CEO Pay Up 27% While Worker Pay Stalls...

[JohnStOnge]

From the article:

Median CEO pay in 2010 was $9.0 million, based on 158 Standard & Poor’s 500 index companies with the same CEO serving all of 2009 and 2010 that have reported CEO pay, according to the USA TODAY analysis of data from GovernanceMetrics based on proxies that have already been filed

There are all kinds of issues with that. That kind of "sampling" is not going to result in an unbiased estimate of what the median CEO salary is. Also, I think it possible that it would overestimate the increase in CEO pay and perhaps even create the impression that there was an increase when there was a decline.

Since the sample only includes CEOs who served in 2009 and were still serving as CEOs in 2010, it is possible that the estimate is biased upward. CEOs that were successful and rewarded may be over-represented. In fact, if I had to bet I would bet that is the case.

To get an estimate of median CEO compensation of S&P 500 companies one would have to take a probability sample (like random) of CEO compensation levels. You'd do that for 2009 and again for 2010 in order to estimate the increase in CEO compensation. Or you could just look at every company and it would be reality rather than an estimate.

These guys took this hapazard, probably biased sample of CEO pay to derive an estimate they then compared to an estimate of "worker" pay dervied by the Bureau of Labor Statistics from probability sampling.

They should never have even gone through the exercise. Thanks again, media, for creating yet another false impression.

[JohnStOnge]

I don't believe any of the Republicans on this thread see the situation as a problem at all...
Let them eat cake - has been the general feedback

After our completely corrupt banking system gets bailed out by tax payers and then bonuses itself billions shortly thereafter surely this little gaff isn't an indication of anything other than a mild "**** off"

Since I'm a Libertarian I'm not in the group you mentioned but I'm guessing my thoughts are along the same line as most Republicans here. It's not "let them eat cake." First of all, the "typical" United States worker isn't starving. I'd guess the "typical" American worker has plenty eat, a fairly new vehicle (or multiple vehicles), at least one nice TV (probably flatscreen), and lots of other material things.

What I disagree with is there is some inherent evil about CEOs making a lot more than the "typical" worker does. CEOs make the money they do because that's what the market for their services calls for. And them making what they do doesn't make things worse for the "typical" worker. If median CEO pay had declined in 2010 in stead of increasing (assuming it really increased, since the methodology employed by USA Today is really bad) that would not mean the median salary of "typical" workers would've increased by any more than it did. The "typical" worker gets paid based on what the market sees as what he or she has to offer is worth.

It's not "let them eat cake." It's "let them improve themselves, acquire new skills, or whatever is necessary if they want to make more money." And quit grousing about somebody else being successful.

[houndawg]

I don't believe any of the Republicans on this thread see the situation as a problem at all...
Let them eat cake - has been the general feedback

After our completely corrupt banking system gets bailed out by tax payers and then bonuses itself billions shortly thereafter surely this little gaff isn't an indication of anything other than a mild "**** off"

Since I'm a Libertarian I'm not in the group you mentioned but I'm guessing my thoughts are along the same line as most Republicans here. It's not "let them eat cake." First of all, the "typical" United States worker isn't starving. I'd guess the "typical" American worker has plenty eat, a fairly new vehicle (or multiple vehicles), at least one nice TV (probably flatscreen), and lots of other material things.

What I disagree with is there is some inherent evil about CEOs making a lot more than the "typical" worker does. CEOs make the money they do because that's what the market for their services calls for. And them making what they do doesn't make things worse for the "typical" worker. If median CEO pay had declined in 2010 in stead of increasing (assuming it really increased, since the methodology employed by USA Today is really bad) that would not mean the median salary of "typical" workers would've increased by any more than it did. The "typical" worker gets paid based on what the market sees as what he or she has to offer is worth.

It's not "let them eat cake." It's "let them improve themselves, acquire new skills, or whatever is necessary if they want to make more money." And quit grousing about somebody else being successful.

Of course it really increased, because they all made their bank regardless of the performance of their companies.

The grousing is about the obscene compensation they receive regardless of their job performance.

[JohnStOnge]

Of course it really increased, because they all made their bank regardless of the performance of their companies.

The grousing is about the obscene compensation they receive regardless of their job performance.

