I decided to look up some numbers and do some math.
So the CEO earns 362x the average employee at GM. Basically if they took the CEO’s pay and redidsteubuted it, they could double the pay of 362 lucky workers at GM. Or take twice as many workers as that and increase their pay by 50%.
But how many workers are there and how far will this CEO’s pay go?
GM has 167,000 employees. Collectively, their pay totals 167,000x the salary of the average employee. Very basic.
Now let’s add the CEO’s pay to that sum: we are now up to a sum of money equal to 167,362x the average salary.
And if we distribute that amongst all the employees, that’s:
167,362/167,000
Get out your calculator and you’ll see that this would fund a two-tenths of one percent raise for all employees. That’s 0.002%
The pay is very unfair. But we should be realistic that the CEO is one person and their fat salary doesn’t actually go very far in terms of worker raises.
Let’s do the math in reverse: to give all GM employees just a 2% raise would cost 9.2x the CEO’s salary. And the workers want a 40% raise over 4 years.
I hope they get it. I believe that money is there and currently going to the entire executive layer, the board, and shareholders. But when anyone tries to oversimplify and it make it all about the CEO’s salary, I cringe a bit because it really isn’t that meaningful a sum of money, unfair as it may be.
We should be looking at profit or better EBITDA and showing how easily it could be used to raise worker pay.
Did basic digging, no idea where the tweet's numbers come from.
Ford CEO Jim Farley received ~$21mil in total compensation in 2022, mostly in stock awards. Source
Average salary of Ford employee: ~$67k a year, derived from $37k in the bottom 10th percentile and $120k in the top 90th. Source
Which gives a ratio more like 313 to 1.
365x the average workers salary divided by 150,000 workers.
Like the math is written out.
The company can pay more for sure, but Reich should know enough to look at these publicly traded companies' cash-on-hand.
As an example:
According to Ford's latest financial reports the company has $42.82 B in cash and cash equivalents.
CEO pay needs a cap but not because workers are paid less. CEO pay is not that big a drain on these companies' resources.
If we took the 29 million the GM CEO was paid in 2021 and broke that up equally across the roughly 167,000 employees they each get an extra $173-174 dollars for the year.
They are getting paid too much but their salary isn't enough to correct the shortages in worker pay. There are other places that need to be looked at in addition to CEO pay to find the money workers deserve.
"We don't have the money, because I want the money."
I blame the board of directors and shareholders. The ceo is hired by the board the make money for the shareholders. I think shareholders need to realize their ROI is lower than they think it is, because of the externalities that are not reflected in balance sheets and income statements. But of course that'll never happen until something calamitous causes it to.
They could if any of them made decent products. Out of all of the products that all of those companies offer, the only things worth half a shit are Ford's F-150 and GM's Vortec engine line-up.
This is every corporation in America.
Meanwhile small IT buisness: 1-2
It's gross
1- make by law that the highest paid employee (or contractor) including bonuses and everything cannot earn more than 10 times as the lowest paid
2- tax. Tax income for the lowest incomes at, say, 20% and then let it rise in steps, each step part will be taxed higher, until it hits a point where anything above a certain level is taxed 100%. You earn more than that? Cool you're helping the government a great deal!
3- use all thatoney for universal healthcare, universal housing (if you can't buy a house, you'll get one), universal income. Also infrastructure
While we're at it
4- change political system from "winner takes all" to "each candidate with over 1% of the votes will get exactly that % of power but nobody gets more than 10% of power"
5- companies care size limited. Canoe have more than 1000-1500 employees or they'll be forcibly split
6- redesign cities for people, not cars. All cities should be walkable and cyclable and have great public transportation. Cars won't be prohibited but taxed higher. Nobody in cities wants cars anymore because they don't need them
Cities and the world in general would be NICE!
