parent ]

                  •  It depends on (5+ / 0-)

                    (1)  the purpose for doing it (and what data you have to back up that purpose and show it is necessary) and (2) what kind of limits you enact.  

                    Constitutionally, you'd look at the Contracts Clause, because what you'd be talking about is limiting the ability of two private entities/individuals to contract on the economic terms they want.  One case to look at is Energy Reserves Group v. Kansas Power & Light.

                    I'm not sure how it would play out, depending on how you did it.  But I strongly suspect that a blanket "private companies can't compensate a person above $x amount" would be challenged.

                    I don't think, for example, enacting a compensation cap because "people shouldn't make that much money" or "government doesn't think anyone is worth that" would pass muster as a "significant and legitimate public purpose" under that case.  I suspect there would be substantial argument whether limiting income is a "significant and legitimate public purpose."  

                    Government has far more leeway when it comes to taxing, of course.

                •  So you're a liar. (1+ / 0-)
                  Recommended by:
                  blue in NC

                  Your words:

                  "The government has no business telling the owners of a company how to spend their money."

                  Or is CEO pay entirely divorced from how a company spends its money?

                  Busted AGAIN, coffee. One or the other. Fucking pick one, but don't piss on our heads and tell us it's raining.

        •  Nice 2 coffeetalk! (6+ / 0-)

          2.  Pretend it’s hopeless because we’ll be squashed if we try.

          Most of your comments can be matched to either The 15 Rules of Web Disruption, or the Twenty-Five Rules of Disinformation. Maybe this is why people think you are trolling.

          Free Software, Free Society - fsf.org : Debian, not a company - debian.org

          by eyo on Tue Dec 31, 2013 at 07:25:43 AM PST

          [ Parent ]

          •  Sorry if reality is not what people want. (6+ / 0-)

            But limiting CEO pay is NOT going to cause these companies to suddenly significantly increase the pay of all their workers.  It's just not.  That's not how companies operate.  I suspect Elizabeth Warren understands that.  It's kind of sad that a lot of people here don't.  

            And it won't even keep CEO's from getting rich.  Steve Jobs earned $1 a year as CEO.  

            What will help income inequality is (1) more good paying jobs and (2) giving people the opportunity to gain the skills to move into those better paying jobs.  

        •  Uprated for egregious HR abuse. n/t (3+ / 0-)
          Recommended by:
          VClib, Pi Li, IndieGuy
        •  Uprated for the bogus HR. (0+ / 0-)
      •  Also, too (6+ / 0-)

        What about the minimum wage? Isn't that an example of the government telling companies how to spend their money? Are you opposed to the minimum wage? If yes, at least your position is consistent, I guess.

        "As the madmen play on words, and make us all dance to their song / to the tune of starving millions, to make a better kind of gun..." -- Iron Maiden

        by Lost Left Coaster on Tue Dec 31, 2013 at 07:16:46 AM PST

        [ Parent ]

        •  Perhaps I should have been clearer. (3+ / 0-)
          Recommended by:
          VClib, Sparhawk, Pi Li

          Government can put parameters on your choices as to how to spend your money.  Government can say, IF you choose to invest in a new plant, it must meet these parameters or IF you choose to open a new store, these are the laws that apply, or IF you choose to hire a new worker, you must comply with these laws.  That's defining the choices a business has as to how to spend its money.

          What government can't do is say to Starbucks, See that extra million you have?  You have to hire 30 new workers rather than build a new Starbucks store.  Government can define the choices as to how to spend money, but it can't tell a business which choice to make. That's what I meant by government can't tell a business how to spend its money.  It can say, IF you choose to spend your money this way, this is what goes with that choice.  

          A CEO is an investment. And if government limits CEO "pay" (as in Steve Jobs'$1 a year) business can find other ways to invest in a CEO if that business think that this particular person will be the best use of their money to add value to the company.  

      •  Sorry reply went to wrong comment (0+ / 0-)

        for some reason.

        "As the madmen play on words, and make us all dance to their song / to the tune of starving millions, to make a better kind of gun..." -- Iron Maiden

        by Lost Left Coaster on Tue Dec 31, 2013 at 07:17:38 AM PST

        [ Parent ]

      •  and anyone who's ever had (4+ / 0-)
        Recommended by:
        blue in NC, catlady, cpresley, jbsoul

        one of those 'unskilled' jobs knows that it's neither unskilled nor easy.

        (Is it time for the pitchforks and torches yet?)

        by PJEvans on Tue Dec 31, 2013 at 10:56:53 AM PST

        [ Parent ]

        •  and can make or break a company' reputation (2+ / 0-)
          Recommended by:
          jbsoul, bluehammer

          The unskilled workers have to be courteous, helpful, efficient, pleasant, patient, trustworthy, organized, energetic, resilient, and resourceful in order for the company to have quality control and good service.  This is part of their brand and is the real life advertising that leads people to return to the establishment happily as opposed to grudgingly.  I shop at a supermarket with the workers who have these qualities.  Interestingly enough, that supermarket has a union.  I do believe that when you treat workers fairly that you get better service.  Extreme pay inequality hurts all aspects of our country, but I also believe it hurts the actual companies themselves.  

          •  And that's a legitimate reason for paying (2+ / 0-)
            Recommended by:
            VClib, Pi Li
            but I also believe it hurts the actual companies themselves.

            more than the bare minimum that you have to pay.  I fully agree with that.  Our business pays at or near the top of the pay scale in our area for that very reason.  

            I think the bigger questions is who gets to make that decision.  While government sets minimums through the minimum wage, in our system, the owner(s) of the business get to decide how much more they are willing to pay to workers -- even up to the CEO -- to benefit the business.  

    •  Please explain why these companies need a CEO (5+ / 0-)

      at all.

      When you triangulate everything, you can't even roll downhill...

      by PhilJD on Tue Dec 31, 2013 at 06:17:30 AM PST

      [ Parent ]

    •  Seriously? (8+ / 0-)

      Some suit sitting in his office for an hour produces more value than 1,196 workers who are actually cranking out the goods and services that create the revenue stream that the CEO skims for his multimillion dollar salary? Suppose the CEO misses a day of work, and the next day 1,200 workers don't show up. Which of those days will be a worse day for the company's bottom line?

      Or how about this: let 12 workers start their own burger joint--I'd bet they get along just fine without the CEO, and get to keep more of the $$$ they generate. The CEO, OTOH, is not going to have much luck churning out burgers without those 1,200 workers. They need us far more than we need them.

      Let me guess... you're a business school grad?

      "A lie is not the other side of a story; it's just a lie."

      by happy camper on Tue Dec 31, 2013 at 06:29:27 AM PST

      [ Parent ]

      •  I'll venture to say you have no idea (4+ / 0-)
        Recommended by:
        Sparhawk, VClib, nextstep, Pi Li

        what a good CEO does.  I'll give you a hint: they don't "sit around the office" doing nothing.  

        And if anyone could start their own business without working hard -- and without risking their investment -- and become very successful, everyone would do that.  

        •  So... (6+ / 0-)

          you think one person receiving 1200 times the pay of another is justified? The CEO doesn't shit money. Whatever he is doing, he--and the shareholders--still rely on the work performed by those people on the bottom of the ladder as the ultimate source of their own pay. Wealth--all wealth--is generated by labor, not capital. The CEO may cleverly find a way to buy mustard for less, but unless and until someone puts it on a burger, there's no profit.

