How does this political agenda relate to protecting investors? Is the SEC now the department of labor?
SEC adopts rules mandating disclosure of CEO-worker pay ratios
31–40 of 86 posts
Re: SEC adopts rules mandating disclosure of CEO-worker pay ratios
#32Can someone explain to me why we're outraged that CEOs make lots of money? I truly don't understand it. My presumption is that CEOs are adding enough value to be worth their pay, just like every other worker (should be).
IMO it's actually the wrong way to look at it.
The position as a CEO is potentially adding value if managed properly, but many CEOs get insane salaries, bonuses and golden handshakes even when they perform poorly.
The actual groundwork that made most companies valuable were laid much earlier in the organizations life.
Re: SEC adopts rules mandating disclosure of CEO-worker pay ratios
#33Can someone explain to me why we're outraged that CEOs make lots of money? I truly don't understand it. My presumption is that CEOs are adding enough value to be worth their pay, just like every other worker (should be).
The populist (read: uninformed/envious) belief is that high-paid CEOs are simply entitled ladder climbers that don't provide any more value than the mail room clerk, and yet soak up zillions in bonus dollars that should instead go towards paying said mail room clerk.
Except for studies that indicate otherwise. And that their salary is determined by a board of their peers, whose salaries are determined by boards that may include that executive.
There is no downside to increasing CEO compensation for these boards.
Re: SEC adopts rules mandating disclosure of CEO-worker pay ratios
#34Can someone explain to me why we're outraged that CEOs make lots of money? I truly don't understand it. My presumption is that CEOs are adding enough value to be worth their pay, just like every other worker (should be).
Also, how do we define worth their pay?
Re: SEC adopts rules mandating disclosure of CEO-worker pay ratios
#35Can someone explain to me why we're outraged that CEOs make lots of money? I truly don't understand it. My presumption is that CEOs are adding enough value to be worth their pay, just like every other worker (should be).
Not outraged about CEOs making lots of money compared to their workers, necessarily.
I think this is a good idea for shareholders and as a shareholder I support it. Why would giving shareholders more insight into such a major expense (compensation) be a bad idea? I'd want to know if a company I was a shareholder in was over/underpaying its CEO, because there's some efficiencies to be gained there.
Re: SEC adopts rules mandating disclosure of CEO-worker pay ratios
#36Earlier quoted context omitted.
Honestly CEO's getting paid a ton isn't really much of a problem as opposed to the US's absurdly low income tax rates for the wealthy. Not to mention capital gains... estate taxes... etc
> US's absurdly low income tax rates for the wealthy The top 20% of earners pay over 80% of the income taxes. That's low?
Yawn, what percentage of total income in the US is earned by the top 20%?
Re: SEC adopts rules mandating disclosure of CEO-worker pay ratios
#37Earlier quoted context omitted.
Who decides that and is it true or fair? If the CEO earns 25x the average employee salary would it be clear that they add 25x more value to the company than any other employee?
The owners of the company? i.e. Shareholders. It's not anyone else's business. Workers are free to renegotiate their contract, resign, buy shares, or start their own company. Who else other than the owners should decide?
That would be true if they success of the company was 100% depending on the companies ability alone, however it's not. There are many factors external to the company itself that are involved in creating successful companies.
Re: SEC adopts rules mandating disclosure of CEO-worker pay ratios
#38Earlier quoted context omitted.
Honestly CEO's getting paid a ton isn't really much of a problem as opposed to the US's absurdly low income tax rates for the wealthy. Not to mention capital gains... estate taxes... etc
> US's absurdly low income tax rates for the wealthy The top 20% of earners pay over 80% of the income taxes. That's low?
How much of the income they get?
Re: SEC adopts rules mandating disclosure of CEO-worker pay ratios
#39I am not sure what the big deal is with this. I vaguely understand why regulators want this to be public knowledge. I have no understanding of why effort is being spent in opposing this.
Because putting more items into filings costs money and creates the possibility of liability if anything is off. Think of your tax return. Rigorous legal and financial document preparation is expensive. Large corporations can afford the bloat of thousands of regulatory requirements, smaller companies not so much. These added costs are borne by society in the long run, similar to how airline security regulations sometimes cause tickets to cost nearly two times what the original fare would be. This regulation isn't vital for informing investors of the performance of a company (this kind of ratio can be done by anyone who cares to do so using already available information).
Re: SEC adopts rules mandating disclosure of CEO-worker pay ratios
#40Can someone explain to me why we're outraged that CEOs make lots of money? I truly don't understand it. My presumption is that CEOs are adding enough value to be worth their pay, just like every other worker (should be).
You shouldn't be outraged, but your justification for their pay is a little simplified.
People aren't paid based on the value they create, strictly speaking. They're paid whatever is necessary to get them to work.
The value of a good executive is, I'd argue, far higher than their pay reflects. A truly bad executive can put a company on the path to ruin, and a decent executive making bad choices can do the same. What companies are paying for in good/great executives isn't some N times multiplier on that salary in new income, they're paying for reduced chances of catastrophe.
The supply of good/great executives is small, and the potential loss from putting a dunce in charge of AAPL/GOOG is obscene, so is it any wonder the price lands where it does?