23 Nov 13
No, not the book of Equality. It's an initiative in Switzerland to limit CEO pay to 12 times that of the lowest paid worker in a company. I say it's only common sense to have such a limit on runaway inequality. The days when CEOs style themselves as kings of their private fiefdoms, and the workers are treated as peasants, has to end. And 1:12 is a good place to start.
http://www.npr.org/blogs/parallels/2013/11/22/246678622/swiss-inequality-is-growing-would-curbing-exec-pay-matter
23 Nov 13
Originally posted by rwingettSounds great but I think I agree with KazetNagorra that tax is probably the more viable solution.
No, not the book of Equality. It's an initiative in Switzerland to limit CEO pay to 12 times that of the lowest paid worker in a company. I say it's only common sense to have such a limit on runaway inequality. The days when CEOs style themselves as kings of their private fiefdoms, and the workers are treated as peasants, has to end. And 1:12 is a good place to start.
I must add that the Swiss are well known for assisting in tax avoidance. In addition to swiss banks being used to hide funds, I believe the company most responsible for stealing Zambia's copper is based in Switzerland and is assisted by Swiss laws favourable to them.
23 Nov 13
Originally posted by twhiteheadBen and Jerry's ice cream started by a couple of hippies tried to limit the CEO salary, it didn't work because people making multimillion dollar decisions well command salaries that can not stand to be limited in this way. You lefty types think running businesses at that level is easy, it's not, and there is a limited pool of people to choose from that are capable of doing the job well.
Sounds great but I think I agree with KazetNagorra that tax is probably the more viable solution.
I must add that the Swiss are well known for assisting in tax avoidance. In addition to swiss banks being used to hide funds, I believe the company most responsible for stealing Zambia's copper is based in Switzerland and is assisted by Swiss laws favourable to them.
All this does is drive the dealings into the back room and salaries will be made up by other benefits.
23 Nov 13
Originally posted by rwingettIt ignores the reality that a CEO's salary as determined in the free market is more than 12 times the lowest level worker. To force firms to outsource low level jobs or to change corpoarate structure so the CEO can be employed by a different corporation than other workers is just silly.
No, not the book of Equality. It's an initiative in Switzerland to limit CEO pay to 12 times that of the lowest paid worker in a company. I say it's only common sense to have such a limit on runaway inequality. The days when CEOs style themselves as kings of their private fiefdoms, and the workers are treated as peasants, has to end. And 1:12 is a good plac ...[text shortened]... g/blogs/parallels/2013/11/22/246678622/swiss-inequality-is-growing-would-curbing-exec-pay-matter
23 Nov 13
Originally posted by WajomaThere are indeed not many people who excel at running businesses.
Ben and Jerry's ice cream started by a couple of hippies tried to limit the CEO salary, it didn't work because people making multimillion dollar decisions well command salaries that can not stand to be limited in this way. You lefty types think running businesses at that level is easy, it's not, and there is a limited pool of people to choose from that are c ...[text shortened]... is does is drive the dealings into the back room and salaries will be made up by other benefits.
Unfortunately, those people rarely get picked as CEOs.
24 Nov 13
Originally posted by quackquackYes, at the simplest level, why is it logical that government that can't run its own business will run everyone else's. Paying workers is based on the value of what they can do, not their needs or wants. Can there be a single ratio that expresses the difference?
It ignores the reality that a CEO's salary as determined in the free market is more than 12 times the lowest level worker. To force firms to outsource low level jobs or to change corpoarate structure so the CEO can be employed by a different corporation than other workers is just silly.
You rightly point out that corporations have many ways of getting around such nonsense, most of which tend to harm the low paid worker. Their work can be automated, farmed out to independent contractors, and in some cases eliminated altogether. Top level administrators can also be farmed out so that the ration is meaningless.
24 Nov 13
Originally posted by KazetNagorraI don't know if it is still the case, but in the '90s most American CEOs were CPAs. Corporate boards apparently believed understanding the books was the highest qualification of the CEO. While this is important, it may be even more important to have a vision of the companies mission, and how to use human capital, not things that bean counters do well. This doesn't constitute an argument that government can evaluate talent better.
