Is it possible to hire a CEO for $250,000 a year?

[Ms Music]

Become a CEO. Apparently the median wage is now 9.7 million. That is $4645 per HOUR, folks.

Must be nice to make more in an hour than most of your employees make in an entire month.

http://www.komonews.com/news/business/Median-CEO-pay-rises-to-97-million-in-2012-208492131.html

 

[Greg Bernhardt]

Complain to the boards of these companies if you own stock, they make the decisions. Don't blame the CEO. You'd take the money too.

 

[ModusPwnd]

I wouldn't take that job at all. Not a chance. I value my life, time and family far too much.

 

[jim hardy]

It's the Looting of America.

courtesy http://www.historyfiles.co.uk/KingListsEurope/ItalyPopes.htm

"We hang the petty thieves and appoint the great ones to public office." ~ Aesop

see also http://townhall.com/columnists/thomassowell/2013/03/26/can-it-happen-here-n1548498/page/full

 

[AnTiFreeze3]

I was expecting this to be an add advocating for how stay-at-home mom's can make thousands of dollars at home while on the internet. Turns out there is no spam-bot that I can ridicule

But yeah, corporations are incredibly corrupt. Old news, unfortunately.

 

[daveyrocket]

So, what salary do you think is fair for a CEO of a major corporation?

 

[jim hardy]

So, what salary do you think is fair for a CEO of a major corporation?

Myself, i'd take their organization chart and multiply what they pay a line level worker by how many layers of management are in between line and CEO .

A good CEO draws his org chart upside down; that is, apex(him) on the bottom and line level workers at top just one step below customer base.

 

[AnTiFreeze3]

So, what salary do you think is fair for a CEO of a major corporation?

<$9.7million/yr

I would hope that you agree with that, as well.

But of course, a median can be skewed by outliers, like the CEO of CBS, who is making $60.3 million/yr. Regardless, they're making an absurd amount of money that is unreasonable in all accounts. I don't doubt that CEO's of major corporations undertake large amounts of responsibilities and pressure, and ought to be paid adequately, but the absurdity of the prices we're seeing is far more compensation than they ever deserve.

 

[krash661]

<$9.7million/yr

Regardless, they're making an absurd amount of money that is unreasonable in all accounts. ...
.. but the absurdity of the prices we're seeing is far more compensation than they ever deserve.

by what standard ?
what makes it absurd ?
what makes it non deserving ?

and also, why could i not apply your comment to your situation ?

what's the differences from your situation and CEO's ?

sounds a lot like a jealousy thing, IMO.

 

[ModusPwnd]

...but the absurdity of the prices we're seeing is far more compensation than they ever deserve.

The problem is, that is what the rest of the world thinks of us. We have set our minimum wage to be the top 10% highest income on the planet(link). A minimum wage worker in the US consumes more resources than the Earth can support (link). Its easy to cast the criticism up, but your claim of absurdity just as much applies to you and me as it does to them. Thats the problem with arbitrarily deciding those who are richer than you get "more than they deserve". The bulk of humanity makes the same claims against us.

Im happy to support high pay of CEOs in companies I own stocks of. When I do the math, giving them a pay cut and dividing out the saved money does not make much difference compared to the returns I am getting.

 

[MarneMath]

Complain to the boards of these companies if you own stock, they make the decisions. Don't blame the CEO. You'd take the money too.

The thing is I don't believe any stockholder who owns significant amount of stock in any company will ever be motivated enough to complain about CEO pay. I started my career in the business sector and one of the things you learn quickly is that image is nearly as important as the actual product. If company A pays their CEO 10 million per year and company B pays their CEO 10.5 million per year, and company A and B both are fighting for market share, the message company B is sending to investors is, "hey, look at us, we're obviously doing so much better than company A because we can afford to pay our CEO more!" It's really a stupid game of keeping up with the Joneses.

 

[Evo]

What kills me is that it seems like a CEO can all but completely destroy a company and still make off with a severance bonus of $20 million when the shareholders vote them out.