          "A lie is not the other side of a story; it's just a lie."

          by happy camper on Tue Dec 31, 2013 at 07:21:42 AM PST

          [ Parent ]

          •  Sometimes a CEO absolutely is. (3+ / 0-)
            Recommended by:
            VClib, Sparhawk, Pi Li

            I'll venture to say that Steve Jobs was worth 1000 times more to Apple shareholders than the person with an entry level position at an Apple store.  There are LOTS of people who could do what the entry level person does.  I suspect there aren't many people out there with the vision for what the consumer wanted that Jobs had.  You may not LIKE Apple products, but there's no question that he added 1000 times more value to that company than the person who worked as an entry level position in an Apple store.  

            Of course, Steve Jobs salary was $1.  He became a zillionaire other ways.  Which shows you what will happen if you "limit" CEO salaries.  

            •  99% of CEOs aren't Jobs. (4+ / 0-)
              Recommended by:
              samanthab, blue in NC, angel d, PJEvans
              You may not LIKE Apple products, but there's no question that he added 1000 times more value to that company than the person who worked as an entry level position in an Apple store.
              Jobs transformed three different industries during his career, not just companies.  Very, very few people can do that.  Jobs was worth every dollar he was ever paid and then some.

              So what?

              There are far more Ken Lays in C-suites today than Jobs clones.

              -7.75 -4.67

              "Freedom's just another word for nothing left to lose."

              There are no Christians in foxholes.

              by Odysseus on Tue Dec 31, 2013 at 08:15:00 AM PST

              [ Parent ]

              •  How do you know what a CEO is worth (3+ / 0-)
                Recommended by:
                Sparhawk, VClib, Pi Li

                to a particular company? That's the my point -- who gets to make that decision of what a CEO is worth to a particular company?  

                Who gets to make the decision as to how much Peyton Manning is worth to the Denver Broncos?  Who gets to make the decision as to how much Robert Downey Jr. is worth to a movie?  Who gets to make the decision how much Nick Saban is worth to a college team?  Who gets to decide how much Jeff Bezos is worth?  

                I'll venture to say that some of the CEO's who are considered by business to be the "most valuable" in terms of adding value to their companies are people you've never heard of.  See here or here. That's why the people who pay them make the decision as to what they are worth..  

                Government has no business doing that.  

                •  Too many diverse responses to your bad assumptions (4+ / 0-)
                  Recommended by:
                  NoMoreLies, PJEvans, samanthab, blue in NC
                  Who gets to make the decision as to how much Peyton Manning is worth to the Denver Broncos?  Who gets to make the decision as to how much Robert Downey Jr. is worth to a movie?  Who gets to make the decision how much Nick Saban is worth to a college team?  Who gets to decide how much Jeff Bezos is worth?
                  Again, the null hypothesis is that multiple people have relatively equal ability.  Only one of them gets to demonstrate that.  You cherry pick the best demonstrations as proof that the system is working optimally.  I reject that cherry picking.

                  -7.75 -4.67

                  "Freedom's just another word for nothing left to lose."

                  There are no Christians in foxholes.

                  by Odysseus on Tue Dec 31, 2013 at 08:44:13 AM PST

                  [ Parent ]

                  •  Who gets to decide whether... (4+ / 0-)
                    Recommended by:
                    coffeetalk, Odysseus, nextstep, VClib

                    ..."the null hypothesis" or coffeetalk is correct?

                    Company owners (shareholders) do. Maybe you're right. Maybe not. The people whose money are invested get to decide what theory they will operate under.

                    (-5.50,-6.67): Left Libertarian
                    Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

                    by Sparhawk on Tue Dec 31, 2013 at 09:46:10 AM PST

                    [ Parent ]

                •  A second try a different way. (4+ / 0-)

                  Every testable hypothesis has four results.  A true positive, a false positive, a false negative, and a true negative.

                  Jobs is a true positive - the claim that exellent CEOs should be paid well is perfectly acceptable in his instance.  I would also argue that Elon Musk is in this category.

                  You say nothing at all about the false positives.  Ken Lay at Enron, Bob Nardelli at Home Depot, and the aforementioned clown car at HP.  All paid hugely for underperforming or flat out fraud.  Many of the people who respond to this diary are laser focused on the false positives.  You need to address that to be convincing.

                  You deny the existence of false negatives.  To stick with the sports metaphors - Tom Brady was a 6th round pick.  Every single NFL team passed on a Hall of Fame player five times.  Are NFL scouts truly this incompetent?  Kurt Warner was undrafted and did not play at any level for years.  Again, are NFL scouts truly this incompetent?

                  How many potential Jobses never get the chances they should have?  I can name a dozen people who work harder, work smarter, or are simply better than I am and are paid less.

                  -7.75 -4.67

                  "Freedom's just another word for nothing left to lose."

                  There are no Christians in foxholes.

                  by Odysseus on Tue Dec 31, 2013 at 09:04:00 AM PST

                  [ Parent ]

                  •  You misunderstand what I am saying. (4+ / 0-)
                    Recommended by:
                    Sparhawk, nextstep, VClib, Pi Li

                    I agree that there are clearly some CEO's who turn out to be not "worth" what that are compensated.  Just like some football players, movie stars, doctors, lawyers, and every other profession.  

                    My point is, who does the evaluation of what a person is "worth"?  Ultimately, who gets to say what Tom Brady, or Kurt Warner, or a CEO is "worth"?  In my view, it's the people paying that person. If a CEO turns out not to be worth what that CEO is paid, then the people who suffer are the shareholders, because the company makes less profits.  That's the CEO's job - to add value to the company.  If the CEO does not do his/her job -- if he/she does not add value to the company commensurate with his/her pay -- the shareholders suffer.  That's why the shareholders are the ones who should know what CEO's are paid.  If I don't like the policy with respect to the pay of a CEO, I shouldn't invest in that company.  

                    Personally, I prefer a situation where the CEO compensation is tied at least in part to the performance of the company -- akin to merit bonuses.  But I don't get to make that decision unless it's my money at risk.  If a company thinks that Joe Smith is really, really, really going to help make this company profitable, the Board of Directors (on behalf of the shareholders) are entitled to negotiate with Joe Smith to see if they are willing to compensate him on terms he is willing to accept to come to work there.  That's how the system evaluates what he is "worth."  That's how it works with athletes, entertainers -- and CEO's.  

                    So, let me ask you a question. Who gets to evaluate what the CEO of a company is worth?  

                    •  The instance is swamped by the class. (1+ / 0-)
                      Recommended by:
                      PJEvans
                      My point is, who does the evaluation of what a person is "worth"?  Ultimately, who gets to say what Tom Brady, or Kurt Warner, or a CEO is "worth"?  In my view, it's the people paying that person.
                      In 2008-2009, I spent 9 months unemployed.
                      Sixteen months into my next job, I was named Employee of the Month.

                      What am I "worth"?  Who decides?

                      -7.75 -4.67

                      "Freedom's just another word for nothing left to lose."

                      There are no Christians in foxholes.

                      by Odysseus on Tue Dec 31, 2013 at 11:01:02 AM PST

                      [ Parent ]

                      •  In the economic sense, you are worth (3+ / 0-)
                        Recommended by:
                        Odysseus, VClib, Pi Li

                        what you can get someone to pay you.  So, what you are "worth" is a joint decision between you (what you will accept) and the person paying you (what they are willing to pay you).

