Should CEO's salaries be capped?

Should CEO's salaries be capped?

  • Yes, they should be capped

    Votes: 100 38.9%

  • No, they should not be capped

    Votes: 139 54.1%

  • Other

    Votes: 18 7.0%
  • Total voters
    257
MartinGB

MartinGB

MyBroadband Staff
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Do you think CEO salaries should be capped or do you think the free market should decide what they are worth?
 
I think executive pay should be capped as a percentage of the average salary of the company. Otherwise we will keep marching down this path where middle class get poorer and poorer and inequality goes beyond what we last say during the Feudal age.
 
Cius said:
I think executive pay should be capped as a percentage of the average salary of the company. Otherwise we will keep marching down this path where middle class get poorer and poorer and inequality goes beyond what we last say during the Feudal age.
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I like this, but as it would be based on average, the highest increases will be senior management anyway - driving up the average, with no real improvement for the average worker.
 
GhostSixFour said:
I like this, but as it would be based on average, the highest increases will be senior management anyway - driving up the average, with no real improvement for the average worker.
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Average excludes executive pay is how I was envisioning it. You could also have industry specific multipliers. Obviously a security company should not have the same ratio as an investment bank as the average staff is vastly different.
 
Cius said:
I think executive pay should be capped as a percentage of the average salary of the company. Otherwise we will keep marching down this path where middle class get poorer and poorer and inequality goes beyond what we last say during the Feudal age.
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If the middle class is getting poorer, it is due to one thing and one thing only, and that is inflation. And inflation is almost always caused by monetary and fiscal policy.
 
konfab said:
If the middle class is getting poorer, it is due to one thing and one thing only, and that is inflation. And inflation is almost always caused by monetary and fiscal policy.
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Agreed, but the gap between executive pay and average pay has been moving up since the 1980's steadily and its getting progressively worse. Has to stop somewhere. I don't care who you are, one person representing a company of thousands of workers is not worth that much more than the thousands who's work actually makes that person successful.
 
Cius said:
I think executive pay should be capped as a percentage of the average salary of the company. Otherwise we will keep marching down this path where middle class get poorer and poorer and inequality goes beyond what we last say during the Feudal age.
Click to expand...
Maybe median salary, not average. Top management would inflate the average...
 
Cius said:
Agreed, but the gap between executive pay and average pay has been moving up since the 1980's steadily and its getting progressively worse. Has to stop somewhere. I don't care who you are, one person representing a company of thousands of workers is not worth that much more than the thousands who's work actually makes that person successful.
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Then those 1000's should start their own company.
 
I'm 5years at this company no increase, he can't afford to give me increase but will give me a bonus that was the answer about a year ago. He was on 3 times on holiday so far, he is building (not buying) a holiday house in another town.
 
Cius said:
Average excludes executive pay is how I was envisioning it. You could also have industry specific multipliers. Obviously a security company should not have the same ratio as an investment bank as the average staff is vastly different.
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How about Remgro and Bidvest? Which multiplier do you use there?
 
Cius said:
Agreed, but the gap between executive pay and average pay has been moving up since the 1980's steadily and its getting progressively worse. Has to stop somewhere. I don't care who you are, one person representing a company of thousands of workers is not worth that much more than the thousands who's work actually makes that person successful.
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That isn't how economics works. Why do sports stars get paid millions for playing sport, but maths teachers, who are arguably providing more value to society (provided they are not teaching woke b.s) are not paid very well.

The answer is margianislm

What is marginalism? It is the notion that economic value extends from the incremental choice of one unit at a time.

Why does this matter?

Let’s say a friend invites you to his wedding. You say that you would love to go, but you have a work meeting you must attend that very day. You really want to go, but you can only do one thing at a time, and protecting your career at this point seems gigantically important.

Your friend understands. For now. But then the wedding comes, and you are not there. The picture album comes out, and you are nowhere to be seen. The memories are beautiful and exciting, yet you are not part of them. Over time, your friend begins to think: Hey, I thought he was a friend, but he ditched my wedding with some lame excuse. He must not be the friend I thought he was. I hate him.

This happens all the time. It happens because people do not think about marginal utility. It is not constantly in our minds. That’s hardly a surprise, because it took humanity one-hundred-thousand years to discover it. In scientific terms, it is a fairly recent discovery. It will probably take another few hundred years before the concept is emblazoned on our hearts. Meanwhile, those who get it are better at navigating life.

For example, I have a cup of coffee in front of me. I made it with my Keurig coffee maker. Each Keurig cup costs 50 cents. Is that too much or too little? On the one hand, it is crazy expensive. I could pay $4 for a full can of coffee and make probably 40 cups, paying only 10 cents per cup.

Why don’t I do this? Because my choice is made at the margin. I’m not evaluating a whole stock of a good or consuming an entire pot much less the whole world’s coffee supply. So the lower price of the whole is of no matter. I’m making my value judgments on just the one cup of coffee that I want to drink right now. This is the relevant unit, not some abstraction concerning how much coffee is at the store or on the ships coming from Africa or the whole stock of coffee growing in plantations all over the world. What matters to me in making the choice of whether the coffee is “worth it” is the cup right in front of me.
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https://www.aier.org/article/cuckoo-for-marginalism/

And "excessive" CEO pay is directly caused by inflation. Inflation destroys savings, so people put their money into businesses and fixed assets. That money needs to grow in said businesses, so shareholders are quite happy to pay a CEO a lot of money, so long as they grow the business and return the value of the money.

Wheras, if we didn't have inflation, people would be quite happy to put their money in bank accounts. Investing money in businesses would be less important for people who have capital.
 
www.statista.com

CEO to worker pay ratio in the U.S.| Statista

In 2024, it was estimated that the CEO-to-worker compensation ratio was about ***** in the United States.
www.statista.com www.statista.com

In 1980 CEO compensation was 37 times worker pay, a good amount. One good CEO takes home 37 normal salaries. Today it sits at 398. At what point are we peasants and lords again out of curiousity. I don't care what people say, its broken, and wrong. If you own the company that is different. I am not talking about that. CEO's are just employees like the rest of us by how come they get to earn 400 times their average worker? Are CEO's today 10 times more productive than 1980's CEO's? I doubt it.
 
Only poor people would say a CEOs salary must be capped. If I've worked my arse off to build a business I should 100% be rewarded
 
Cius said:
www.statista.com

CEO to worker pay ratio in the U.S.| Statista

In 2024, it was estimated that the CEO-to-worker compensation ratio was about ***** in the United States.
www.statista.com www.statista.com

In 1980 CEO compensation was 37 times worker pay, a good amount. One good CEO takes home 37 normal salaries. Today it sits at 398. At what point are we peasants and lords again out of curiousity. I don't care what people say, its broken, and wrong. If you own the company that is different. I am not talking about that. CEO's are just employees like the rest of us by how come they get to earn 400 times their average worker? Are CEO's today 10 times more productive than 1980's CEO's? I doubt it.
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Their value is most likely 400x more than your average worker. Time worked is not equal to value
 
It's tricky. I hate regulation, yet here I go.

If the CEO files a private jet, and has 5 holiday homes but pays his employees a decent salary, good for him.

If the CEO flies a private jet, but employees can't afford accommodation or food something is wrong. I guess they are free to leave, but it's not always so easy.
 
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