This article was written by the CKE CEO, a man who receives a base salary of $1,070,000 a year as well as bonuses of up to $2,500,000 per year.
That's just the CEO.
Sure, the Board of Directors could reject their annual bonuses and cover the cost of basic health care for a good number of their employees, but that would mean they might have to downsize the Bentley to a Mercedes.
That's a tear running down my face....
Look, I make six figures a year and have great health care coverage, but the pay of the top-tiered executives has gotten out of hand to a point where they are paid beyond what they're worth and the value they bring to the company.
Further, these multimillion dollar "golden parachutes" that are awarded to the men who leave their companies in tattered ruins need to end.
James, I make far less than what you make, but I don't begrudge you what you make.
Do you think maybe the CEO of CKE should begrudge Steve Jobs or Bill Gates or Mark Zuckerberg for the billions that they made? Do you think these individuals made far too much money? I don't -- they developed companies and solutions which changed the way we work and live -- they shifted the paradigms for how we live and do business, in ways that many, many people find beneficial. Maybe Andrew Pudzer isn't worth billions, but he is very much accountable not only to a board of directors, but to the tens of thousands of people he employs.
the pay of the top-tiered executives has gotten out of hand to a point where they are paid beyond what they're worth and the value they bring to the company.
How do you know this? I'm sure in some cases it's true, but companies like CKE have boards of directors who, for the most part, work in the restaurant or related industries, who don't reject annual bonuses for CEOs, who don't begrudge them their salaries.
In any event, your attitude is just one of covetousness.
I posted this article because, while I don't know the writer personally, I dealt with CKE in a previous job, and I've worked both with and within the quick service restaurant industry.
If anything, that industry is one of the few private industries that represent a microcosm of the promise of America. You can start your career as a cashier or line cook, and you can advance into management and even corporate management or (franchise) ownership.
This is primarily a question of, "what is the role of government in the US?"
Mandating (a) that individuals purchase health insurance, and (b) that corporations can't hire anyone unless they also spend the money to provide health care, are two parts of this law that go far beyond anything that the writers of the constitution imagined should ever happen.
Much more appropriate a role in this country would be for government to stop "playing favorites" -- to level the playing field through simplified and equitable tax and regulation policies, to allow entrepreneurs to start and operate companies that make or sell products or services, to succeed or to fail on their own merit, without the government being "on their backs".
I'm among the first to suggest that there are some legitimate roles for government and regulations, such as seatbelt laws, or unemployment insurance. But even some of these go far beyond not just "what they're worth" or "what value they bring" (your criteria), but they are far into the category of meddlesome and even harmful.
Look, I make six figures a year and have great health care coverage, but the pay of the top-tiered executives has gotten out of hand to a point where they are paid beyond what they're worth and the value they bring to the company.
CEOs should be some of the most generous people on earth, and it is likely that many will be judged quite harshly on judgment day.
However, in an open market, whatever someone pays for their services is the value of their services. CEOs often bring specific skills, connections, etc. that cannot be found in but a few qualified individuals, creating the high demand and thus the current pay.
John writes: "your attitude is just one of covetousness."
How dare you, good sir. I am many things, but envious is not one of them!
I'd just like to know how we've come to determine that a CEO is "worth" 200 or 300 times their average worker by mere virtue of their title. I'm not talking about true innovators like Bill Gates and Steve Jobs but your average run-of-the-mill CEO. Who's making this assessment, anyhow?
I'd just like to know how we've come to determine that a CEO is "worth" 200 or 300 times their average worker by mere virtue of their title. I'm not talking about true innovators like Bill Gates and Steve Jobs but your average run-of-the-mill CEO. Who's making this assessment, anyhow?
Average "run-of-the-mill" CEOs are not worth anything by "virtue of their title." Performance--measured in this case by the bottom line--is what tends to count in the business world.
While innovation is useful, CEOs are often valued for management skills. If a CEO is able to substantially increase the profits of an enormous corporation, even if through mundane, non-innovative channels, the money he receives is "worth" it to those who have a monetary stake in the success of the company.
In the end, CEOs are just leaders of an organization. All organizations assign a certain value to their leaders, given the importance of the decisions made at the top. In the case of modern, Western business, this is reflected in greater salaries and bonuses.
The huge pay creates huge competition for the very limited number of slots. Does the cream always rise to the top? Probably not, yet it is a market mechanism that drives high CEO compensation.
The problem with this analysis is that any/every company expense "stifles" job creation. Let's do away with employee vacations - that stifles job creation. Let's do away with all insurance for employees - that stifles job creation. Let's reduce everyone's wages to the minimum wage since higher wages reduces job creation. As noted the CEO isn't offering to reduce his salary or his insurance to help his company out.
Something just seems strange when almost every other advanced industrialized economy can provide health care for all of it's citizens and the US can't?
This article was written by the CKE CEO, a man who receives a base salary of $1,070,000 a year as well as bonuses of up to $2,500,000 per year.
ReplyDeleteThat's just the CEO.
Sure, the Board of Directors could reject their annual bonuses and cover the cost of basic health care for a good number of their employees, but that would mean they might have to downsize the Bentley to a Mercedes.
That's a tear running down my face....
Look, I make six figures a year and have great health care coverage, but the pay of the top-tiered executives has gotten out of hand to a point where they are paid beyond what they're worth and the value they bring to the company.
