Should CEO's salaries be capped?

[Fulcrum29]

No.

 

[cguy]

One of the issues is that CEOs and executives never really lose money when companies collapse and often due to their own poor management decisions. They get paid, like stock brokers.

If they were known to do their job badly, it will end their career. They don’t lose past money but can lose future money. If found negligent or criminal or some such, there are actually “clawback” mechanisms to retrieve given funds.

You mean pursue pet projects?

Sure, if you would SpaceX? the Bill and Melinda Gates foundation or DE Shaw research pet projects. I know other billionaires who have poured an extraordinary amount of money in medical research and environmental restoration.

Even aside from this, their main money maker is a passion project: bringing new computer and technology to the world, reforming consumer shopping, payments, transportation, power, etc.

 

[stefan9]

No.

 

[noxibox]

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

So, not the CEO then. But just for giggles how many companies are there built exclusively, and I mean without any other people involved, by the CEO?

 

[noxibox]

One of the issues is that CEOs and executives never really lose money when companies collapse and often due to their own poor management decisions. They get paid, like stock brokers.

This is pretty much it. In fact the typical scenario is that an incompetent CEO will be paid a substantial sum to leave early, but it will be recorded and reported as a voluntary separation. That CEO will then move on to another fat salary somewhere else.

Today it is made even worse by giving top executives large tranches of shares. This acts as a corrupting influence while also excessively rewarding a small minority. Frankly the whole system has been corrupted. But of course there isn't really any will to fix it.

 

[noxibox]

While some CEO's enjoy the money that they make, x million per year, is just crazy, IMO. If I was appointed CEO of a company, I would have said that I really don't want to have these crazy bonuses at all, but rather put that back into the business, and it's employees, draw a normal liveable salary.

That's exactly what a tiny number of moral CEOs have done.

 

[Harmonic]

So, not the CEO then. But just for giggles how many companies are there built exclusively, and I mean without any other people involved, by the CEO?

None. A business isn't a charity and you're not entitled to a % of revenue/profit. It's done for the sole purpose of the founders/shareholders interests. If a worker is unhappy with that, they're free to go through the massively stressful and difficult task of starting their own business.

 

[Moto Guzzi]

Do you think CEO salaries should be capped or do you think the free market should decide what they are worth?

---------------------------------------------SIMPLE------------------------------------------------------------------
Ok, The Boardroom of 1992+....Lets address the whole boardroom concept...
1-I think as long as society benefit positively from what is happenning here, the sky is the limit. Deserve your richness society you operates in lets you achieve, no problem.
-Make quality products that last and is easily serviceable.
-Deliver Quality services
-Know your product/Service if you answer a phone and be able to make a decission.
---------------------------------------------HOWEVER--------------------------------------------------------------
2-However, if society is short circuited and the life sucked out of it, with all sorts of smart modern digital efforts, its a different story, and this is where a KATZ should be pulled out to get them in line again, so society benefit from their excistance again, no Greed, no exploitations, no Modern Corruption, ZERO.......Work for your money, don't steal.
-Your products are shiny & precise but unreliable.
-Your products are difficult and unnecessary costly to service.
-Your products are made flimsy, your screens crack all over the place.
-Your Call Centre isolate public from knowledgeable staff.
-Your management is unreachable.
-You add over and above your basic cost, Admin fees, Willy Nilly fees, Levies, etc etc, so you basicly tricks me into buying your product/service.
-Your cost keeps on rising while your rules keep on changing to unbenifit your supporters.
----------------This boardroom and the righ arm=CEO needs a steel CAP.

 

[zulucat]

Why stop the gravy - let the gravy flow. They have 'earned' it.

 

[Mista_Mobsta]

While some CEO's enjoy the money that they make, x million per year, is just crazy, IMO. If I was appointed CEO of a company, I would have said that I really don't want to have these crazy bonuses at all, but rather put that back into the business, and it's employees, draw a normal liveable salary.

For me, money is not that important, I'd rather invest that into people, and be a humble person.
Not everything is not about money.
You can't buy a real friend with money. I'd rather be having a moderate salary that I can live off comfortably, and be surrounded by real friends and family that cares, than to live alone in a mansion, surrounded by people who are after the money.

Earthly possessions is not that important. That includes money. People's relationships is more important to me than making a dump-load of money.

The problem is summarised in a single word: GREED

Money changes people - ask anyone that has ever done business with a family member or friend...it rarely goes smoothly. Ask anyone that had a rich relative pass away and have the executor summarise the will - people go crazy when there is money on the line!

