Golly, gee whiz! Oh my gosh!! If employees had their compensation tied to the company's stock price, wouldn't that make the company an "employee-owned corporation"? What a radical idea!! Oh, wait. That's been tried, and it works. Or companies could simply award stock to all employees as part of their compensation package. Lots of employees of Sears became quite wealthy that way. Years ago my wife worked briefly for a company that had a plan to make it easy for employees to buy company stock through payroll deductions, so she bought a few dozen shares during the year or so that she worked there. We still have the shares. Through mergers and acquisitions those shares have multiplied through reinvestment of dividends are now worth thousands of dollars. And this initial stock investment prompted us to invest more of our savings in stocks once we saw how the value of her initial investment grew. Make every worker an owner. That's called "capitalism", I believe.
As you pointed out, CEOs are incentivized to maximize profits, and compensation to shareholders, above anything else. Especially now that they don't need to pretend to embrace DEI goals. The further weakening of EPA regulations has been another boon to profits.
This is part of the movement away from treating employees as valued parts of the team, and providing fair wage/salary and benefits packages that reflected this as a priority.
I remember when 401Ks began replacing defined benefits pension plans. That, and the 1980s greenmail and other hostile corporate takeovers, which targeted pension plans, demonstrated the shift towards maximum profits.
Oh, and Milton Friedman's shareholder theory that it was the duty of CEOs to, among other thing, break laws in pursuit of increased profits - if the resulting fines would be less than what was illegally obtained.
Friedman's ideas are now dominant via the Chicago School of Economics. Despite the lack of empirical evidence; almost entirely argument by assertion and little more than a hatred of the New Deal and Keynes. His views best explained as why he supported the Pinochet dictatorship in Chile: "democracy interferes with market efficiency."
The pay of American CEOs is obscene. We should have a system somewhat like that of Japan, where the pay of the top executive cannot exceed more than a certain percentage of the lowest paid worker in the company. CEOs too often demonstrate the Peter Principle, and are not the real movers behind company success. It's time to support unions again, and make the workers--the REAL reason a company is successful, the focus of pay and benefits.
Yes, Jim. Except I have long objected to the math of using percentages, since adding a percentage of a high wage to it, vs. the same percentage of a low wage, increases the difference between the two rates of pay every time it's done. How about if $20,000 annual increase at the top = $20,000 annual increase for all? Aren't all workers' costs and needs theoretically the same?
Rewarding corporate CEOs is okay if the rank and file is also rewarded.Boosting one person's salary and neglecting the workers is a formula for disaster that needs to be corrected.
Now add the irrelevant millions of workers hit with mass layoffs, done by corporations to finance stock buybacks. Which mean no $ for new products or jobs. Which artificially drive up the price of stock and benefit only CEOs (stock options are a large piece of their compensation,) banksters, and Wall St. manipulators. Never mind the public $$$ that went into bail-outs. Or govt. contracts.
But sure, buy into the bizarre belief that massive private greed adds up to public good and the best of all possible worlds.
Oh, yeah. I couldn't retire based on my 401k. I closed that out as soon as I left the company. That money went into a savings account. My Navy retirement and Social Security are keeping us afloat for now. Who knows how long that will last with the corporate scammers sucking up the $.
Golly, gee whiz! Oh my gosh!! If employees had their compensation tied to the company's stock price, wouldn't that make the company an "employee-owned corporation"? What a radical idea!! Oh, wait. That's been tried, and it works. Or companies could simply award stock to all employees as part of their compensation package. Lots of employees of Sears became quite wealthy that way. Years ago my wife worked briefly for a company that had a plan to make it easy for employees to buy company stock through payroll deductions, so she bought a few dozen shares during the year or so that she worked there. We still have the shares. Through mergers and acquisitions those shares have multiplied through reinvestment of dividends are now worth thousands of dollars. And this initial stock investment prompted us to invest more of our savings in stocks once we saw how the value of her initial investment grew. Make every worker an owner. That's called "capitalism", I believe.
As you pointed out, CEOs are incentivized to maximize profits, and compensation to shareholders, above anything else. Especially now that they don't need to pretend to embrace DEI goals. The further weakening of EPA regulations has been another boon to profits.
This is part of the movement away from treating employees as valued parts of the team, and providing fair wage/salary and benefits packages that reflected this as a priority.
I remember when 401Ks began replacing defined benefits pension plans. That, and the 1980s greenmail and other hostile corporate takeovers, which targeted pension plans, demonstrated the shift towards maximum profits.
Oh, and Milton Friedman's shareholder theory that it was the duty of CEOs to, among other thing, break laws in pursuit of increased profits - if the resulting fines would be less than what was illegally obtained.
Friedman's ideas are now dominant via the Chicago School of Economics. Despite the lack of empirical evidence; almost entirely argument by assertion and little more than a hatred of the New Deal and Keynes. His views best explained as why he supported the Pinochet dictatorship in Chile: "democracy interferes with market efficiency."
The pay of American CEOs is obscene. We should have a system somewhat like that of Japan, where the pay of the top executive cannot exceed more than a certain percentage of the lowest paid worker in the company. CEOs too often demonstrate the Peter Principle, and are not the real movers behind company success. It's time to support unions again, and make the workers--the REAL reason a company is successful, the focus of pay and benefits.
Well stated.
Yes, Jim. Except I have long objected to the math of using percentages, since adding a percentage of a high wage to it, vs. the same percentage of a low wage, increases the difference between the two rates of pay every time it's done. How about if $20,000 annual increase at the top = $20,000 annual increase for all? Aren't all workers' costs and needs theoretically the same?
Yes, the gap needs to be frozen or decreased, not increased.
We say: great idea, now how do we implement it?
Rewarding corporate CEOs is okay if the rank and file is also rewarded.Boosting one person's salary and neglecting the workers is a formula for disaster that needs to be corrected.
When the company falters or fails, the CEOs escape just fine.
Now add the irrelevant millions of workers hit with mass layoffs, done by corporations to finance stock buybacks. Which mean no $ for new products or jobs. Which artificially drive up the price of stock and benefit only CEOs (stock options are a large piece of their compensation,) banksters, and Wall St. manipulators. Never mind the public $$$ that went into bail-outs. Or govt. contracts.
But sure, buy into the bizarre belief that massive private greed adds up to public good and the best of all possible worlds.
Oh, yeah. I couldn't retire based on my 401k. I closed that out as soon as I left the company. That money went into a savings account. My Navy retirement and Social Security are keeping us afloat for now. Who knows how long that will last with the corporate scammers sucking up the $.
if only
Why would CEOS change their goals now, we are now a country of Oligarchs and heading towards a complete Autocracy, or worse.
Right on!
Fat chance!
Yep!