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Microsoft CEO Nadella's compensation drops... to $48M — CEO to employee pay ratio hits 250 to 1
(www.theregister.com)
this post was submitted on 21 Oct 2023
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I'd support laws that limited CEO:Employee wage ratio to something more like 10:1.
If you pay me 100k and you're making 1m, I can accept that there is no room for a raise or a bonus.
If you are making 10m and I am making 100k and you deny me a raise, I'm feeling disenfranchised.
I'd like to see such a rule, but doubt that there won't be any loopholes to circumvent it. You can already see some of those in sports. There are a lot of stories on how clubs "dealt" with financial fair play in european football and I heard rumors of a similar thing with the american salary cap too.
Just some ideas:
All in all good luck with finding a politician pushing this through (most lf the are exactly in those positions) and finding all the loopholes. Rich people can pay a lot of experts to become even richer
There will always be loop holes, but then you fix those. And regardless, loop holes are not used by all, and they take time to find. So that’s no reason not to do it.
Absolutely right, but nobody should expect it to be a perfect solution to all the problems.
All you have to do is have a subsidiary corporation that the executives work for. They get paid whatever insane amount and the parent company hires the executive company so it's not direct payroll. I've seen this exact arrangement done for other tax reasons.
Those are only loopholes if they are allowed to exist. If people do those things, but then get fined/persecuted as they are infringing on the spirit of the law to limit executive/worker pay ratio, then they are not loopholes right?
It's better to place the burden on the company as a whole per revenue than per CEO pay differential. Amazon for example made somewhere in the 500 billion dollars in revenue for 2022 but for all ~1.5m employees only spent ~42 billion on salaries for an average of ~28k a year.
They have so much ample revenue to use for increased salaries that goes unanswered.
Won't work, can't work.
There are companies which have insane revenues but tiny profits - let's say manufacturing, where you need to pay a shitton for materials and workers, just to get a bit in return.
There are also companies where the main source of income is selling people's time, say a consulting firm like McKinsey. Their income/revenue ratio is gonna be totally different from the first example.
I'm sure there are good ways to do it but this ain't one of them.
I can see your point, but I am also tired of pointing to CEO salaries and thinking that reducing them will make any meaningful increase on company wide salaries.
There's always making cost scalable to reported profit. It's annoying to see a company like Amazon make so much but pay employees so little because it's"competitive pay" to the business they're ruining through monopoly.
Do you live in Europe? Then do consider signing the commission for the EU commission https://www.tax-the-rich.eu/
This. So this. I've been saying the same for years, if not decades. The highest salary in a company should never be allowed to pass the lowest by a factor of 10.
Also, companies should be limited to 1000 employees and an x amount of value.
Companies should become less influential