There are indeed not many people who excel at running businesses.
Unfortunately, those people rarely get picked as CEOs.
24 Nov 13
Originally posted by rwingettA noble thought but I cannot see it working.
No, not the book of Equality. It's an initiative in Switzerland to limit CEO pay to 12 times that of the lowest paid worker in a company. I say it's only common sense to have such a limit on runaway inequality. The days when CEOs style themselves as kings of their private fiefdoms, and the workers are treated as peasants, has to end. And 1:12 is a good plac ...[text shortened]... g/blogs/parallels/2013/11/22/246678622/swiss-inequality-is-growing-would-curbing-exec-pay-matter
Firstly large industries who employ non-skilled manual workers and highly
qualified senior staff will be at a disadvantage because they naturally have
large pay differentials.
Secondly any company wishing to avoid the system would just sub-contract
out all the poorly paid jobs. Effectively you could have a company of just a few dozen senior employees and contractors doing everything.
I am in favour of systems which distribute company profits fairly. So
that workers can be paid the appropriate rate but success is shared throughout all employees. (Perkaps as percentage bonuses)
24 Nov 13
So nobody seems to think it would work. Probably because you've been told a thousand times that it will not work, and you've internalized that particular narrative. Well, it can work. And does. I will point to the example of the Mondragon Cooperatives again. From Wikipedia:
Wage regulation
At Mondragon, there are agreed-upon wage ratios between executive work and field or factory work which earns a minimum wage. These ratios range from 3:1 to 9:1 in different cooperatives and average 5:1. That is, the general manager of an average Mondragon cooperative earns 5 times as much as the theoretical minimum wage paid in his/her cooperative. In reality, this ratio is smaller because there are few Mondragon worker-owners that earn minimum wages, because most jobs are somewhat specialized and so are classified at higher wage levels. The wage ratio of a cooperative is decided periodically by its worker-owners through a democratic vote.
Compared to similar jobs at local industries, Mondragon wages are 30% or less at management levels[clarification needed] and equivalent for middle management, technical and professional levels. Lower wage levels are on average 13% higher than similar jobs at local businesses. Spain's progressive tax rate further reduces any disparity in pay.
And Mondragon isn't the only one. There are other corporations that operate by the same principle. Equal Exchange, a fair trade chocolate company, caps executive pay at 4:1 over that of the lowest paid worker.
24 Nov 13
Originally posted by KazetNagorraThis way a small business owner who has worked many hours to build his business and finally starts getting financial reward for it now gets it taken from him. How do you think it is the place of government to tax the incentive out of entrepreneurship?
Such a measure would probably be good for the productivity and profitability of companies, but I'm not sure it's the place of government to tell companies how much they can pay their employees. It's probably more effective to just make the tax brackets more progressive.
24 Nov 13
Originally posted by normbenignWith the global economy fully established and globalization now fully entrenched at some point where can business run and hide if a 1:12 ratio were instituted. In the long run do you want to see American workers paid that of the Indians or the Chinese?
Yes, at the simplest level, why is it logical that government that can't run its own business will run everyone else's. Paying workers is based on the value of what they can do, not their needs or wants. Can there be a single ratio that expresses the difference?
You rightly point out that corporations have many ways of getting around such nonsense, ...[text shortened]... altogether. Top level administrators can also be farmed out so that the ration is meaningless.
24 Nov 13
Originally posted by normbenignCEO appointments get done through the old boys' network and have little, if anything, to do with being able to run a business.
I don't know if it is still the case, but in the '90s most American CEOs were CPAs. Corporate boards apparently believed understanding the books was the highest qualification of the CEO. While this is important, it may be even more important to have a vision of the companies mission, and how to use human capital, not things that bean counters do well. This doesn't constitute an argument that government can evaluate talent better.
Needless to say, government officials are equally poor at determining what constitutes a good leader.
24 Nov 13
Originally posted by joe beyserMost small business owners tend to reinvest profits in their business. Very few of them will exceed the 1:12 ratio.
This way a small business owner who has worked many hours to build his business and finally starts getting financial reward for it now gets it taken from him. How do you think it is the place of government to tax the incentive out of entrepreneurship?