                        I am using "worth" as an economic term, not a value judgment.  As a value matter, I think being an extremely tall man with a huge talent for throwing an orange ball through a hoop is pretty worthless.  But in our economic system, people aren't compensated based on a subjective notion of "value" in some kind of moral sense.  People are paid based on value in an economic sense.  And it's pretty easy, in most instances, to derive a fairly accurate range of value in an economic sense - what a willing buyer will pay a willing seller in an arm's length transaction. So, while I would "value" that really tall guy who can throw a ball through a hoop pretty low, I recognize that his economic value is very high if a lot of people are willing to pay money to see him throw the ball through the hoop.  

                      •  Anything, including people's work is worth (1+ / 0-)
                        Recommended by:
                        VClib

                        what someone is truly willing and able to pay.  Note this is not the worth of the person as a human being, just the worth of their work.

                        The person may not currently be working for the entity that is willing to pay the most.  

                        In addition, a person themselves sets a price for their work, below which they decide not to work - so the person themselves may be the high bidder for their own work.  This is what people do when they voluntarily decide to retire early.

                        The most important way to protect the environment is not to have more than one child.

                        by nextstep on Tue Dec 31, 2013 at 11:25:48 AM PST

                        [ Parent ]

                      •  Odysseus - you are worth what someone is (2+ / 0-)
                        Recommended by:
                        Pi Li, nextstep

                        willing to pay you. We all trade our labor for compensation. How much you are compensated is decided by a negotiation between you and the person who would like to hire you. When the employer is willing to pay an amount that you are willing to accept, a market clearing price has been established. That's your worth for moment. Lot's of things could change that in the future.

                        "let's talk about that"

                        by VClib on Tue Dec 31, 2013 at 02:25:39 PM PST

                        [ Parent ]

            •  What, like he wasn't completely dependent on (2+ / 0-)
              Recommended by:
              blue in NC, PJEvans

              his developers and designers? How the fuck would he have amounted to jack shit without the folks in the development trenches?

              And do you think those Apple store workers aren't given high expectations?

              •  um, no. (2+ / 0-)
                Recommended by:
                VClib, Pi Li

                Take a look at what happened to Apple while Jobs WASN'T there, and compare that to what happened with Apple after he came back in 1996.  

                That gives you some idea of what he was "worth" to that company.  

                •  how about (0+ / 0-)

                  the guy running Apple when Jobs wasn't there wasn't as good at the job?
                  How is Apple doing now, after two years without Jobs?

                  A special case doesn't translate to a general rule.

                  (Is it time for the pitchforks and torches yet?)

                  by PJEvans on Tue Dec 31, 2013 at 11:04:23 AM PST

                  [ Parent ]

                  •  My point is who gets to make that decision (2+ / 0-)
                    Recommended by:
                    VClib, Pi Li

                    as to what a CEO is "worth"?  

                    So, let me ask, who gets to say what people like Jeff Bezos, Ralph Lauren, Richard Kinder, Irene Rosenfeld, Dan Duncan, Larry Ellison, Larry Page, Richard Tillerson, Michael Dell, Gregory Wasson, Meg Whitman, or John Mackey are worth?  

                    You can I can guess, but we don't know.  The people who should make that decision are the people who are PAYING them -- the shareholders.  They are the ones who bear the risk of a bad decision, so they are the ones who get to make that decision.  

                •  Uh, no again. That doesn't follow. Because Apple (1+ / 0-)
                  Recommended by:
                  jbsoul

                  wasn't as effective without Jobs does NOT mean that Jobs wasn't dependent on others' work- I'll take logical fallacies for $100, Alex. Jobs was effective at capitalizing on the work of other people. No shit, Sherlock. How does that mean that he wasn't capitalizing on his employees' work?

                   You have been too lazy to respond to my point, which is that Jobs could not have done it alone.

                  •  You are changing the point I was making. (2+ / 0-)
                    Recommended by:
                    VClib, Pi Li

                    Nobody says a single CEO "does it alone." I never said that.  I did say that come people clearly are more valuable to a company than others. (and part of the value of a CEO is in bringing other really good people to that company.  That's part of the job of the CEO -- to recruit, and manage, the best people possible.)  But here's my point:  

                    Clearly a good CEO is worth many multiples more than an entry level worker because that CEO has that many more times effect on adding value to the company overall than that low level worker.  Nobody disputes that.  The only question is how much more.  And for that, my point is this:  who gets to decide how much more.  

                    As to Jobs, there's no question whatsoever that he was HUGELY more valuable to Apple than anyone else who worked there.  How much more?  I don't know.  But that's not up to you, it' s not up to me, and it's certainly not up to the government. That's up to the people who paid him, who got the benefit of the upside and took the risk of the downside -- the shareholders.  

              •  Part of his value, is recruiting great people (0+ / 0-)

                and building a great team.

                That is something that few people can do.

                The most important way to protect the environment is not to have more than one child.

                by nextstep on Tue Dec 31, 2013 at 11:29:00 AM PST

                [ Parent ]

            •  Coffeetalk, there are two different questions (3+ / 0-)
              Recommended by:
              PJEvans, blue in NC, jbsoul

              to be answered:

              1 - How much value doe the CEO contribute to the shareholders?

              2 - How much value does the CEO contribute to the economy?

              Steve Jobs was exceptional because he had technical talent, and had exceptional vision. Let's talk about the typical CEO instead. To be successful, that person only needs to have a knack for extracting wealth from the consumer and conveying it to the shareholder. A good CEO can do this without creating a single dollar's worth of wealth for the economy.

              Mind you, I agree that the CEO's salary plays a minuscule role in the serious problem of wealth and income inequality in this country. I also agree that artificial limits on CEO salaries would be fruitless. Those salaries are only a tiny part of the problem.

              The CEO is primarily a conduit for conveying consumer dollars to the owners. if s/he can shave $.10 an hour off the wages of a million workers, that's an extra $200 million every year for the owners. Maybe this involves busting a union or lobbying against hiking the minimum wage or shipping jobs overseas. In any case, it's the worker at the bottom who produces the wealth; the CEO (generally) produces nothing.

              The problem for government is to make sure that everybody gets a reasonable share of the pie. We're not doing a good job of that.

              Republicans proved in October that they are UNFIT TO GOVERN. Don't let the voter forget it. (-7.25, -6.21)

              by Tim DeLaney on Tue Dec 31, 2013 at 09:50:05 AM PST

              [ Parent ]

              •  Those are the wrong questions. (3+ / 0-)
                Recommended by:
                nextstep, VClib, Pi Li
                1 - How much value doe the CEO contribute to the shareholders?
                What's more important is this question:  who gets to decide how much value the CEO contributes to the shareholders?  I say the shareholders do.  It's their money.  
                2 - How much value does the CEO contribute to the economy?
                What relevance does that even have to CEO compensation?  Nobody is compensated based on what they contribute in terms of "value" to the "economy"?  Again, who gets to decide how much "value" Jeff Bezos contributes to the economy, and how does that person's decision in any way, shape, or form have any bearing on how much money Bezos makes?  His money is tied to how much value he makes for Amazon, not what "value" he brings to the economy as a whole. Same with every CEO out there.  We have a non-lawyer at our law firm firm who functions as a CEO in running the business.  He is paid based on what value he brings to us, the owners of the business, not based on some amorphous notion of what "value" he contributes to the economy as a whole.  

                And the idea that a CEO generally "produces nothing" is ludicrous.  It's based on a notion that there's no value in knowledge.  That's something that is clearly wrong -- our economy clearly DOES value knowledge and abilities even other than "producing something" in terms on a tangible product.  Lots and lots and lots of people are paid based on what they know and how they apply that knowledge.  Frankly, we are living in a world where -- due in no small part to technology advances -- labor is becoming less valuable economically and knowledge is becoming even more valuable.  I think it's an upheaval akin to the industrial revolution, and we need to plan for how we, as a country, are going to adjust.  

