CEOs beware: Your astronomical salaries may soon cost you customers
washingtonpost.com
washingtonpost.com
If a good CEO's decisions can make the average employee more productive (or less unproductive) by even few cents per hour of employment, he's worth that magnitude of salary when working for a company that big.
If we highlight the CEO-to-employee multiple, companies could game the metric by splitting into smaller companies that are slightly less efficient. For instance, there could be separate regional chains called "Walmart West" and "Walmart East", each with their own CEO who gets paid half as much for doing half as much work. They could even both hire the same guy and have him work both jobs at once, thereby reducing to a previously-solved problem! Or they could actually hire two distinct CEOS, which benefits the employees not at all - in fact, the employee situation might be made worse in various ways by the change - but at least the multiple would officially look smaller so: yay?
The corruption of governance and a sense of entitlement fuels CEO salaries. End of the day, the CEO of WalMart doesn't deliver $35M of value. His decisions have big impact, but there are dozens of people who can make those decisions, and many could do so for far less.
Marissa Mayer is on the Walmart board. H. Lee Scott, former Walmart CEO is on the Yahoo board. Why would Mayer want to make a stink about the Walmart guy's salary, an awkward conversation that would probably lead to a similar awkward conversation when she wants a raise at Yahoo.
The boards that I've seen (at a smaller scale) that work are ones where there is a diversity of interests. The minority political party member making a stink about the majority in a town board. Or the company board where a representative of labor controls a key committee.
> there are dozens of people who can make those decisions, and many could do so for far less.
Sure, or you could make the decisions by having a monkey throw darts at a newspaper for free. The important question is whether those dozens of people earning less would make as good decisions as the one currently doing the job. If the current CEO's decisions are even very slightly better he's worth the money given that level of scale.
Similarly, there are dozens of people who could play basketball for less so there was no need to pay Michael Jordan the big bucks.
I'm still buying Macbooks and iPhones and iWhatevers for as long as I think they're superior to the competition.
[1] http://www.bloomberg.com/news/articles/2015-04-17/tim-cook-s...
Further down in the article, it says: "Of course, people tend to show more moral gumption in surveys than they do in real life. In part this is because we are dealing with hypotheticals (who isn’t against child labor, in principle?). But also, people don't usually ponder issues of inequality while they’re buying their milk and groceries."
Tons of people. They need their children's income.
"[A]s of 2010, only 34% of people polled strongly supported letting homosexuals serve in the military, but half again as many — a full 51% — expressed that level of support for letting ‘gays and lesbians’ serve in the military. Ever since reading that I’ve worried about how many important decisions are being made by the 17% of people who support gays and lesbians but not homosexuals."
http://slatestarcodex.com/2015/04/15/trouble-walking-down-th...
I think certain words are given negative/positive associations by the media and those overtones have a lot more impact if you're only spending 4 seconds per question than if you're really thinking about it.
Those are not the same thing, though. Someone with a low income has a job, presumably.
Buying from a company that does not reflect their values is contradictory. The way to reconcile the conflict is with saving money ( and justifying that saved money as a future donation ) OR not shopping at the store that does not match their values.
I for one will never shop at Walmart - no matter how cheap it is.