Further, these multimillion dollar "golden parachutes" that are awarded to the men who leave their companies in tattered ruins need to end.
... I make six figures a year...
ReplyDeleteJames, I make far less than what you make, but I don't begrudge you what you make.
Do you think maybe the CEO of CKE should begrudge Steve Jobs or Bill Gates or Mark Zuckerberg for the billions that they made? Do you think these individuals made far too much money? I don't -- they developed companies and solutions which changed the way we work and live -- they shifted the paradigms for how we live and do business, in ways that many, many people find beneficial. Maybe Andrew Pudzer isn't worth billions, but he is very much accountable not only to a board of directors, but to the tens of thousands of people he employs.
the pay of the top-tiered executives has gotten out of hand to a point where they are paid beyond what they're worth and the value they bring to the company.
How do you know this? I'm sure in some cases it's true, but companies like CKE have boards of directors who, for the most part, work in the restaurant or related industries, who don't reject annual bonuses for CEOs, who don't begrudge them their salaries.
In any event, your attitude is just one of covetousness.
I posted this article because, while I don't know the writer personally, I dealt with CKE in a previous job, and I've worked both with and within the quick service restaurant industry.
If anything, that industry is one of the few private industries that represent a microcosm of the promise of America. You can start your career as a cashier or line cook, and you can advance into management and even corporate management or (franchise) ownership.
Health insurance premiums just go up and up as you get older.
ReplyDeleteMany people can't afford them.
So I guess they should just go without and die, even while the government taxes them to support its wars and subsidize corporate interests.
How Christian.
This is primarily a question of, "what is the role of government in the US?"
ReplyDeleteMandating (a) that individuals purchase health insurance, and (b) that corporations can't hire anyone unless they also spend the money to provide health care, are two parts of this law that go far beyond anything that the writers of the constitution imagined should ever happen.
Much more appropriate a role in this country would be for government to stop "playing favorites" -- to level the playing field through simplified and equitable tax and regulation policies, to allow entrepreneurs to start and operate companies that make or sell products or services, to succeed or to fail on their own merit, without the government being "on their backs".
I'm among the first to suggest that there are some legitimate roles for government and regulations, such as seatbelt laws, or unemployment insurance. But even some of these go far beyond not just "what they're worth" or "what value they bring" (your criteria), but they are far into the category of meddlesome and even harmful.
Morrison: So I guess they should just go without and die, even while the government taxes them to support its wars and subsidize corporate interests.
ReplyDeleteHow Christian.
How inane.
James said:
ReplyDeleteLook, I make six figures a year and have great health care coverage, but the pay of the top-tiered executives has gotten out of hand to a point where they are paid beyond what they're worth and the value they bring to the company.
CEOs should be some of the most generous people on earth, and it is likely that many will be judged quite harshly on judgment day.
However, in an open market, whatever someone pays for their services is the value of their services. CEOs often bring specific skills, connections, etc. that cannot be found in but a few qualified individuals, creating the high demand and thus the current pay.
See also:
http://www.realclearpolitics.com/articles/2007/01/the_greed_fallacy.html
Further, these multimillion dollar "golden parachutes" that are awarded to the men who leave their companies in tattered ruins need to end.
It depends on the package and the broader circumstances. There's nothing intrinsically wrong with "golden parachutes."
Matthew, that Sowell article is a good article.
ReplyDeleteJohn writes: "your attitude is just one of covetousness."
ReplyDeleteHow dare you, good sir. I am many things, but envious is not one of them!
I'd just like to know how we've come to determine that a CEO is "worth" 200 or 300 times their average worker by mere virtue of their title. I'm not talking about true innovators like Bill Gates and Steve Jobs but your average run-of-the-mill CEO. Who's making this assessment, anyhow?
James said:
ReplyDeleteI'd just like to know how we've come to determine that a CEO is "worth" 200 or 300 times their average worker by mere virtue of their title. I'm not talking about true innovators like Bill Gates and Steve Jobs but your average run-of-the-mill CEO. Who's making this assessment, anyhow?
Average "run-of-the-mill" CEOs are not worth anything by "virtue of their title." Performance--measured in this case by the bottom line--is what tends to count in the business world.
While innovation is useful, CEOs are often valued for management skills. If a CEO is able to substantially increase the profits of an enormous corporation, even if through mundane, non-innovative channels, the money he receives is "worth" it to those who have a monetary stake in the success of the company.
In the end, CEOs are just leaders of an organization. All organizations assign a certain value to their leaders, given the importance of the decisions made at the top. In the case of modern, Western business, this is reflected in greater salaries and bonuses.
The huge pay creates huge competition for the very limited number of slots. Does the cream always rise to the top? Probably not, yet it is a market mechanism that drives high CEO compensation.
ReplyDeleteThe problem with this analysis is that any/every company expense "stifles" job creation. Let's do away with employee vacations - that stifles job creation. Let's do away with all insurance for employees - that stifles job creation. Let's reduce everyone's wages to the minimum wage since higher wages reduces job creation. As noted the CEO isn't offering to reduce his salary or his insurance to help his company out.
ReplyDeleteSomething just seems strange when almost every other advanced industrialized economy can provide health care for all of it's citizens and the US can't?