                I completely agree that there's an issue with people at the bottom of the economic ladder who need to be able to move up financially.  But CEO pay has virtually nothing to do with that. Capping CEO salaries does nothing to increase the pay of people at the bottom of the economic ladder.

                •  If you know as much (2+ / 0-)
                  Recommended by:
                  blue in NC, jbsoul

                  about business as you claim, then you already know that executive salaries are decided by the board of directors ... most of whom are also overpaid CEOs and CFOs.

                  (Is it time for the pitchforks and torches yet?)

                  by PJEvans on Tue Dec 31, 2013 at 11:05:40 AM PST

                  [ Parent ]

                  •  That's why Warren's transparency argument (2+ / 0-)
                    Recommended by:
                    VClib, Pi Li

                    makes sense. And shareholders in a publicly traded company always have ULTIMATE say, because they can sell their shares.  If enough shareholders are upset by what the Board pays a CEO, they sell, the stock goes down.

                    And of course, the Board has a fiduciary duty to shareholders, and if they disregard the best interests of the shareholders, well, that's what shareholders derivative suits suits are for.

                    Again, transparency makes sense. Capping CEO salaries does not.

                  •  Exactly. US Boards of Directors are one single (1+ / 0-)
                    Recommended by:
                    jbsoul

                    corrupt circle-jerk of CEO's who sit on each other's boards and feather each other's nests at the expense of the well-being of the nation.

                    "Bernie Madoff's mistake was stealing from the rich. If he'd stolen from the poor he'd have a cabinet position." -OPOL

                    by blue in NC on Tue Dec 31, 2013 at 11:59:20 AM PST

                    [ Parent ]

                    •  And if they do a bad job, the shareholders (2+ / 0-)
                      Recommended by:
                      VClib, Pi Li

                      are the ones who pay the price.

                      That's the whole point behind shareholder derivative suits.  The Board of Directors of Starbucks owes a fiduciary duty to Starbucks shareholders.  

                      If we don't own shares of Starbucks, the Board of Directors of Starbucks don't owe the rest of us anything.  

                    •  blue in NC - that was the case (1+ / 0-)
                      Recommended by:
                      Pi Li

                      but both the SEC and the exchanges have really cleaned up the idea that you serve on my board and determine my compensation and I will serve on yours and decide on your compensation. That is no longer legal. To serve on the compensation committee of a public company you can't have any method of transferring economic value between you, or your family, and the company or vice versa. Compensation committee members must be independent of any conflicts that would allow any quid pro quo for themselves, or family members.

                      I have served on public company boards since 1988 and compensation issues were filled with conflicts. The changes have been necessary and dramatic.

                      "let's talk about that"

                      by VClib on Tue Dec 31, 2013 at 02:34:31 PM PST

                      [ Parent ]

                •  Maybe I should have been more clear (2+ / 0-)
                  Recommended by:
                  coffeetalk, jbsoul
                  1 - How much value doe the CEO contribute to the shareholders?
                  What's more important is this question:  who gets to decide how much value the CEO contributes to the shareholders?  I say the shareholders do.  It's their money.
                  I don't disagree. I was trying to point out that the CEO produces value for the shareholders, but not necessarily for the economy as a whole.

                  You and I agree that the CEO should do just that. That's the job of the CEO. S/he has no obligation to the economy as a whole. S/he has no incentive or obligation to the economy, to the consumer, or to the workers, except as it might benefit the owners. The CEO works solely for the shareholders. I get that.

                  You also seem to have missed the fact that I agree with you that it serves no purpose to artificially limit the compensation of the CEO.

                  And the idea that a CEO generally "produces nothing" is ludicrous.  It's based on a notion that there's no value in knowledge.
                  Maybe I was unclear; let me try to clarify. The sole job of the CEO is to maximize the return for the owners. In general, the owners are interested only in the bottom line. The only relevant knowledge that the CEO possesses is the ability to do just that. Producing wealth--actual goods and services--is not the job of the CEO.

                  At the end of my comment, I said:

                  The problem for government is to make sure that everybody gets a reasonable share of the pie. We're not doing a good job of that.
                  This is my bottom line. The owners are getting too big a slice of the economic pie, and government is not doing a good job of ensuring that the worker gets a reasonable share of what that worker produces.

                  Republicans proved in October that they are UNFIT TO GOVERN. Don't let the voter forget it. (-7.25, -6.21)

                  by Tim DeLaney on Tue Dec 31, 2013 at 12:00:41 PM PST

                  [ Parent ]

          •  If what you say is true, why don't groups of (2+ / 0-)
            Recommended by:
            coffeetalk, VClib

            unemployed people frequently get together and start a business, as capital and management contribute nothing and therefore are not needed?

            The most important way to protect the environment is not to have more than one child.

            by nextstep on Tue Dec 31, 2013 at 11:39:52 AM PST

            [ Parent ]

        •  Right. Stealing is hard work. So I suppose that (0+ / 0-)

          isn't "nothing".

          "Bernie Madoff's mistake was stealing from the rich. If he'd stolen from the poor he'd have a cabinet position." -OPOL

          by blue in NC on Tue Dec 31, 2013 at 11:56:08 AM PST

          [ Parent ]

      •  happy camper - there is nothing stopping any (2+ / 0-)
        Recommended by:
        coffeetalk, Pi Li

        dozen people from opening their own burger joint, paying a living wage, providing good benefits, and full time hours. Plus they can keep all the profits. That's what's great about America.

        "let's talk about that"

        by VClib on Tue Dec 31, 2013 at 08:31:23 AM PST

        [ Parent ]

  •  On making the moral case against this (7+ / 0-)

    unwarranted and unjustifiable level of income inequality, I have a contrary opinion.  It's not easy to make an effective argument using morality. Often, it doesn't work .

    Morality doesn't matter to people who are as immoral as the rightwing grifters we have today.  To them, morality is a weapon they've learned to use against liberals by preaching about spending amounts that exceed revenue and accumulating debt for future generations to inherit as if they had a record to stand on regarding these matters. They end up mocking morality and liberal progressives.

    A hundred years ago when Theodore Roosevelt was campaigning for progressive public policy, he mentioned morality often. He also explained how it can cut both ways. Progressives can point out the immorality of a society that values only profits so that greed becomes good. Rightwingers counter with the immorality of laziness and personal failure, which they say leads to envy when the deficient and inferior compare themselves to their betters. He was careful to craft arguments that appealed to the high ideals and principles of the founders of this republic which is a system of government based on an assumed level of equality among its citizens.  Rightwing propagandists have washed that history away.

    Morality is subjective and even though rightwingers usually disregard facts, figures, metrics, they know they can score points by demanding a measure for it.  You can see that in this comment thread. Which exact multiple marks the threshold where inequality becomes excessive?  Who gets to decide what's fair? These are intentional  conversation stoppers.

    If you want to use morality to further the progressive agenda, you have to use shame. It's in your title and it's the basis of rightwing strategy too.  You have to make the case for responsibilities that go along with riches.  You have to insist on respect for preservation of a system that extends an unobstructed path for all to improve their circumstances if that's what they want.  Even a hundred years ago it was considered immoral to benefit from the labor of others without paying them adequately, defined as an amount that covers immediate needs of food, shelter, clothing, education, health care, and a retirement.  And in those days, it was customary to have one individual earning a living for a whole family. Pay that leaves workers in poverty is immoral.

