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“Overpaid Executive Tax” in SF hits firms that pay CEOs 100X more than workers

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Re: “Overpaid Executive Tax” in SF hits firms that pay CEOs 100X more than workers

#51

Post by fennecfoxen »

Ericson2314 wrote: post #39
fennecfoxen wrote: post #17

Earlier quoted context omitted.

s/idiocy/ideology/

"ideology" needs to be rehabilitated as less pejorative — in our era of empiricism devolved into mindless statistics, the desire to fit everything into a coherent theoretical framework needs a better rep. "Virtue signaling" is a phrase with no good connotation to corrode, and one I'd prefer for the critiwue I believe you are trying to make.

If I were trying to make a critique, sir, I'd be making it. I'm just urging another poster applying a more appropriate I-word that doesn't cast aspersions on intelligence, when the conflict is about a world view bundled with a set of values and policy prescriptions.

Re: “Overpaid Executive Tax” in SF hits firms that pay CEOs 100X more than workers

#52

Post by part1of2 »

rmrfstar wrote: post #50
wittyreference wrote: post #4

I’m confused. What’s to stop these orgs from shuttling all their lower paid employees into a distinct staffing solutions LLC and just use them to “hire” staff for a parent company comprised of executives? Other fields do this regularly - hospitals often organize their physicians into a distinct staffing org, for instance. It’s entirely legal. So is this anything other than a feel good law that will push some minor co…

The way GAAP tackles shams like that is "consolidation". [1] For example, you report wholly owned subsidiaries as if they are part of the parent organization. Clearly, accountants and lawyers can engage in fuckery as they did at Enron. But the law is fully capable of calling out a sham, even it it has recently become reluctant to do so. [1] https://www.pwc.com/us/en/cfodirect/publications/accounting-...

GAAP isn’t a law though . So how does this law capable of handling this scenario?

Re: “Overpaid Executive Tax” in SF hits firms that pay CEOs 100X more than workers

#53

Post by rocgf »

boldslogan wrote: post #16
rocgf wrote: post #9

Earlier quoted context omitted.

> This isn't okay. Why not?

hypothetically, at a certain point you pay an employee (the costs) should be equal to their value they bring to the company (the benefits) in the usual economic sense, you keep paying until it hits the exact costs, you don't pay too much and you don't pay too little. Now lets think of a two kind of counter factual worlds and think of which is worse for the firm. 1. CEO disappears from the company, that marginal benef…

I am sorry, but convinced I am not.

Most of the arguments against high CEO wages seem to completely forget about the capitalism we live in. I do not think the current system is the perfect, but for better or worse, the rules are relatively simple. To say that CEOs earn too much is a sign of double standards.

CEOs are chosen by private companies using their hard earned money from a market of CEOs governed by supply and demand. Companies are always out to cut costs, and that applies to CEOs.

You may not find it morally sound, but to blankly say "CEOs have to earn X amount" is really hypocritical.

Re: “Overpaid Executive Tax” in SF hits firms that pay CEOs 100X more than workers

#54

Post by chrismcb »

ineedasername wrote: post #42
jawns wrote: post #36

Unfortunately, this hits companies from the wrong direction. Even if it incentives good behavior (which is debatable), the good behavior it incentivizes is to lower one person's enormous compensation so that it's slightly less enormous but still quite large. What the law should promote is upward pressure on the lowest earners' compensation rather than downward pressure on the top earners' compensation. Minimum wage h…

Well it might help upward pressure (though I'm skeptical) because for every $1k more a year in median income, a CEO can pay themselves an addition $99,000 without running afoul of this law.

You have to pay out more than $1000 though to raise the median $1000, unless your business has fewer than 100 people.

Re: “Overpaid Executive Tax” in SF hits firms that pay CEOs 100X more than workers

#56

Post by cbnotfromthere »

boldslogan wrote: post #16
rocgf wrote: post #9

Earlier quoted context omitted.

