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Striking auto workers want a 40% pay increase–the same rate their CEOs’ pay grew

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Re: Striking auto workers want a 40% pay increase–the same rate their CEOs’ pay grew

#141

Post by spondyl »

astrange wrote: post #38
econperplexed wrote: post #8

> From 1978 to 2021, CEO pay grew by 1,460%, adjusted for inflation, versus just 18.1% for the typical worker. Why has the supply of CEOs not kept up with the demand for them? Surely, with the improvement in education and in increase in MBA programs, there must be far more CEOs today than in 1978. Why has the ratio of CEOs to Companies fallen by 14x for their wages to rise this much? /s As many argue, wages are only…

It depends how they're counting. There was an example in Money Stuff this week where a CEO got a pay package "worth $110 million". It's actually made of stock options that vest if the share price went above $150, but the expected value was $110 million so that's what was reported. …But the share price only reached $66. So in fact he was paid zero, and he quit. (Well, $1.5 million in cash.) https://www.wsj.com/busines…

> It's actually made of stock options that vest if the share price went above $150, but the expected value was $110 million so that's what was reported.

It gets a little weirder than that I suppose since you might have a great deal of shares in a company, which you never exercise so you could say that money doesn't really exist until exercised.

You can however use those shares as collateral for a mortgage or other line of credit which is a pretty common tactic for wealthy people to avoid paying income tax that they otherwise would if they were to sell said shares.

Re: Striking auto workers want a 40% pay increase–the same rate their CEOs’ pay grew

#142

Post by borisjabes »

aaomidi wrote: post #87
astrange wrote: post #38

Earlier quoted context omitted.

It depends how they're counting. There was an example in Money Stuff this week where a CEO got a pay package "worth $110 million". It's actually made of stock options that vest if the share price went above $150, but the expected value was $110 million so that's what was reported. …But the share price only reached $66. So in fact he was paid zero, and he quit. (Well, $1.5 million in cash.) https://www.wsj.com/busines…

Right, but in general the CEO doesn’t really do much to the stock price. If the general market is up, it’s going up. If the market is down, it’s going down. How many companies really break that relationship in their market sector? So tldr, ceo pay is based on the economic cycle rather than how the company does.

Some public CEOs comp packages are defined by them exceeding $SPY so boards do expect more than just the economic cycle.

Re: Striking auto workers want a 40% pay increase–the same rate their CEOs’ pay grew

#143

Post by lr4444lr »

jonathankoren wrote: post #5

It’s important to note the workers made huge concessions in 2008 that saved the companies from bankruptcy. Over the years they’ve seen stagnant wage growth, while the execs got solid gold toilets. Even with 40% increase (inevitably spread out over many years), theyd barely be back to where the would have been without the concessions.

They were in no position to negotiate back then. Plus, there was probably heavy influence from retirees to save the pension fund.

Re: Striking auto workers want a 40% pay increase–the same rate their CEOs’ pay grew

#144

Post by beej71 »

kortilla wrote: post #80
throw0101b wrote: post #41

Earlier quoted context omitted.

> There is no training to be a good CEO. They are not easily replaceable. If Steve Jobs—who first created and then basically rescued Apple and started it on the path to where it is today—can be 'replaced' then any other leader can be replaced. Similarly there are plenty of CEOs that are paid oodles of money that were or are absolute garbage: see Boeing for the last 15+ years as Exhibit A.

He was replaced, but not with someone as good. Apple has done well under Tim Cook, but there is an obvious lack of innovative vision since Steve’s passing.

Perhaps if they offered a pay increase they could attract someone better, but maybe they can't afford it.

Re: Striking auto workers want a 40% pay increase–the same rate their CEOs’ pay grew

#145

Post by nemo44x »

Why does LeBron James make so much more than the ball boy and concession stand workers and ushers?

A CEO that delivers alpha deserves a big cut of that. The board exists to hire leaders that can deliver alpha. A good deal fail to. But the ones that do are more than worth their compensation.