Here is a list of the most overpaid CEOs, based on poor performance.

http://www.businessinsider.com/25-most-overpaid-ceos-2010-10?op=1

 

[Ms Music]

I was expecting this to be an add advocating for how stay-at-home mom's can make thousands of dollars at home while on the internet. Turns out there is no spam-bot that I can ridicule

Sorry AntiFreeze, does this make you feel any better? http://wpmu.org/wp-content/uploads/2012/07/trackback-spam.jpg

"hey, look at us, we're obviously doing so much better than company A because we can afford to pay our CEO more!" It's really a stupid game of keeping up with the Joneses.

This is my thought also. Is it fair if the company is healthy? Wouldn't it make the company look even better if the employees were paid more than the average joe?

 

[Greg Bernhardt]

Sure it's ridiculous, but if you don't like it, discontinue use of that companies products. Otherwise it's none of your business. But no one will, because no one REALLY cares, they just like to complain and are jealous.

 

[Greg Bernhardt]

This is my thought also. Is it fair if the company is healthy? Wouldn't it make the company look even better if the employees were paid more than the average joe?

Business is about money. A company doesn't care if it looks good if it's broke and shareholders wouldn't be happy if profits are being left at the table because a CEO wants the company to "look" good.

 

[WannabeNewton]

If the people complaining were given the same opportunity to take the substantial salary, they would most probably take up the offer without a second's hesitation. People complain about the amount of money others make until they themselves have the opportunity to make that much, and suddenly the practice of manipulating people in the name of corporate greed is no longer a bad thing. This is nothing more than jealousy rearing its ugly head. When it comes to how people make money, smart business trumps ethics - money earnt legally is money earnt legally.

 

[krash661]

Sure it's ridiculous, but if you don't like it, discontinue use of that companies products. Otherwise it's none of your business. But no one will, because no one REALLY cares, they just like to complain and are jealous.

exactly.

 

[krash661]

If the people complaining were given the same opportunity to take the substantial salary, they would most probably take up the offer without a second's hesitation. People complain about the amount of money others make until they themselves have the opportunity to make that much, and suddenly the practice of manipulating people in the name of corporate greed is no longer a bad thing. This is nothing more than jealousy rearing its ugly head. When it comes to how people make money, smart business trumps ethics - money earnt legally is money earnt legally.

exactly.

 

[Nikitin]

The problem is, that is what the rest of the world thinks of us. We have set our minimum wage to be the top 10% highest income on the planet(link). A minimum wage worker in the US consumes more resources than the Earth can support (link). Its easy to cast the criticism up, but your claim of absurdity just as much applies to you and me as it does to them. Thats the problem with arbitrarily deciding those who are richer than you get "more than they deserve". The bulk of humanity makes the same claims against us.

Im happy to support high pay of CEOs in companies I own stocks of. When I do the math, giving them a pay cut and dividing out the saved money does not make much difference compared to the returns I am getting.

The obvious difference being the "bulk of humanity" do not produce anywhere near as much value as "us". These CEO wages are greatly demotivating to employees, it is far more than anyone can reasonably spend in a year and are probably the result of backhand deals which hurt a company's profitability.

Only way to justify this would be by explaining how American CEOs generate 20 times more value than European CEOs.

 

[BobG]

Become a CEO. Apparently the median wage is now 9.7 million. That is $4645 per HOUR, folks.

Must be nice to make more in an hour than most of your employees make in an entire month.

http://www.komonews.com/news/business/Median-CEO-pay-rises-to-97-million-in-2012-208492131.html

So you're assuming CEO's work 40 hours a week? That assumption might be the first flaw in your calculations. The second flaw is whether pay/hour is even relevant for a CEO.

Evo's list is more relevant. For a CEO, you should be getting paid for results; not for the hours you put in.

Most Underpaid CEO's

Most of these guys make less than the median, which makes sense, but it's the performance of their company that really makes them underpaid. Some of them make more than the median salary.

Most underpaid: Jeff Bezos, who makes less than $2 million a year.

Second most underpaid: Steve Jobs, who makes $1 a year. In other words, in comparison to Jeff Bezos, Steve Jobs is overpaid at even $1 a year!

Yes, it's hard to believe that a single dollar per year wouldn't automatically make a CEO the most underpaid, but Jeff Bezos's Amazon performed better than Apple. The performance is more important than the actual salary by time you reach CEO level. (This is also the danger of accepting absurdly low compensation as a CEO. Do you really want to hear people say that at $1 a year, you're overpaid in comparison to even one other CEO?)