    There is no existence without doubt.

    by Mark Lippman on Tue Dec 31, 2013 at 02:43:20 AM PST

    •  I agree completely, in principle, but just as (1+ / 0-)
      Recommended by:
      Odysseus

      you say morality doesn't matter to the current rightwing grifters, so too are they incapable of shame. So what, if anything, is the practical method to accomplish this "shaming"?

      When four hundred individual Americans possess more net wealth than the bottom 160 million Americans combined, I'm afraid that we have already gone over the precipice and cannot stop the plunge.

      "Bernie Madoff's mistake was stealing from the rich. If he'd stolen from the poor he'd have a cabinet position." -OPOL

      by blue in NC on Tue Dec 31, 2013 at 06:23:17 AM PST

      [ Parent ]

  •  I'm fine with Warren's position because (5+ / 0-)
    Recommended by:
    TooFolkGR, Kickemout, Sparhawk, VClib, Pi Li

    I don't think the federal government has any business telling a privately owned company how to spend its money.  

    It's not "our" money they are paying these executives.  It's money that belongs to the owners of that company -- the shareholders.  And the shareholders' interests are supposed to be represented by the Board of Directors.  

    And what do you think is going to happen if you put limits on pay?  Do you think these companies will suddenly start paying low-level workers more?  Of course not.  The extra money, to the extent there is any, will go to the owners of the companies.  

    Now, I'm fine with people knowing what a company does -- including what it pays its CEO -- before investing (i.e., Warren's position). If you don't like what a company pays its CEO, don't invest in it.  

    All this focus on what the top .001% make is really just spinning wheels.  It makes no difference to the rest of us, except make us feel better maybe.  Limiting CEO pay will do nothing -- nada -- to help the workers.  That extra money is often not enough to make a difference if you spread it around all the workers of the company and -- more importantly -- it's not going to go to them.  It just increases profits for the owners.    

    The focus needs to be on (1) creating more better paying jobs; and (2) giving people the opportunities to get the skills necessary to move into those better paying jobs.  We need to focus on giving people at the bottom end of the economic spectrum the opportunity to move up -- that's the way to lessen income inequality.  Limiting the pay of .001% of the people in this country won't make any difference in the lives of the other 99.999%.  

    •  That ignores the (7+ / 0-)

      negative economic effects of having millions of consumers earning poverty wages, as well as the morality of a situation where a person is compelled (yes, compelled if they want to eat) to trade their labor for a pittance. Yes, it's great to generate high paying jobs and to educate people to do them. But we will have low skill jobs for the foreseeable future that must be filled, and to say those workers, who produce massive value for the shareholders as well as the denizens of the executive suites, don't deserve a reasonable share, or to assert that the money will go to the shareholders if not to the CEO, is simply wrong (ever heard of collective bargaining?), and it ignores the fact that the economy did much better when wage inequality was not so great.

      When corporate profits and poverty are both at record highs, something is wrong with the way the system allocates the wealth.

      "A lie is not the other side of a story; it's just a lie."

      by happy camper on Tue Dec 31, 2013 at 06:44:25 AM PST

      [ Parent ]

      •  Limiting CEO pay does nothing -- nada - to solve (2+ / 0-)
        Recommended by:
        VClib, Pi Li

        that problem.  

        Steve Jobs earned $1 a year in CEO pay.  His "salary" or lack thereof had no effect whatsoever on what Apple paid an entry level person in an Apple store.  

        What helps that problem is (1) more and better paying jobs and (2) giving people the opportunity to gain the skills necessary to move into those more and better paying jobs.    

        •  Addressing CEO compensation (2+ / 0-)
          Recommended by:
          blue in NC, jbsoul

          One, the concept of "salary" is fungible, I completely agree.

          Steeply progressive taxes that cover all income can address such disparity after the fact. They are probably easier to enforce than a fixed ratio, although tax policy does require international cooperation.

          Just as important, however, is the question of the design of corporations themselves. The design that we now have--hierarchical structure and external stock ownership--lends itself to such disparity. That need not be the dominant design. I much prefer designs like those of the John Lewis Partnership, but that is just one of many other possible alternatives.

  •  I Don't Think It Needs to Be Either (0+ / 0-)

    I don't care if someone's making a billion times what the average worker makes, as long as the average worker is making a living wage.

    •  It would appear (6+ / 0-)

      that the rise in CEO and upper management pay has tracked the stagnation of worker compensation rather closely. Inequality and high rates of poverty go hand in hand.

      "A lie is not the other side of a story; it's just a lie."

      by happy camper on Tue Dec 31, 2013 at 06:52:51 AM PST

      [ Parent ]

      •  And Reading Ability "Appears" to Track Shoe Size (3+ / 0-)
        Recommended by:
        Sparhawk, VClib, coffeetalk

        If you eliminated the CEO of every Fortune 500 company, and equallly divided their salaries among the non-CEO employees of that company, you'd be able to give each of them ALMOST $200 more a year.

        I agree that the system structure that's in place and the accompanying "values" (a term that must be used loosely) of that system are probably the cause of both high CEO pay AND wage stagnation for the working class... but fixing a symptom doesn't fix the problem.  

        If we wake up one morning and find ourselves with the political capital to cap CEO pay, we'd be fools not to spend that capital on something that would actually have the potential to benefit hardworking people instead.  

        Favoring red meat over math is what the other team does.

        •  I'm not suggesting (1+ / 0-)
          Recommended by:
          TooFolkGR

          fixing the symptom will be the cure. Your original comment seemed to suggest that inequality was unconnected to our other problems. I think we actually agree...

          "A lie is not the other side of a story; it's just a lie."

          by happy camper on Tue Dec 31, 2013 at 07:28:20 AM PST

          [ Parent ]

          •  Obviously I Don't Agree (1+ / 0-)
            Recommended by:
            VClib

            That my other comment suggests that inequality was unconnected to other problems... my other comment was that as long as the working class is receiving just compensation (which they currently aren't) I don't care what the "CEO Multiplier" is.

            But I appreciate the clarification.

        •  This by TooFolkGR is right on point (2+ / 0-)
          Recommended by:
          VClib, Pi Li
          we'd be fools not to spend that capital on something that would actually have the potential to benefit hardworking people instead.  

          Favoring red meat over math is what the other team does.

          Seems like people here are focused on something that makes them feel good even if it doesn't do ANYTHING for the people they want to help.  

          The focus needs to be on (1) more good paying jobs; and (2) giving people the opportunity to get the skills to move into good paying jobs -- i.e., things that will actually help working people move into a better financial situation.  

  •  didn't take long (3+ / 0-)
    Recommended by:
    happy camper, jbsoul, blue in NC

    For the defenders of the oligarchy to show up and troll this excellent diary.

    “Vote for the party closest to you, but work for the movement you love.” ~ Thom Hartmann 6/12/13

    by ozsea1 on Tue Dec 31, 2013 at 06:29:03 AM PST

  •  Excellent diary. One of the best I've read (6+ / 0-)

    in a long time.

  •  these companies do a HUGE disservice to themselves (8+ / 0-)

    and shareholders.

