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Comment by kartan | Hacker News Reader

> And executives

That is the key. Executives are taking the lion's share.

https://www.cnbc.com/2018/01/22/heres-how-much-ceo-pay-has-i...

Pedantic nit: they aren't taking the lion's share, they are just taking a much larger share. CEO pay makes up a small fraction of total pay given to all employees so it's not "the lion's share".

what qualifies as a lions share?

> what qualifies as a lions share?

If you follow Phaedrus's telling[0], introduced as "Partnership with the mighty is never trustworthy" -- all of it:

"I take the first portion because of my title, since I am addressed as king; the second portion you will assign to me, since I’m your partner; then because I am the stronger, the third will follow me; and an accident will happen to anyone who touches the fourth."

Other versions from around the world typically have the lion taking a majority of whatever is being divided, and whenever possible, everything.

--- [0] https://en.wikipedia.org/wiki/Lion%27s_share#The_Phaedrus_ve...

The better question, in my opinion, is what qualifies as a "CEO?" The article makes it clear that they just cherry-picked the top paid 350 CEOs in the country. But there's nearly a quarter million CEOs in the US.

The article states it's the largest 350 company CEOs. Probably based on https://www.epi.org/publication/ceo-compensation-surged-in-2...

One thing that article doesn't touch on, if we returned ceo pay to 1978 average of 30:1, how much of a raise would that give each employee?

In 1978, China wasn't what it is now. Wages for workers has stagnated in the US but not abroad.

Or do you propose returning Chinese workers' wages to 1978 levels in order to afford restoring American wages?

Not necessary. The economy isn't a zero-sum game. There is more wealth to go around now than in 1978.

> Not necessary. The economy isn't a zero-sum game. There is more wealth to go around now than in 1978.

True, but it's been increasingly overvalued since the middle ages with the liberalisation of compound interest. That particular activity is zero sum and will concentrate wealth in one end until real wealth generation (farming, mining and refining of the results of the former two) becomes infeasible. Right now it's Venezuela, my bet is South Africa being next. Europe in our lifetime.

After reading your comment twice, I think you're somehow blaming the shitstorm that the Chavez / Maduro governments brought upon their own country on the liberalization of compound interest, but I can't fathom how you'd conclude that, so I'd love for you to correct my understanding of your comment.

Pretty sure if you reduced executive pay to being no more than 30:1 where the 1 is a typical Chinese unskilled labor salary, the executives would be even less happy about it.

That has nothing to do with the parent's question. Rising Chinese salaries don't cause executives to need more compensation than the did in the 70's relative to their (American) workers. If your point is that high American worker salaries aren't supportable now due to competition, you would have to explain why American executives' salaries are increased compared to the 70's.

My point is that both executives and workers benefited from globalization, advances in telecommunications and transportation.

Unfortunately to American workers, it turns out that the workers who enjoyed the upside were some of the poorest in the world and not the very expensive American workers of the mid-1900s.

Fortunately to American executives, they started the race ahead of everyone else and with their multinationals corporations captured most of the upside from globalization.

Almost none. If you split the CEO pay across all the mass of workers, it won’t come out to much.

On the same lines, if you take little from each worker and give it to the CEO, its worth a lot to one individual.

In absolute terms perhaps. But $20 per week extra would be significant in relative terms to many workers.

Exactly, small increments of money like that can mean all the difference. It can be enough to stop worrying about paying the power bill, to buy enough healthy food for dinner, or to save up more easily to get the car fixed.

What if you raised the workers' wage rather than reducing the CEO pay?

If it's a high margin business (e.g. Apple), that will help the workers a lot, while depressing shareholder returns.

If it's a low margin business, it will go bankrupt.

Note that in the past several years, shareholders have experienced massive returns due to rising corporate profits, largely because corporations have held workers' wages stagnant throughout the economic recovery/boom.

> If you split the CEO pay across all the mass of workers, it won’t come out to much.

I agree that if you split the CEO pay it does not affect so much the employees.

I just wanted to highlight is that the CEO does NOT want the employees in the board as they may see the CEO's salary as unfair. So, to protect his own salary, the CEO keeps employees out of the structures of power.

Then we can argue if is that lack of power the one that keeps or not workers salaries low. But workers are not represented becuase is against the CEO best interest so her own salary can grow unchecked.

But what motivates the board to pay the executives so much?

Either the board is corrupt and is wasting company money on their executive buddies and the shareholders ought to discipline the board (and perhaps putting some salt-of-the-earth workers on it may be a good way to do that, but certainly no silver bullet), or they pay what they need to keep the executives from jumping ship and go work for a competitor, and they are in fact not overpaid. I suspect there are companies that fit in either category.

Typically boards and executives at top companies are a very insular group. I.E. you have to know someone to be someone. Same as the mob except greedier.

That article is about the top paid 350 CEOs in a country where there are nearly a quarter million CEOs. Do you have any stats on how CEO pay has actually changed on average?

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