I suspect the median CEO compensation in 2010 was somewhat higher than it was in 2011. But whether that's true or not as well as whether the percent change was along the lines of that reported in that article are unknown because they just looked at CEOs who were in the same position both in 2009 and 2010.

In 2009 there were (presumably) 500 CEOs in place among S&P 500 companies. Some decided to leave for other positions and some were terminated for inadequate (or perceived inadequate) performance. Then in 2010 another set of 500 CEOs was in place. It's reasonable to think that some of them were S&P 500 CEOs for the first time (as was true in 2009). I think you can see that if you just look at the percent change among those who were in the same position both years you're probably going to bias the percent change in compensation estimate upwards.

You'd do the same thing if you looked at the change in "typical" worker pay by only looking at people who were in the same position both years. Yes, you'd lose some salary increases among those that got promoted. But you'd also be excluding the salaries of new workers. On balance I think you'd create a percent increase number that overstates the actual increase in the median salary of the "typical" worker.

Aside from that, it's a haphazard sample of the CEOs who were in place both years. It really is an entirely unreliable estimate.

[kalm]

I don't believe any of the Republicans on this thread see the situation as a problem at all...
Let them eat cake - has been the general feedback

After our completely corrupt banking system gets bailed out by tax payers and then bonuses itself billions shortly thereafter surely this little gaff isn't an indication of anything other than a mild "**** off"

Since I'm a Libertarian I'm not in the group you mentioned but I'm guessing my thoughts are along the same line as most Republicans here. It's not "let them eat cake." First of all, the "typical" United States worker isn't starving. I'd guess the "typical" American worker has plenty eat, a fairly new vehicle (or multiple vehicles), at least one nice TV (probably flatscreen), and lots of other material things.

What I disagree with is there is some inherent evil about CEOs making a lot more than the "typical" worker does. CEOs make the money they do because that's what the market for their services calls for. And them making what they do doesn't make things worse for the "typical" worker. If median CEO pay had declined in 2010 in stead of increasing (assuming it really increased, since the methodology employed by USA Today is really bad) that would not mean the median salary of "typical" workers would've increased by any more than it did. The "typical" worker gets paid based on what the market sees as what he or she has to offer is worth.

It's not "let them eat cake." It's "let them improve themselves, acquire new skills, or whatever is necessary if they want to make more money." And quit grousing about somebody else being successful.

There's nothing evil about this just like there's nothing evil about outsourcing, or tax avoidance. Oh, and worker productivity has steadily increased over the past 30 years while wages remained stagnant. The workers who have been fortunate enough to keep their jobs are experiencing greater work loads with less support. Redistribution of wealth upwards and the CEO's are getting their just rewards.

[JohnStOnge]

[/quote]There's nothing evil about this just like there's nothing evil about outsourcing, or tax avoidance. Oh, and worker productivity has steadily increased over the past 30 years while wages remained stagnant. The workers who have been fortunate enough to keep their jobs are experiencing greater work loads with less support. Redistribution of wealth upwards and the CEO's are getting their just rewards.[/quote]

I'm guessing technology has been a factor in increased worker productivity. And we've been through the redistribution thing before. The existence of the personal computer alone means one person can do a lot more of certain types of work in a given time than the same person could've done 30 years ago. Also, the fact that the "top" of the wealth and/or income distribution today has a higher percentage of the total wealth and/or income than it did 30 years ago does not mean that the rest of the wealth and/or income distribution has less wealth and/or income than it did 30 years ago.

Same old same old. The total wealth and income are not fixed quantities so that one person having more than they used to means another person (or set of people) has to have less. In this instance, CEOs getting a larger percent increase than "typical" workers did does not mean "typical" workers got less of an increase than they would have if CEO incomes had increased by less, stayed the same, or declined. "Typical" workers got what people who wanted their services felt their services were worth.