    There's no way any one human being is 1,000 times better than another at anything

    (well, OK. M. Jordan is probably 1k x's better at walking than S. Hawking but, srsly, that's a bit of an outlier)

    and I guaran-fucking-tee more than a few of those at the bottom of the economic scrotum pole are way-the-hell savvier about life than many in the top executive ranks.

    elipsii: helping the masses express aposiopesis for...

    by bnasley on Tue Dec 31, 2013 at 07:19:18 AM PST

    •  Then they will fail, won't they? (3+ / 0-)
      Recommended by:
      VClib, nextstep, Pi Li

      that's the point.  If they make decisions that make them LESS successful, they fail, and they shareholders lose their investments.  

      If it is a "huge disservice" to Starbucks and its shareholders to pay the CEO what they do, then Starbucks will fail and the shareholders will lose their investments.  

      And I will give you a hint:  a CEO's value to the company is not based on whether he is "savvy about life."  

      CEO compensation is based on what the owners of the company think the CEO is worth to the company.  That's why Warren's position makes sense -- the shareholders should know how much of their money is being invested in a CEO as opposed to other investments.  They are the ones  who get to make that decision.  

      •  Your stop energy is pointless (2+ / 0-)
        Recommended by:
        bnasley, jbsoul

        I see the game is answering trolls rather than ignoring them.

        You can't stop this movement. You can't even slow it down. Maybe you are trying to accelerate it? It's working.

        Free Software, Free Society - fsf.org : Debian, not a company - debian.org

        by eyo on Tue Dec 31, 2013 at 08:25:17 AM PST

        [ Parent ]

        •  eyo - is the movement (2+ / 0-)
          Recommended by:
          Tim DeLaney, Pi Li

          increasing pay for people at the bottom of the corporate ladder or reducing pay for the people at the top? I think government in the US has more tools to do the former than the latter. In my view the way to deal with excessive executive compensation is higher marginal tax rates that impact all high income earners. It's much less complex, clearly within the historic power of the federal government, and fairer.

          "let's talk about that"

          by VClib on Tue Dec 31, 2013 at 08:47:08 AM PST

          [ Parent ]

          •  Personalizing the issue (5+ / 0-)
            Recommended by:
            VClib, bnasley, NoMoreLies, jbsoul, blue in NC
            You can't stop this movement.
            Apologies. I should not have posted that. "This movement" could mean anything.

            coffeetalk is so repetitive all through the comments "It won't work". and that is really trolling. I fell for it and responded. I thought by pointing to the disruptive behavior, it might inspire others to stop polluting the comments with responses.

            To answer

            increasing pay for people at the bottom of the corporate ladder or reducing pay for the people at the top?
            Both, in my opinion. I would cap excessive pay and increase minimum wages at the same time. There is enough money in our economy to balance the last few decades of inequality. I'm talking about radical change in hopes that some progress will actually happen. Like, let's start here.

            Free Software, Free Society - fsf.org : Debian, not a company - debian.org

            by eyo on Tue Dec 31, 2013 at 09:03:59 AM PST

            [ Parent ]

          •  I agree (2+ / 0-)
            Recommended by:
            blue in NC, jbsoul

            Implementing the tax code we had in the 1950s would be a large disincentive to excessive compensation at the top and incentiveize reinvestment in company innovation, infrastructure and workers below the level of top management.  And tax all income above a certain level the same regardless of the source so the greed heads can't game the system.  The current tax code at nearly all levels favors the upward redistribution of wealth and income. And that is at both federal and at state and local levels.

            •  NML - we need to understand that the code for (3+ / 0-)
              Recommended by:
              coffeetalk, nextstep, Pi Li

              individuals, not just the tax rates, was completely re-written in the Tax Reform Act of 1986. While we had higher published marginal rates we also had legal, economically sound, tax shelters, that allowed anyone to drop their effective federal rate as low as they desired through their investing activities. So when you say the 1950s code do you really mean the code or the rates? Most high income earners would be happy with the old rates if they also had the old code. Most of the people who write here at DKOS want the old rates, but the post TRA86 code which eliminated nearly all the tax shelters. Rates before 1986 and those after have no relationship to one another. They are apples and oranges because of the transformational changes in the IRS code for individuals that was the result of TRA86.

              "let's talk about that"

              by VClib on Tue Dec 31, 2013 at 10:42:25 AM PST

              [ Parent ]

              •  I am ok with some of these tax shelters (3+ / 0-)
                Recommended by:
                VClib, blue in NC, jbsoul

                if they are structured in such a way as to i ncentivize investment in productive portions of the economy that put large swaths of people to work for a living wage, promote research and develop sustainable infrastructure. That being said according to Wealth for the Common Good even with a lot of the tax shelters you discuss the ultra rich paid an effective tax rate north of 50 percent during the Eisenhower administration. Read their paper Shifting Responsibility  available at the Economic Policy institute website;  it is an excellent discussion of how effective tax rates on the very wealthy have dropped by over 60 percent in the last 60 years along with very reasonable tax reform to reverse that situation and eliminate much of the budget deficit.

                •  NLL - I will read the report (1+ / 0-)
                  Recommended by:
                  Pi Li

                  I have never seen any definitive data that showed an effective rate north of 50%, regardless of how high the top marginal rate was at the time. Unfortunately I don't think the IRS or CBO has ever published effective rates for those historical periods. It will be interesting to see what data the Institute has collected to estimate the effective rate. I am always leery of reports like this from the right or the left because they want to bias the answers to fit their own political agenda, but I will read it with an open mind. The working assumption I have most often read was that the top 1% paid an effective rate of about half the top marginal rate at the time.

                  "let's talk about that"

                  by VClib on Tue Dec 31, 2013 at 11:52:16 AM PST

                  [ Parent ]

                  •  The paper mentioned that (2+ / 0-)
                    Recommended by:
                    VClib, jbsoul

                    the 400 richest Americans paid effective rates between 50 and 55 percent during Eisenhower administration.  I think the top 1% paid less as a group with effective rates somewhere around 35 to 42 percent range which fits with your assumption.  Interestingly also discussed is the fact that the 400 richest effective rates fell below 17 percent by 2007 showing a tax burden that fell by over two thirds while over the same period taxes on the bottom 80 percent of Americans actually increased.

      •  i'm fine w/what Warren is proposing (2+ / 0-)
        Recommended by:
        samanthab, jbsoul

        but its worth pointing out its CEO's, execs and company officers who've been fighting full disclosure since at least the early '90's (probably longer, but that's when i started paying attention).

        and you don't think its important for a CEO to know how to stretch a buck or be savvy?  Somebody making 8 bucks an hour is a helluvalot smarter about money and trimming fat than someone making 6-8 figures who can just throw money at a problem.

        All those millions Carly Fiorina got for her outstanding job wouldn't have been better for the company ploughed back into R&D?  And what the Big 3 automakers' execs were paid was totally worth it because of the way they totally dominated the Japanese and kept them out of US markets from the '80's until now.  If errors were made, they were totally the fault of the guys on the line who weren't remotely worth their 15-50$/hr.  And can't forget Hostess!!  Its not the people at the top's fault they couldn't recover from the stupidity of the fools on the filling injection machine.  

        And thank god Enron paid Jeffrey Skilling so well.  All those employees would totally have been out of a job if Jeff had only been making low 6 figures.

        Even at ~95wpm, the off-the-cuff examples of CEO/upper management value adding uber-brilliance come faster than I can type (roughly 1000 x's faster, actually).

        And before you say "we're talking about CEO pay, what's upper management got to do with it?"  CEO compensation packages set the bar.  Not just for compensation but "work ethic" as well; whether the next 5 or 6 levels down are more concerned with perks than markets.  Or quarterly profit statements vs. frivolous crap like, say, laws.