> This isn't okay. Why not?

hypothetically, at a certain point you pay an employee (the costs) should be equal to their value they bring to the company (the benefits) in the usual economic sense, you keep paying until it hits the exact costs, you don't pay too much and you don't pay too little. Now lets think of a two kind of counter factual worlds and think of which is worse for the firm. 1. CEO disappears from the company, that marginal benef…

"hypothetically, at a certain point you pay an employee (the costs) should be equal to their value they bring to the company (the benefits)"

That is literally absurd, as it would mean the theoretical company would have literally no benefit from said theoretical employee(s).

Re: “Overpaid Executive Tax” in SF hits firms that pay CEOs 100X more than workers

#57

Post by holidayacct »

roseway4 wrote: post #48
holidayacct wrote: post #47

Those positions don't work the way people think they do. Some CEOs have to spend obscene amounts of money defending themselves from frivolous lawsuits and people constantly screwing around with their lives. You should be looking to see how much the CEO is actually keeping, not how much they are making.

Please provide a reference. It is customary for the company to purchase Directors and Officers insurance which covers litigation and liability for CEOs and often other executives. Edited: grammar

I wasn't aware that was done for all CEOs. You still have to consider the idea that many CEOs have to deal with an array of problems in their personal lives that other people don't have to deal with. I mention that with the caveat that the level of problems other people bring to their personal lives in order to create distractions is cultural.

Re: “Overpaid Executive Tax” in SF hits firms that pay CEOs 100X more than workers

#58

Post by CWuestefeld »

wittyreference wrote: post #4

I’m confused. What’s to stop these orgs from shuttling all their lower paid employees into a distinct staffing solutions LLC and just use them to “hire” staff for a parent company comprised of executives? Other fields do this regularly - hospitals often organize their physicians into a distinct staffing org, for instance. It’s entirely legal. So is this anything other than a feel good law that will push some minor co…

Other fields do this regularly - hospitals often organize their physicians into a distinct staffing org, for instance.

Hospitals do this in the opposite direction. If you're in the suburbs a metro area (where cost indexes are higher, so Medicare reimburses at a higher rate), you try to make your own expenses look higher to convince CMS to include your hospital into the same cost index as the metro area itself. One tool to do this is to separate out unskilled workers (housekeeping and the like) into a separate corporation, thus moving the average pay rate higher.

Source: wife managed Medicare and Budget at a large hospital just outside of the NYC area, and did exactly this.

Re: “Overpaid Executive Tax” in SF hits firms that pay CEOs 100X more than workers

#59

Post by CWuestefeld »

jawns wrote: post #36

Unfortunately, this hits companies from the wrong direction. Even if it incentives good behavior (which is debatable), the good behavior it incentivizes is to lower one person's enormous compensation so that it's slightly less enormous but still quite large. What the law should promote is upward pressure on the lowest earners' compensation rather than downward pressure on the top earners' compensation. Minimum wage h…

Much greater potential to improve the lives of the lowest-paid workers; businesses often threaten to compensate via layoffs but usually don't follow through

The effects come in through other means besides layoffs. The businesses still have to make up those expenses somehow, and non-monetary compensation is a primary target. If the government is telling businesses that it must provide greater monetary compensation, then they'll compensate by offering less non-monetary. This will happen through measures like eliminating training programs that could help employees get off that bottom rung; or eliminating flexible scheduling that, say, a single mom might need to attend to her kid's needs. Essentially, there are many form.

Long term, there are more negative consequences to minimum wage than you can count through just disemployment effects, which are already keeping the very lowest rung of people unemployed.

Re: “Overpaid Executive Tax” in SF hits firms that pay CEOs 100X more than workers

#60

Post by ineedasername »

chrismcb wrote: post #54
ineedasername wrote: post #42

Earlier quoted context omitted.

Well it might help upward pressure (though I'm skeptical) because for every $1k more a year in median income, a CEO can pay themselves an addition $99,000 without running afoul of this law.

You have to pay out more than $1000 though to raise the median $1000, unless your business has fewer than 100 people.

Oh, I'm not saying it would be cheap. The larger the company, the more expensive. But if a CEO can make an extra ~$100,000 of their own money by spending a few $million of someone else's money, at the same time that they can claim it's all some sort of virtuous act, then I think that's a deal some of them will make.
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