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Two hypotheses for why US CEO pay is so high
Sources:
Location of topic origin - click here
Location of rebuttal origin - click here
To me that seemed like a compelling, but daft question and one I had never considered. Surely, this had been hashed long before my chance encounter with the concept, so off to the Interwebs I went.
I rephrased the concept, if CEOs are obliged to their shareholders, then maximum amount of profit should go to the shareholders thus creating reins for CEO compensations. I Googled “ceo pay ratio” images. Surprising enough, it appeared that, at least in USAmerica, CEO wages seemed exploitative of the very companies they were entrusted with.
I continued, I Googled the direct question, “why is there no maximum wage”. Wikipedia had an entry. Upon reading the Wikipeadia entry on Maximum wage, it appeared as if this was conceptually limited to hourly employees.
In England, theStatute of Artificers 1563
American colonies in the 17th century
In the earlySoviet Union,
In 1942, duringWorld War II,
Swedenin the 1960s
and In professional sports.
During my primary research I chose realitybase.org as my starting point. I went back to realitybase.org to qualify the writer. Clearly he is knowledgeable enough to yield a good consultation reference:
Roger Chittum.
I have retired as a business executive and business lawyer.
My interest in energy issues stems from my tenure as an officer of an energy company, The Oil Shale Corporation (later Tosco Corporation and now part of Conoco Phillips), from 1972 to 1983. Those were thefun-filled years of the first post-war oil crisis and synfuels boom, ending with thedramatic crash of oil prices and refining margins in 1982.
My interest in free market fundamentalism, trade, globalization, and other economic issues was enhanced by my experience as an officer and director of a textile company, Crown Crafts, Inc., from 1992 to 2000. My job was one of the thousands of textile industry jobs shipped to China after a brief NAFTA-facilitated stopover in Mexico.
My interest in human rights and civil liberties stems from the Civil Rights Movement.
I graduated from the Stanford Law School, where I was an editor of the Law Review. Before that I was a National Merit Scholar at the College of Wooster where I majored in chemistry. I did graduate work in chemistry at Case Western Reserve and worked as a chemist at Sohio (now part of BP) before opting for law school.
I'm a voracious reader of public policy journals and blogs. My taste in books since retirement has run almost exclusively to non-fiction. I am reading political economy books from Adam Smith forward, about The Enlightenment and its influence on government in the United States, and about the history of the philosophy of science.
I live in Los Angeles, California.
The usual defense of high US CEO pay is that it is set by market forces. If that's true, doesn't that mean the US has a relative shortage of CEO talent compared to the other advanced countries? (A short supply of qualified candidates has driven up prices more in the US than in other countries.) On the other hand, if US CEO talent is relatively as abundant as in other countries, doesn't that mean the US CEO pay market has failed and should be fixed to eliminate inefficiencies?
Update on Wednesday, January 28, 2009 at 10:24AM bySkeptic
This post is meant to show that the US CEO pay market is probably broken. That doesn't mean I have any enthusiasm for government capping CEO pay. Why? Because I think excessive CEO pay is a symptom of a larger corporate governance problem, I don't want to be distracted by palliative care for a symptom. Let's get at the core problem, whatever it is.
Highlights mine.
What is the problem? Not only in CEO pay, but why the outlandish military expenditures? Are most of the military expenditures going to compensate conglomerate CEOs?
Sources:
Location of topic origin - click here
Location of rebuttal origin - click here
To me that seemed like a compelling, but daft question and one I had never considered. Surely, this had been hashed long before my chance encounter with the concept, so off to the Interwebs I went.
I rephrased the concept, if CEOs are obliged to their shareholders, then maximum amount of profit should go to the shareholders thus creating reins for CEO compensations. I Googled “ceo pay ratio” images. Surprising enough, it appeared that, at least in USAmerica, CEO wages seemed exploitative of the very companies they were entrusted with.
I continued, I Googled the direct question, “why is there no maximum wage”. Wikipedia had an entry. Upon reading the Wikipeadia entry on Maximum wage, it appeared as if this was conceptually limited to hourly employees.
In England, theStatute of Artificers 1563
American colonies in the 17th century
In the earlySoviet Union,
In 1942, duringWorld War II,
Swedenin the 1960s
and In professional sports.
During my primary research I chose realitybase.org as my starting point. I went back to realitybase.org to qualify the writer. Clearly he is knowledgeable enough to yield a good consultation reference:
Roger Chittum.
I have retired as a business executive and business lawyer.
My interest in energy issues stems from my tenure as an officer of an energy company, The Oil Shale Corporation (later Tosco Corporation and now part of Conoco Phillips), from 1972 to 1983. Those were thefun-filled years of the first post-war oil crisis and synfuels boom, ending with thedramatic crash of oil prices and refining margins in 1982.
My interest in free market fundamentalism, trade, globalization, and other economic issues was enhanced by my experience as an officer and director of a textile company, Crown Crafts, Inc., from 1992 to 2000. My job was one of the thousands of textile industry jobs shipped to China after a brief NAFTA-facilitated stopover in Mexico.
My interest in human rights and civil liberties stems from the Civil Rights Movement.
I graduated from the Stanford Law School, where I was an editor of the Law Review. Before that I was a National Merit Scholar at the College of Wooster where I majored in chemistry. I did graduate work in chemistry at Case Western Reserve and worked as a chemist at Sohio (now part of BP) before opting for law school.
I'm a voracious reader of public policy journals and blogs. My taste in books since retirement has run almost exclusively to non-fiction. I am reading political economy books from Adam Smith forward, about The Enlightenment and its influence on government in the United States, and about the history of the philosophy of science.
I live in Los Angeles, California.
The usual defense of high US CEO pay is that it is set by market forces. If that's true, doesn't that mean the US has a relative shortage of CEO talent compared to the other advanced countries? (A short supply of qualified candidates has driven up prices more in the US than in other countries.) On the other hand, if US CEO talent is relatively as abundant as in other countries, doesn't that mean the US CEO pay market has failed and should be fixed to eliminate inefficiencies?
Update on Wednesday, January 28, 2009 at 10:24AM bySkeptic
This post is meant to show that the US CEO pay market is probably broken. That doesn't mean I have any enthusiasm for government capping CEO pay. Why? Because I think excessive CEO pay is a symptom of a larger corporate governance problem, I don't want to be distracted by palliative care for a symptom. Let's get at the core problem, whatever it is.
Highlights mine.
What is the problem? Not only in CEO pay, but why the outlandish military expenditures? Are most of the military expenditures going to compensate conglomerate CEOs?
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