        As far as i can tell, the only thing all those banking and investment CEO's were better at was breaking the law, rigging the game and conning the rest of us into subsidizing their industry. Sure, in the banking and investment worlds, CEO's definitely did right by their respective companies.  Maybe not so much the society those companies need to exist, but, pffft, who cares, right?  I'm sure if Ken Lewis had gotten a few million more, B of A wouldn't have foreclosed on all those homes.

        Lawd knows how those Swiss, German and Japanese companies can survive when their CEO's are nigh-unto-destitute at 20:1, 12:1 and 11:1respectively.  Those guys must be on freakin' food stamps and take out payday loans to survive...

        elipsii: helping the masses express aposiopesis for...

        by bnasley on Tue Dec 31, 2013 at 09:48:44 AM PST

        [ Parent ]

  •  There has got to be a better system (5+ / 0-)
    Recommended by:
    Odysseus, eyo, blue in NC, NoMoreLies, jbsoul

    I think capitalism needs some refining, maybe a crucible.  Those CEO salaries listed are ridiculous and indicative of crony capitalism and boards populated with other CEO members.

    I like the idea of executive pay limited to some multiple of the lowest paid employee.  The argument that the CEO or other highly compensated persons would be paid with other forms of compensation could be mitigated by requiring that any such plan apply to employees at their fractional rate.

    Also the executive compensation multiple could be tied to board and employee approval.  For example if the base ratio was 20:1 a board or employee recommendation might move it to 30:1 if both approve 40:1.

    What do you think?

    •  6:1 (0+ / 0-)

      Should be the starting point. That's what I think. Then, maybe if the company becomes stinking rich, 10:1 max.

      Free Software, Free Society - fsf.org : Debian, not a company - debian.org

      by eyo on Tue Dec 31, 2013 at 08:42:46 AM PST

      [ Parent ]

    •  UnBlinkingEye - those numbers are NOT salaries (2+ / 0-)

      One of the very unfortunate results of how executive compensation is shown in proxy statements is that few people actually understand them. The numbers are for total compensation, of which the actual salary is about 10-20%. Most of the compensation is in the form of stock options and an estimated value is included in the compensation table. The only thing we know about the estimate of the value of the stock options is that the number is wrong. It might be higher or it might be zero if the stock declines below the price at which the options were issued.

      So one part of a discussion of executive compensation, which I agree is outrageous in many cases, is actually understanding the numbers published in the proxy reports. I would like the SEC to require two schedules, the one now published which ties to the financial statements under GAAP, and a second one that is on a cash basis, including any actual profits from stock options. That would give investors and the public a much clearer view of how much the senior executives are actually costing the company in terms of cash payments. The current schedule is more confusing than helpful and 95% of the reporting, not only on the Internet but in the MSM infers that the total compensation numbers represent cash payments. Nothing could be more wrong.

      "let's talk about that"

      by VClib on Tue Dec 31, 2013 at 08:55:12 AM PST

      [ Parent ]

      •  This is right on point; more should understand (2+ / 0-)
        Recommended by:
        VClib, Pi Li

        CEO compensation.  Part of the transparency needs to be in a way that is easier for shareholders to understand.  As more and more of us become shareholders of publicly traded companies through things like our 401(k) accounts, there's a good argument to be made for this kind of reform.

  •  The only time... (3+ / 0-)

    I would be okay with a big CEO payout is if it came with an appropriate amount of risk.

    Get the company profitable to a certain point, then you definitely deserve it.  But if you trash the company, you don't get any of it.

    Unfortunately, that doesn't happen in the real world.  CEO's get paid regardless.

  •  My ultimate boss is the POTUS (1+ / 0-)
    Recommended by:
    eyo

    He makes about 3 times as much as I do. I'll admit that I'm at a relatively high grade (it's a professional position requiring a license) but really my pay is nothing special, especially given where I live.

    As it happens I just today downloaded all of the federal pay scales for 2014. For those who are not aware of it, most federal employees are on the GS-scale; the GS-scale was once uniform throughout the country but has, since the mid-1990's, included locality pay for people who work in certain high-cost areas, of which there are currently 34.

    The President's salary is $400,000 a year, though of course the job includes such perks as a nice residence in downtown DC and free travel.

    By contrast, the very lowest salary on the GS scale, GS-1, Step 1 in an area not covered by locality pay, is $17,981. So, based simply on published salaries, the President, who is the highest-paid government official, makes approximately 22 times as much as the lowest paid civil servant. One thing that theoretical lowest-paid employee is entitled to that the President is not is, ironically, a performance award (federal civil service employee performance awards are pretty small compared to the private sector; typically they are capped at 1% of annual salary using the base pay scale).

    Somehow, and despite Congress' best efforts it seems, the federal government manages to provide a wide variety of services to its constituents. Not everyone is happy with all of the results of course, but in that respect the government is no different from any other business.

    •  Well, if you are going to count things like (3+ / 0-)
      Recommended by:
      nextstep, VClib, Pi Li

      stock options as CEO compensation because he/she can make a lot of money off those later, then you'd have to do something similar for the POTUS.  In other words, the POTUS may only make $400,000, but come January 21, 2017, he'll be able to leverage those 8 years into millions of dollars a year -- just ask Bill Clinton.  (He now can earn half a million dollars in a few hours.)   And the more people like him when he leaves office (i.e., the better job he does) the more millions he'll be able to make starting January 21, 2017.  So, when you talk about what those 8 years in office can garner the President over the next 20 years, you are talking high, high CEO levels.  

      •  I don't think that's an apt comparison (0+ / 0-)

        Many civil servants at the professional level, when they retire, end up becoming consultants of one sort or another, either starting their own businesses or going to work for other established firms.

        I work for HUD; not a few former HUD employees in my particular area retire and then go on to work for mortgage lenders, sometimes earning far more than they did when they were on the government payroll. I know of former employees of other agencies who've done comparable things once they retire from their government positions. I don't have a problem with that. (Note that I don't plan on doing such a thing myself; after 37 years I'm really tired of the real estate business and I truly think I've worked long enough that I am entitled to use my retirement in order to be retired.)

        But having other opportunities given to you based on your experience at your previous gig is not any sort of deferred compensation. Most people who change jobs within their field do so with the expectation that they'll be worth more to their new employer based on the experience and skills they've gained from working for their previous employer even if some of those skills and experiences weren't precisely in the job description.

    •  The government is very different from (0+ / 0-)

      every other business, particularly in the respect that the president's pay is set by law and (correct me if I'm wrong) can only be changed by an act of Congress--which of course brings in political pressures. One thing about all elected officials in Congress--the cost of achieving (winning) the office is far more than the total salary paid for the term--even those in "safe" districts are tasked with helping raise money for their party, so even they are not immune. Think about how much was raised and spent to re-elect Pres. Obama in 2012--of course, it did create a lot of jobs and all that, but still, it was a ton of money, enough to support a slew of executives in serious big style for 4 years.

      "All governments lie, but disaster lies in wait for countries whose officials smoke the same hashish they give out." --I.F. Stone

      by Alice in Florida on Wed Jan 01, 2014 at 08:24:42 AM PST

      [ Parent ]

  •  They said on TV (0+ / 0-)

    "Now it is time to help the middle class."  Now?  After many have lost their homes and their jobs and all chances of saving for a good retirement at different times?

    Do you think they will trust any of the government now?  

    I don't trust them and never will.  They are worthless and rich without morals.  

    It isn't just GOP either.