[kalm]

There's nothing evil about this just like there's nothing evil about outsourcing, or tax avoidance. Oh, and worker productivity has steadily increased over the past 30 years while wages remained stagnant. The workers who have been fortunate enough to keep their jobs are experiencing greater work loads with less support. Redistribution of wealth upwards and the CEO's are getting their just rewards.[/quote]

I'm guessing technology has been a factor in increased worker productivity. And we've been through the redistribution thing before. The existence of the personal computer alone means one person can do a lot more of certain types of work in a given time than the same person could've done 30 years ago. Also, the fact that the "top" of the wealth and/or income distribution today has a higher percentage of the total wealth and/or income than it did 30 years ago does not mean that the rest of the wealth and/or income distribution has less wealth and/or income than it did 30 years ago.

Same old same old. The total wealth and income are not fixed quantities so that one person having more than they used to means another person (or set of people) has to have less. In this instance, CEOs getting a larger percent increase than "typical" workers did does not mean "typical" workers got less of an increase than they would have if CEO incomes had increased by less, stayed the same, or declined. "Typical" workers got what people who wanted their services felt their services were worth.[/quote]

What you're saying makes perfect sense if we operated within a free market economy.

[AZGrizFan]

From the article:

Median CEO pay in 2010 was $9.0 million, based on 158 Standard & Poor’s 500 index companies with the same CEO serving all of 2009 and 2010 that have reported CEO pay, according to the USA TODAY analysis of data from GovernanceMetrics based on proxies that have already been filed

There are all kinds of issues with that. That kind of "sampling" is not going to result in an unbiased estimate of what the median CEO salary is. Also, I think it possible that it would overestimate the increase in CEO pay and perhaps even create the impression that there was an increase when there was a decline.

Since the sample only includes CEOs who served in 2009 and were still serving as CEOs in 2010, it is possible that the estimate is biased upward. CEOs that were successful and rewarded may be over-represented. In fact, if I had to bet I would bet that is the case.

To get an estimate of median CEO compensation of S&P 500 companies one would have to take a probability sample (like random) of CEO compensation levels. You'd do that for 2009 and again for 2010 in order to estimate the increase in CEO compensation. Or you could just look at every company and it would be reality rather than an estimate.

These guys took this hapazard, probably biased sample of CEO pay to derive an estimate they then compared to an estimate of "worker" pay dervied by the Bureau of Labor Statistics from probability sampling.

They should never have even gone through the exercise. Thanks again, media, for creating yet another false impression.

Even funnier is they base their entire argument on the pay of 158 people.

[death dealer]

I don't really care either way. It in no way effects my company. In our system, payscale is very simple. In our particular industry on a national average manpower costs as a percentage of overhead is 20%. So at the end of every quarter, we figure out what the profit was for the quarter, I take 80% of it, they get 20% of it. That way everyone gets their fair share. Thus, if my pay goes up, so does their's by a similar ratio. Simple.

[AZGrizFan]

I don't really care either way. It in no way effects my company. In our system, payscale is very simple. In our particular industry on a national average manpower costs as a percentage of overhead is 20%. So at the end of every quarter, we figure out what the profit was for the quarter, I take 80% of it, they get 20% of it. That way everyone gets their fair share. Thus, if my pay goes up, so does their's by a similar ratio. Simple.

Seems simple, until you realize that your TAXES go up by a much higher, and very dissimilar ratio than theirs do.

[death dealer]

I don't really care either way. It in no way effects my company. In our system, payscale is very simple. In our particular industry on a national average manpower costs as a percentage of overhead is 20%. So at the end of every quarter, we figure out what the profit was for the quarter, I take 80% of it, they get 20% of it. That way everyone gets their fair share. Thus, if my pay goes up, so does their's by a similar ratio. Simple.

Seems simple, until you realize that your TAXES go up by a much higher, and very dissimilar ratio than theirs do.

Not true at all AZ. I am already in the highest tax bracket therefore I can't increase any higher. I certainly pay vastly more in taxes than any of them do, but I also get lots of benies that come along with being the boss. All of my insurance is paid for by company. As an operating officer and majority stock holder, I get to partake in the higher contribution and matching side of our 401k package. I get my own-occ disability paid for by the company. Not to mention I can't be fired, disciplined, or anything else I don't like by anyone except myself. I can fire each and every one of them at any time I like for any reason I want (not that I would ever do that because they are all like my children and I wouldn't do that to them...but if they piss me off, I could ). It's good to be King. Do CEO's deserve the pay they get? Does it really matter? I don't know and don't care. Can anyone except the BOD do anything about it? No.