And, by the way, outliers would skew the mean salary; not the median salary.

 

[ModusPwnd]

The obvious difference being the "bulk of humanity" do not produce anywhere near as much value as "us".

That's the same argument that is used to justify high CEO wages. It cuts both ways.

 

[krash661]

So you're assuming CEO's work 40 hours a week? That assumption might be the first flaw in your calculations. The second flaw is whether pay/hour is even relevant for a CEO.

Evo's list is more relevant. For a CEO, you should be getting paid for results; not for the hours you put in.

Most Underpaid CEO's

Most of these guys make less than the median, which makes sense, but it's the performance of their company that really makes them underpaid. Some of them make more than the median salary.

Most underpaid: Jeff Bezos, who makes less than $2 million a year.

Second most underpaid: Steve Jobs, who makes $1 a year. In other words, in comparison to Jeff Bezos, Steve Jobs is overpaid at even $1 a year!

Yes, it's hard to believe that a single dollar per year wouldn't automatically make a CEO the most underpaid, but Jeff Bezos's Amazon performed better than Apple. The performance is more important than the actual salary by time you reach CEO level. (This is also the danger of accepting absurdly low compensation as a CEO. Do you really want to hear people say that at $1 a year, you're overpaid in comparison to even one other CEO?)

And, by the way, outliers would skew the mean salary; not the median salary.

exactly,
and also, most CEo's do not have a life.

 

[Evo]

exactly,
and also, most CEo's do not have a life.

I've known CEOs that worked fewer hours a week than me and had quite a great life. Which CEOs don't have a life? By whose standards?

 

[edward]

exactly,
and also, most CEo's do not have a life.

Are you sure of that statement. They have the life they choose. Most people don't have that option.

 

[russ_watters]

These CEO wages are greatly demotivating to employees...

Do you have proof of that?

...it is far more than anyone can reasonably spend in a year...

So what? Who are you to tell me what I can/can be allowed to spend in a year?

...and are probably the result of backhand deals which hurt a company's profitability.

You are assuming that the rich must be corrupt! Yikes.

Only way to justify this would be by explaining how American CEOs generate 20 times more value than European CEOs.

Since when does supply and demand care about justification? Heck, it would make more sense to look at it the other way: people should explain why European CEOs are worth 20 times less. After all, it is Europe that endeavors to artificially hold down those pay rates. The US just let's market forces have more say.

 

[Q_Goest]

I don't think it's a jelousy issue.

There's an expectation that anyone earning $x amount of money should be providing MORE THAN that much value to the company. Being paid more money than the value you bring in isn't fair to other employees.

Are there any studies showing that a typical CEO actually brings value to their company commensurate with what they earn?

 

[russ_watters]

I don't think it's a jelousy issue.

There's an expectation that anyone earning $x amount of money should be providing MORE THAN that much value to the company. Being paid more money than the value you bring in isn't fair to other employees.

Are there any studies showing that a typical CEO actually brings value to their company commensurate with what they earn?

None posted, but lacking that, why is the default assumption that they don't? Or worse even, that they are corrupt? Why isn't the default assumption that due to supply and demand, CEOs get paid exactly what they are worth?

Note that "bringing value" is not the same as having value. If a CEO brings only $1 million worth of value to a company but another company offers him $2 million, you'll have to pay him $2 million to keep him. That's value as determined by market forces.

That's an unfortunate wording for your last sentence, by the way...

 

[MarneMath]

I don't think it's a jelousy issue.

There's an expectation that anyone earning $x amount of money should be providing MORE THAN that much value to the company. Being paid more money than the value you bring in isn't fair to other employees.

Are there any studies showing that a typical CEO actually brings value to their company commensurate with what they earn?

I agree with this sentiment.

I think most Americans don't have a problem with wealthy CEO if the company is performing well. What aggravates many people is when a CEO does a poor job and still gets paid millions when they are fired. What boggles a lot of people's minds is the simple question, "how can a CEO or a CFO still get millions after x months on the job and being fired?" While yes, I understanding being a CEO can be stressful and time consuming, I do believe the salary eliminates any room for excuses.

 

[krash661]

the size of the company
matters in my ceo comment.
plus other factors.

 

[Evo]

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