  •  Power imbalance (2+ / 0-)
    Recommended by:
    Dongflopper, Alice in Florida

    I'm less troubled by how much more money a CEO makes than the average worker in her/his company than I am by the power imbalances and distortion of our political system that result from increased concentration of wealth. I tend to agree with some other commenters here that measures to limit CEO pay are probably not achievable and wouldn't produce the social justice result we're looking for.

    The conundrum, however, is that it's this very concentration of wealth that makes it harder to institute policies to help those further down the ladder because wealth gives one power to influence the political system and skew policy towards the interests of the wealthy classes. In order to make for a fairer society economically, we're going to need to create and maintain a number of social supports to give people the help they need to make better lives. But that costs money, and there are some very wealthy and very powerful people (and institutions) that don't want to pay it.

    Procrastination: Hard work often pays off after time, but laziness always pays off now.

    by Linnaeus on Tue Dec 31, 2013 at 01:25:03 PM PST

  •  . (1+ / 0-)
    Recommended by:
    jbsoul

    as far as I am concerned the CEO's are being paid the outrageous salaries to kill off the middle class in Amerika as fast as they can.

    Progressive tax rates to 70% or more on the highest salaries was intended not just to fill govt coffers it also had a regulatory effect on compensation:  If the corporation doesn't want 70% of the pay to a CEO to go to govt coffers ... don't pay him so much... pretty simple.  And it forced the money that WOULD have been paid to the big shots to be invested in the company itself.

    However, they are all getting around all that anyways by making the 'earned income' of CEO's and the higher ups just walking around money when the real pay is in  stock options taxed at 15%.

    "History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling the money and its issuance." -James Madison

    by FreeTradeIsYourEpitaph on Tue Dec 31, 2013 at 04:29:06 PM PST

  •  Is glassdoor.com a reliable source (1+ / 0-)
    Recommended by:
    Susan G in MN

    for employee wage information?

    Gondwana has always been at war with Laurasia.

    by AaronInSanDiego on Wed Jan 01, 2014 at 03:11:19 AM PST

  •  Shameful (0+ / 0-)

    You know it's not as much the giant separation of wealth that bothers me. It's the claims of the right Christian values! That alone should disqualify them from the human race. Claim to be a Christian and then go against every teaching of Christ. Another reason I'm an Atheist!

  •  Unionization (1+ / 0-)
    Recommended by:
    thirty three and a third

    Whether you believe they are just another special interest group, and that your dues just pay out for large houses and yachts for the leaders just think about who you'd rather have representing you? The person who continues to vote to lower taxes on the rich and take from the poor, or the people that could stop 40% of all Americans from shopping in a non union facility. Let's face it, higher prices for unionized labor more than equals out for the return of a middle class and the representation we once had. The four Walton children have more combined wealth than the lower 42% of Americans. How is this acceptable in ant country that considers themselves civilized. It's black and white between the correlation of union membership and the decline of wages! If a company fires people for trying to unionize, that community needs to stand behind people trying to improve their station in life. There is always a Target for a shut down Wal Mart or a dollar store to get your cheap made in China fix!

  •  I don't think limiting what one can earn is a (0+ / 0-)

    good thing.  However I would tax that huge amount of income and use the money to first fund early childhood education and then increase the funding for all education levels.  

    So the guy that makes $6,000 per hour makes $2,496,000 in basic compensation.  Well I would tax the amount over $1,000,000 at 50% and the amount over $2,000,000 at 60%.  That would bring in about $1,000,000 and that would fund a lot of education.  

    So lets stop talking about too much pay for folks and instead tax them and use the money to help the poor get education!  

  •  A Simple Observation (0+ / 0-)

    It is difficult to envisage a circumstance where a human being can outmatch his/her fellows by a factor of a thousand in categories that justify such levels of compensation.

    Intelligence, diligence, industriousness, specialized knowledge or natural ability - those are categories where people can and do differ of course, but by a factor of ten to the third power? It is difficult to credit save in rare or extraordinary circumstances.

    When it comes to greed, corruption, self-delusion or just plain assholery, the proposition is far easier to credit, alas.

    "No special skill, no standard attitude, no technology, and no organization - no matter how valuable - can safely replace thought itself."

    by xaxnar on Wed Jan 01, 2014 at 03:15:39 PM PST

  •  The CEO system is corrupted, out of control (0+ / 0-)

    Elizabeth Warren needs to address this more directly than she has.  There is systemic corruption going on, and a general mentality on corporate boards that you solve problems with a rockstar CEO.

    That wasn't always the case.  Forty years ago, it simply wasn't tax efficient to play this compensation game with CEOs.  It now seems, at least on the surface, more tax efficient than paying workers a decent wage and training them properly.  Yet, even under the distorted mess our tax code has become, there is NO POSSIBLE WAY it can be efficient to guarantee severance to the point that the executive's success isn't doing their job, it's simply getting hired to it.  

    Perhaps ban, or heavily tax, executive severance?  In any case it raises big, big questions about corporate governance.  And that's an area the government definitely can claim a compelling interest in regulating.

Meteor Blades, chuck utzman, nota bene, norwood, Odysseus, teacherken, misscee, Geenius at Wrok, Gooserock, emal, RAST, TX Unmuzzled, RFK Lives, niemann, ask, roses, Alna Dem, wader, kharma, psnyder, Hawksana, Chirons apprentice, Catte Nappe, papercut, lcrp, Major Kong, zerelda, ybruti, Gowrie Gal, kbman, marina, NoMoreLies, Tonedevil, chimene, corvo, Simplify, YucatanMan, Laurence Lewis, Kevskos, blue jersey mom, LucyandByron, Savvy813, petestern, Rusty in PA, bunsk, bookwoman, xaxnar, MadGeorgiaDem, Hirodog, snazzzybird, tarheelblue, Patriot Daily News Clearinghouse, AoT, Lefty Coaster, blueoasis, NBBooks, triv33, MJ via Chicago, happy camper, doinaheckuvanutjob, blue in NC, onionjim, bluedogsd, kurt, kurious, cpresley, One Pissed Off Liberal, dotsright, SpecialKinFlag, psychodrew, FishOutofWater, Cofcos, sfbob, bnasley, on the cusp, MKinTN, chakadog, poligirl, OleHippieChick, Youffraita, Lujane, LaEscapee, Groucho Marxist, WearyIdealist, divineorder, lostinamerica, BigAlinWashSt, bsmechanic, maryabein, thirty three and a third, asym, kevinpdx, Keith Pickering, sfarkash, angel d, jpmassar, Amber6541, FogCityJohn, I Lurked For Years, samanthab, pixxer, DiegoUK, Betty Pinson, MsGrin, catlady, Lost Left Coaster, ozsea1, StateofEuphoria, sostos, jm214, vahana, cv lurking gf, myadestes, Teiresias70, thomask, wintergreen8694, myrmecia gulosa, PhilJD, DRo, Cpqemp, Auriandra, YaNevaNo, KansasNancy, IndieGuy, Jakkalbessie, This old man, LittleSilver, DrCoyle65, MartyM, flume, peptabysmal, Robynhood too, Heavy Mettle, Hammerhand, Most Awesome Nana, SethRightmer, Silvia Nightshade, Ray Pensador, Blue Bell Bookworm, Chaddiwicker, atana, countwebb, jbob, eyo, unfangus, alice kleeman, Ginsu, dannyboy1, Dodgerdog1, jbsoul, VoteWisdom, jrand, Infected Zebra, sillycarrot

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site