No doubt, life is a bitch for some people. They are by and large (with a few rare exceptions near the very top and the very bottom, and in cases of physical and mental disability) where they deserve to be in life based upon their own actions and efforts, at least in Western society that is. I am not discounting luck of birth and luck of circumstance, but even accounting for these, losers will usually end up on the downward slide and winners will find a way to move upward on the ladder. Quality people will never settle for less, they will always strive for more. If you find yourself constantly on the losing side of the equation, it's probably you.

[Chizzang]

I don't really care either way. It in no way effects my company. In our system, payscale is very simple. In our particular industry on a national average manpower costs as a percentage of overhead is 20%. So at the end of every quarter, we figure out what the profit was for the quarter, I take 80% of it, they get 20% of it. That way everyone gets their fair share. Thus, if my pay goes up, so does their's by a similar ratio. Simple.

Seems simple, until you realize that your TAXES go up by a much higher, and very dissimilar ratio than theirs do.

Come on AZ... really..?


10% $0 – $8,375
15% $8,376 – $34,000
25% $34,001 – $82,400
28% $82,401 – $171,850
33% $171,851 – $373,650
35% $373,651+


Cry me a river

[death dealer]

Seems simple, until you realize that your TAXES go up by a much higher, and very dissimilar ratio than theirs do.

Come on AZ... really..?


10% $0 – $8,375
15% $8,376 – $34,000
25% $34,001 – $82,400
28% $82,401 – $171,850
33% $171,851 – $373,650
35% $373,651+


Cry me a river

And I can guarantee you by the time my accountant is finished, I don't pay nearly 35% of my income, and every single thing he does is legal and within the norm. He is very good at finding me legal but creative ways to cut my tax bill. I don't pay him all of that money for nothing. And he earns every penny of it.

[YoUDeeMan]

I don't really care either way. It in no way effects my company. In our system, payscale is very simple. In our particular industry on a national average manpower costs as a percentage of overhead is 20%. So at the end of every quarter, we figure out what the profit was for the quarter, I take 80% of it, they get 20% of it. That way everyone gets their fair share. Thus, if my pay goes up, so does their's by a similar ratio. Simple.

So, if you have 20 employees, they each get 1% of the profits while you get 80%. Oh, the humanity!

You should be ashamed of yourself for being successful. Say ten Hail Mary's and tithe 10% of your earnings to the church and you'll be forgiven.

Make that 30% of your earnings...you've been a selfish, bad, bad, boy.

[YoUDeeMan]

No doubt, life is a bitch for some people. They are by and large (with a few rare exceptions near the very top and the very bottom, and in cases of physical and mental disability) where they deserve to be in life based upon their own actions and efforts, at least in Western society that is. I am not discounting luck of birth and luck of circumstance, but even accounting for these, losers will usually end up on the downward slide and winners will find a way to move upward on the ladder. Quality people will never settle for less, they will always strive for more. If you find yourself constantly on the losing side of the equation, it's probably you.

Once again, DD nails it.

Most people would rather watch 3 hours of TV each night than use that time to learn a new language or a new skill that could result in improving their lot in life.

In this country, anyone can be successful. With the rare exceptions already mentioned, those who aren't happy with their success have only to look in the mirror to see why.

That simple truth is lost on most folks.

[Chizzang]

Come on AZ... really..?


10% $0 – $8,375
15% $8,376 – $34,000
25% $34,001 – $82,400
28% $82,401 – $171,850
33% $171,851 – $373,650
35% $373,651+


Cry me a river

And I can guarantee you by the time my accountant is finished, I don't pay nearly 35% of my income, and every single thing he does is legal and within the norm. He is very good at finding me legal but creative ways to cut my tax bill. I don't pay him all of that money for nothing. And he earns every penny of it.

Right..!!!
I don't know anybody who pays 35% tax - Not one person

Listening to a highly paid American complain about taxation is really a joke - but I guess somebody has to keep up the ruse and carry the deception forward....

[Baldy]

And I can guarantee you by the time my accountant is finished, I don't pay nearly 35% of my income, and every single thing he does is legal and within the norm. He is very good at finding me legal but creative ways to cut my tax bill. I don't pay him all of that money for nothing. And he earns every penny of it.

