I always see people show this equation and it never made sense to me.
No one is saying the CEO is taking money the employees would have otherwise earned. When you divide it out like that of course its a pittance per employee.
The statement is about the relative scale of the CEO pay to one employee. I don't care about the difference applied to all employees.
An absurd parody I always imagine: John is 7ft tall. His group of 6 other other friends are only 6ft tall. Wow John is really tall! Nah, if you distribute his tallness between his friends they would only gain 2 inches! That has nothing to do with John being 12inches taller than any one of them.
It frequently doesn't matter how much the CEO makes. It's not why the other employees aren't making more money. It's just a distraction. It boils down to "it's not fair". If what is important is the ratio between CEO pay and employee pay, then the board can cut CEO pay, and call it a day. That doesn't improve employee pay.
If the employees really only care about that ratio, then they should accept that outcome from their strike. That's not why they are on strike, they also want to be paid more, just like the CEO.
This is some of the most disingenuous crap I've read in a while. Flip it on its head:
"If c-suite really only cares about $ spent on labor, they would accept the productivity outcome of their salary proposals to employees. But they don't. They want to get more productivity, just like the workers of [insert competing corp], while not changing or even reducing comp."
The reason your comment is disingenuous is that it assumes that the best place for this money to go is into c-suite/board pockets, and for some reason assumes that workers wouldn't take the couple extra grand the CEO pay split would give them. I challenge any CEO to put it up to a (non-binding, don't shit yourself) company-wide vote.
But let's disregard the salary split. It is an incredibly simple-minded way of approaching what to do with millions/year. Are all of you, who justify these ridiculous ratios, truly unable to think of ways to spend dozens of millions of dollars to improve all employees' qualities of life? Those who spend all this money on consultants to figure out how to squeeze an extra penny of profits can't figure out how to further optimize the health of the workforce instead?
Cue the comments about "no choice, fiduciary duty". Makes me sick.
Where did I state that the 21B in profit needs to go to shareholders? I'm all for giving the employees more of the profits, but not because it's unfair that the CEO gets paid well.
The reason we're even talking about this means the UAW's demand (management raised their take 40%, line workers deserve that as well) is an effective one.
yes, you're right, if you distributed john's height across his 6 friends, they'd all still be normal height, and nothing would really change for them, except that john would no longer be abnormally tall. you've taken a situation where there's something noteworthy, and made that noteworthiness disappear.
the same logic applies to CEO pay. you can either pay the CEO a lot, or you can pay everybody else an amount so slightly different that it's unnoticeable. there's value in paying a CEO a lot, or you can not pay them a lot, and not pay anybody else any more either. surely you can see how there might be value in offering a high salary for a role that can have a big impact on the company, and how simply not doing that and essentially erasing that money instead would be a bad decision?
The article suggests that the CEO is usually the highest paid position in a company, not the board members. The board is the most important position, however, as it is the representation of the ownership.
Google says: 167,000 GM employees Mary Barra salary: $29M
Distribute that salary across the whole workforce: $174 per employee
They should really be talking about it in terms of inflation or profit margin. GM profit for 2022 was $21B