And btw you have 0 chance of attracting the kind of CEO that can deliver alpha by offering peanuts. It doesn’t always work out and there’s plenty of snake oil CEOs, but the good and great ones are worth every cent to stock holders.

Re: Striking auto workers want a 40% pay increase–the same rate their CEOs’ pay grew

#146

Post by ripvanwinkle »

highwaylights wrote: post #57
econperplexed wrote: post #8

> From 1978 to 2021, CEO pay grew by 1,460%, adjusted for inflation, versus just 18.1% for the typical worker. Why has the supply of CEOs not kept up with the demand for them? Surely, with the improvement in education and in increase in MBA programs, there must be far more CEOs today than in 1978. Why has the ratio of CEOs to Companies fallen by 14x for their wages to rise this much? /s As many argue, wages are only…

To paint the above in starker terms: Worker pay is set by the leadership, leadership pay is set by the leadership.

[flagged]

Re: Striking auto workers want a 40% pay increase–the same rate their CEOs’ pay grew

#147

Post by astrange »

callalex wrote: post #122
bradleyjg wrote: post #14

I think they should get it and it should be in out of the money stock options. I don’t understand why so many dinosaur companies restrict equity based comp to the C suite.

It’s generally a bad deal for the worker compared to cash. An assembly line worker has absolutely zero say in the direction of the company, their work will never meaningfully move the needle on stock price, so it makes no sense to tie their income to something they have no control over.

Share-based compensation can be good if the stock is heading up, because it's cheaper for the company to pay it than cash is. In between the award and vesting, the increase is paid for by equity investors.

But, you have to keep working there and you have to be able to afford to wait for the vesting.

Re: Striking auto workers want a 40% pay increase–the same rate their CEOs’ pay grew

#148

Post by MuffinFlavored »

The only person losing out is going to be the consumer. What's to stop executives at Ford, GM and Stellantis from saying "sure, 40% pay increases, no problem" and then just passing it along to consumers one way or another?

There isn't enough margin in the R&D + logistics of producing cars as is.

Ford's stock is up 25% in 5 years, vastly underperforming the index

GM stock is -5.6% over 5 years

Stellantis stock is +3.55% over 5 years.

Where is the argument that the greedy capitalist meanies at the top are doing nothing but buybacks with the millions in profits inflation the stock?

Re: Striking auto workers want a 40% pay increase–the same rate their CEOs’ pay grew

#149

Post by MisterBastahrd »

71a54xd wrote: post #37

This kind of logic doesn't help anyone - yes, CEO pay is insane but its that way because of how much risk they take ownership of and shoulder day in day out. If one line worker forgets to tie a wire-harness it's not like the entire company will end up in financial ruin... However, the CEO making serious mistakes can and has cost GM millions.

Are we supposed to pretend that most CEOs don't have an entire fleet of people at their disposal to ensure that they aren't making incredibly boneheaded decisions?

Re: Striking auto workers want a 40% pay increase–the same rate their CEOs’ pay grew

#150

Post by Alupis »

lolinder wrote: post #136
Alupis wrote: post #74

Settle in for a wild propaganda-filled fall season. Between UAW Strike, SWG Strike, barely avoided UPS Strike, and probably a few I'm leaving out, we're going to be inundated with half truths, misdirection, selective statistics and even the occasional outright lie. UAW opening demand isn't just a 40% pay hike - but also a four day workweek (when combined is ~70% increase in pay). Nobody expects for UAW to get everyth…

> Comparing C-Suite compensation, pay scale, growth rate and disparity from line workers is disingenuous at best. They cannot be compared, nor should they. For everything besides growth rate I can see arguing that they can't be compared—I don't agree, but I can understand where you're coming from—but why should a CEO's salary go up dramatically faster as a percentage than line workers'? Is the CEO somehow working 40%…

The CEO is measured by company performance over a period (may be a year or years), and the value they bring the organization as a whole.

Your average line worker cannot impact the entire business like this. They alone cannot be responsible for huge growth or periods of rapid shrinkage.

They just happen to be the most visible...

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