Right..!!!
I don't know anybody who pays 35% tax - Not one person

Listening to a highly paid American complain about taxation is really a joke - but I guess somebody has to keep up the ruse and carry the deception forward....

Again, it's not about the 35%. It's about the costs of having to comply with the tax code. From the highly paid corporate tax attorneys and tax accounting experts that make up entire divisions of major corporations, to the highly paid CPA's that business owners like deathdealer have to pay just to comply with the burdensome tax code. If you combined the taxes and the compliance costs, there is no doubt that the top tier (on average) pays way more than 35%.

[JohnStOnge]

Listening to a highly paid American complain about taxation is really a joke

Really? Why should a "highly paid" American contribute more towards the running of the country than anybody else does? Why is it that we have developed this mindset that somebody who is successful should be penalized while someone who is unsuccessful should be rewarded?

I'll go ahead and invoke Jesse Helms even though it will be unpopular in order to give him credit for what I'm about to say. He once wrote that we have developed a governmental system of rewarding indolence and penalizing success. And we have.

I don't see how anybody can deny that.

[Skjellyfetti]

Why should a "highly paid" American contribute more towards the running of the country than anybody else does?

The necessaries of life occasion the great expense of the poor. They find it difficult to get food, and the greater part of their little revenue is spent in getting it. The luxuries and vanities of life occasion the principal expense of the rich, and a magnificent house embellishes and sets off to the best advantage all the other luxuries and vanities which they possess. A tax upon house-rents, therefore, would in general fall heaviest upon the rich; and in this sort of inequality there would not, perhaps, be anything very unreasonable. It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.

-Adam Smith, The Wealth of Nations, 1776

[JohnStOnge]

Sorry, Sky, but that's not a good argument. That is not a good reason for why one person should pay more than another.

It is an emotional argument. Not a good argument.

When I go to the grocery counter to buy bread, do they ask me if I am rich or poor? Do they assess my income and charge me more for bread if I make more than average and less if I make less than average?

The "fair" thing to do would be to charge each person equally for what it costs to run the country.

[JohnStOnge]

It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.

Yes, it is unreasonable. Just like it's unreasonable to ask one person to pay more for a bottle of Coke than another because the first person makes more money.

It's popular. But it's not reasonable.

[Baldy]

Why should a "highly paid" American contribute more towards the running of the country than anybody else does?

The necessaries of life occasion the great expense of the poor. They find it difficult to get food, and the greater part of their little revenue is spent in getting it. The luxuries and vanities of life occasion the principal expense of the rich, and a magnificent house embellishes and sets off to the best advantage all the other luxuries and vanities which they possess. A tax upon house-rents, therefore, would in general fall heaviest upon the rich; and in this sort of inequality there would not, perhaps, be anything very unreasonable. It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.

-Adam Smith, The Wealth of Nations, 1776

Nice cherry picking, AJ. Now read, understand, and agree with the other 1263 pages of "The Wealth of Nations" and maybe we'll have something to share.

[Skjellyfetti]

1200 pages? Do you have to read the large-print version, old man? My copy is about 450.

[Baldy]

1200 pages? Do you have to read the large-print version, old man? My copy is about 450.

Figures. You must have the "Wealth of Nations for Dummies" version.

In it's original unabridged version, and depending on the copy it's well over 1200 pages. Take out the indexes and introductions, it's 900 or so pages of fresh capitalistic free market meat.

[Chizzang]

Right..!!!
I don't know anybody who pays 35% tax - Not one person

Listening to a highly paid American complain about taxation is really a joke - but I guess somebody has to keep up the ruse and carry the deception forward....

Again, it's not about the 35%. It's about the costs of having to comply with the tax code. From the highly paid corporate tax attorneys and tax accounting experts that make up entire divisions of major corporations, to the highly paid CPA's that business owners like deathdealer have to pay just to comply with the burdensome tax code. If you combined the taxes and the compliance costs, there is no doubt that the top tier (on average) pays way more than 35%.

That's sounds like complaining about hand made 24 carat golden underwear being so uncomfortable...