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.
It's not about taking the CEO's pay and redistributing it, like some game of lotto.
The point is that the culture and structure of the company is geared towards rewarding the dickhead at the top, for squeezing their workers.
The companies don't see their workers as assets but instead as adversaires that are to be exploited and paid as little as possible, no matter the cost to quality, loyalty or morale.
Somehow there is no money for the workers, yet the car prices have exploded and the board makes shit loads of money....
The board makes money? Isn't that a conflict of interest? What are the board, and c Suite paid? It's not just the CEO here...
I click for the outrage, but stay for the rational discussion.
While the CEO salary is often the talking point, the bigger number is often the stock buybacks.
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.
Lol so even higher than stated in the pic
Another thing about automotive (and probably most industries) is that large portions of the labor are contracted through agencies. Even most entry level engineers are contract now. So that figure doesn't include many of the lower paid positions in these facilities.
Stock awards aren't exactly normal compensation, though. If everyone got equal stock in the company, everyone would be incentivized to work towards the company's success.
So why are most employees given salary or hourly pay without stock rewards? Shouldn't the company want to incentivize employees for the company's success? I understand there are a lot of people who defend their companies or corporations without much investment incentives given. I still don't see why it is not a common benefit to give.
Do you know who Robert Reich is? I don't know where he got these numbers either, but there's pretty much zero chance that a former US secretary of labor and current Berkeley professor just pulled them out of his ass. Like his politics or not, the guy does know what he's talking about.
I'm a fan of Robert Reich, I just meant it as a preface for why my numbers were different.
Who the hell is Stellantis? Checks web
Who the hell though renaming Chrysler to a misspelling of a Paradox 5X space game was a good marketing move?
Have you considered that the CEO is working 300 times harder than the worker you are comparing them to??
Yeah, they work an entire year for every one normie day.
Yeah I considered it.. But then saw that a CEO can be a CEO of multiple businesses and I realized that it isn't true.
Oh they are also in the board for other businesses as well. You ever wonder why a while industry will make the same sweeping changes or all have the same pay? It's because they all "work" together on each other's company's boards. The IT company I worked for had three "competitors" CEOs on the board, along with CEO from a fast food company and one from a bank. These people are the true power in capitalism. Not the elected officials. Me and a coworker did the math in how much of the US work force our board had direct/indirect control over. It was 45% of the IT Management field. 10% of the fast food. And about 4% of banking. 5 people not counting our CEO shouldn't be that interconnected when they have that much power.
you forgot the /s lol
The /s is that entire account. It's satirical 😁
Another MrBusinessMan banger™.
Lol, how is that even possible
Hard for mere mortals to fathom the abilities of a top tier CEO.
You don't get paid based on how hard you work. You might get bonuses based on productivity, but productivity is not always tied to how hard you work.
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.
CEO pay, stock buybacks, likely a large company savings, all the C-suite executives, and more im sure.
One of the UAW's demands is $2 per employee for every 1 million in stock buybacks.
likely a large company saving
This is what should be talked about. Cash-on-hand is public knowledge of publicly traded companies.
Ford has north of $40B in the bank.
Now do that for the president, vp, directors, and board, hell the whole Suite is over payed, not just the ceo
And your point is? Obviously Reich knows this. He's talking about the way these companies are set up to funnel ridiculously disproportionate salaries to those at the top, he's not literally arguing that redistributing CEO pay will somehow magically solve the problem.
Your point is accurate, it's just irrelevant nitpicking at the cost of grasping what's really being said.
While the OP is about CEO to lowest employee pay, they are hardly the only overpaid people.
Even if you take the whole executive suite it isn't going to amount to much. The real areas to focus on are the perks, the projects that get handled by "consultants" that were ex-employees who did that same job for less before etc. If they really want to pay these workers it's going to make more sense togo after other things in addition to high pay.
CEO's are only good for one thing and one thing only. A balanced diet.
They're mostly fat. Make sure to also eat plenty of veggies
You haven't seen seen member of United Russia. Those are whales compared to sticks.
"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.
Meanwhile small IT buisness: 1-2
This is every corporation in America.
It's gross
If you gave the Ford CEOs income evenly among all the employees, it would be an extra $200 a year.
CEO-to-worker pay ratio isn't a particularly useful metric but it does a good job making people rightfully angry.
Maybe the point, which you're missing, is that nobody should be making that much money at a company.
So you're saying we'd only need to sacrifice the pay of one guy to get free or mostly-paid-off utilities or groceries or gas for an entire month for hundreds of thousands of people? Seems like a worthy sacrifice.
I don't think @[email protected] is saying CEOs should be defended, but rather that their income isn't a good measure for the rate of exploitation, because a great part of the companies profits that aren't retained are divided among the shareholders, that is arguably where the greatest theft lies.
Reich also went out his way to screw the working class. Citing him just shows someone is citing someone that is saying what they want to hear.
He went out of his way to screw people when he was in power.
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!
3- use all thatoney for universal healthcare
Fun fact, we could have this right now just by paying what the UK pays in taxes at an individual level and most people and businesses would make more money.
Your employer generally covers 77-83% of your insurance costs, and insurance costs rise faster than wages or profits.
If your net expenditures on insurance+cost of service+cost of prescriptions (and, presumably, also the cost of catastrophic care, should it happen) is more than 18% of your income minus what your employer pays, because your insurance cost is part of your total comp, you make more under universal healthcare.
At that tax rate the gov could just pay for everything and leave the rest of the system (largely) private, only using it's market power to negotiate and standardize pricing, and everyone makes more money and has better coverage.
5- companies care size limited. Canoe have more than 1000-1500 employees or they’ll be forcibly split
This is a ridiculous and pointless suggestion.
Point number 1 would only increase dividends to shareholders, not employee pay...
so, let's fire the CEO and split his salary evenly. Let's say Ford has 10k employees. And the CEO earns 365 of an average. Now, 365/10k=3.5%.
Alright, now everyone got a 3.5% raise and the company doesn't have a CEO. Seems like a massive win! /s
Yeah cause the ceo is definitely the only higher up earning a disproportionate wage
Turning Ford into coop will do a lot of good things. Sadly, it won't happen.
Also a bad thing: the coop still needs a CEO... but now all the financial risk falls onto the workers, who are too busy... well, doing actual work... to attend board meetings or take part in power struggles and politicizing... leaving the coop in the hands of a few with very little stake in how it does in the future.
(source: I've seen a coop split from a business, they first got swindled out of ALL their capital by a crooked CEO and friends, because nobody else cared about checking the books... then refinanced by asking all workers to chip in from their savings... and shortly after, went down completely, leaving everyone without their investment, job, or savings)
Except it's worse than that. GM paid their CEO 22 million in 2021 which broken across the employees would equate to an extra $173-4 USD that year or $2-3 per week.
You are more than welcomed to become a CEO. Not a fun job.
I personally know two former board members at Nike --because my company did a few million dollars worth of work on their mansion, not because I'm anyone important-- and from what I can tell, their jobs and lives were/are pretty fucking awesome. Just imagine the most glamorous and luxurious lifestyle you can think of, but without the drawback of being publicly recognizable, and that's pretty much it.
🤣 Wat
Lol CEOs just sit in board meetings with other CEOs from other companies and just pass down the latest how to surprise the workers rulings. While saying it's a family