The same with a CEO - the power that type of position affords attracts a certain personality figure - someone that has to make some extraordinarily difficult decisions on a daily basis that affect a whole host of people and companies. The certain personality trait that is required of someone to make these difficult decisions can't lend itself to one of being overly empathetic or emotional and as such, they tend to be very self-centered or seem to be selfish.

 

[DreamKing]

no, but I don't think they are worth for their salaries.

in most cases, a ceo is the most useless work force in a company.

 

[henkc]

Lots to answer here.

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

The CEO is an employee. Building a business - ownership is something different.

The shareholder is the owner, the CEO is just another employee. It's an operational role tasked with realising the board's vision, whose role in turn is to deliver shareholder value.

For some garage operations, the shareholder, director and CEO are all the same person. This wouldn't apply to them, because even if their CEO salary is capped, their profits are not by virtue of being the shareholder...

See above, although the salary they draw could still be determined or capped by something based on ethics, economics or rules.

The point of my question is: I can turn over a million per day, I'm paying you the market related salary. Why should I increase your salary?

Can you turn over the million per day without me being here? If not, you'd better think about increasing my salary before I work it out. If not, why did you employ me in the first place?

On a related note.

At which level does a billionaire become a drain on society.

The billions he's hoarding was obtained at the expense of either/or shareholders, customers, employees. Would humanity not be better off as a whole if many of those billions were in the economy, in the pockets of customers/employees or ordinary shareholders.

Would 10 000 truly middle class people and a 1 guy with 1 billion not contribute more than 10 000 workers on food stamps and a 1 guy with 100 billion?

What's the lifestyle upgrade he gets from having 1B to having 50B. Surely nothing. Maybe the 1B is enough.


Disclaimer: The above is not based on any sound economic theory or knowledge.

Unless it's based on astute observation and a touch of logic.

Agree, and don't let any one tell you that "Trickle Down Economics" is a thing, it's all a bunch of horse ****.

The problem is summarised in a single word: GREED

Money changes people - ask anyone that has ever done business with a family member or friend...it rarely goes smoothly. Ask anyone that had a rich relative pass away and have the executor summarise the will - people go crazy when there is money on the line!

The same with a CEO - the power that type of position affords attracts a certain personality figure - someone that has to make some extraordinarily difficult decisions on a daily basis that affect a whole host of people and companies. The certain personality trait that is required of someone to make these difficult decisions can't lend itself to one of being overly empathetic or emotional and as such, they tend to be very self-centered or seem to be selfish.

And then they start to describe these personality traits as desirable, look for them in their immediate inner circle and successors and create a vicious cycle.

 

[Harmonic]

Can you turn over the million per day without me being here? If not, you'd better think about increasing my salary before I work it out. If not, why did you employ me in the first place?

If you can "work it out" then go for it. Only an idiot would cry about their salary instead of "working it out" if this was the case

 

[AlphaBravo]

No. The Board (usually majority shareholders) decides the CEO's remuneration. The Remco (Remuneration committee, that usually have one or two board members on it) decides on the salary bands for employees.
So in essence, the shareholders decide who gets paid how much.
This is where the debate originates, from Listed entities where the public are the shareholders. But the board still decides how the CEO is remunerated.
But, as long as the shareholders are happy with the return on equity, then why bother about the wage gap. So if the shareholders are happy with their returns, then the employees of that company should theoretically also receive a bonus of sorts as they have proven their ability to fulfill the vision.

 

[Aaqielah]

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.

No person in the company should earn less than 50% of what the CEO does. That way everyone strives to make the company more successful. And all politicians should live in the poorest area of their communities.

 

[Pak Fa Fui]

Marxism and communism gets such a bad rep on this forum but so many posters here seem to prefer it

 

[Harmonic]

Marxism and communism gets such a bad rep on this forum but so many posters here seem to prefer it

I know. I actually can't believe it. Apparently an owner must take all the risk, stress and extra work on for max 50% more than the cleaner

 

[cguy]

No person in the company should earn less than 50% of what the CEO does. That way everyone strives to make the company more successful. And all politicians should live in the poorest area of their communities.

No, that way all the competent people strive to leave the company.

 

[v3gout]

CEOs should only accept a reasonable amount - voluntarily.

 

[cguy]

CEOs should only accept a reasonable amount - voluntarily.

What is reasonable though? Determined by market forces? That’s what we have. Why is it so high? Well, it costs a premium to convince someone who likely has very little need or desire for standard compensation levels to spend their days and nights thinking about a business.