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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

#471

Post by vel0city »

hellojesus wrote: post #225
olliej wrote: post #180

Earlier quoted context omitted.

As someone pointed out "1.5 million in cash" for not doing the job you were hired for is .. not zero. I'm fairly sure I could achieve the same results for considerably less. Moreover making compensation dependent on stock price movement encourages corruption and fraud - look at the numerous Enrons and other financial claims. All of which left the majority of those responsible enriched while destroying the lives of ot…

It's zero of the bonus, of which the CEO had assigned a prior that made him choose that job over other offers he likely had. Performance based bonuses exist at virtually all levels of skill in companies. What you see as a catalyst for fraud could also be framed as a catalyst for incentivizing an outcome most likely achieved via hard/smart work. $1.5M is not nothing, but it's less than 1% of the CEOs potential compens…

What percentage of Walamrt's employee base probably has a significant part of their pay tied to performance?

Home Depot? UPS? Amazon's 1.6M, not just those in Seattle making well into the six figures? Kroger? Albertsons? Target? Starbucks? You really think a bagger or cart grabber or barista is getting a performance-based bonus? These are some of the largest employers in the US.

The vast majority of the US workforce probably has less than 10% of their income (probably close to 0%) directly tied to performance. A massive chunk is entirely how many hours they get on the clock, that's it.

> Performance based bonuses exist at virtually all levels of skill in companies

This really sounds like the perspective from someone who's never punched a clock.

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

#472

Post by [deleted] »

ytoawwhra92 wrote: post #362
whatshisface wrote: post #248

Earlier quoted context omitted.

Favoritism, cronyism or more like it would actually be described by the people who do it, a preference for trusted associates you've worked with in the past over strangers to run your stuff for you isn't a violation of your "market freedom" but rather an expression of a set of preferences that make all your choices incommensurable. P.S. it is not in the interest of investors for one employee to make way more money th…

> it is not in the interest of investors for one employee to make way more money than normal it's just that nobody knows how to avoid it when that employee is the center of decision-making See "A Principled Approach to Executive Pay", Chapter 1.F in The Essays of Warren Buffet , arranged by Cunningham. The issue I take with your line of reasoning is that executive compensation is often at odds with investor interests…

[deleted]

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

#473

Post by ElevenLathe »

mullingitover wrote: post #278
hellojesus wrote: post #231

Earlier quoted context omitted.

Leadership is set by shareholders. There is still accountability. Public unions seem more undesirable. There we have the gov negotiating with itself with no external accountability, unlike your example.

> Leadership is set by shareholders. Funny thing, I own a vast number of stocks through various means, either directly or via ETFs, and yet never in my life have I had an opportunity to weigh in on the salaries of anyone in the companies I hold equity in. > Public unions seem more undesirable. There we have the gov negotiating with itself with no external accountability, unlike your example. The government is negotia…

Exactly. "shareholder activism" is called that because it is a considered an anomalous, bizarre state of affairs. Imagine the temerity of the people who own the shares of the company calling the shots! In reality, management has basically a completely free hand to do whatever they want so long as an incumbent board doesn't get its shit together and replace them (and even that is sometimes not enough).

This is also beside the main point, which is that management shares a class interest with shareholders, even if they aren't literally the same people at some particular point in time. Capital and management are obviously on the same side, and labor isn't part of the club.

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

#474

Post by [deleted] »

ummonk wrote: post #365
noizejoy wrote: post #240

Earlier quoted context omitted.

> The CEOs are coming from a restricted group of insiders and can't be replaced because of their relationships which make them unique. Wouldn’t that be simply favouritism/cronyism rather than a free market?

Yeah it’s like trying to apply supply and demand to politican’s wages. Company directors and executives set their own wages using others’ money. It’s obviously not a market.

[deleted]

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

#475

Post by jonathankoren »

thriftwy wrote: post #107
sokoloff wrote: post #35

Earlier quoted context omitted.

Arguably, without the 2008 concessions, they'd be out of a job entirely.

Or maybe they would already be employed at a better place paying more and using their labor with greater leverage. I believe that workers and non-CS engineers are horribly underpaid around the world. They are underpaid in the US's Aerospace, they are underpaid in Russia's military industrial complex and they are also underpaid in China which actually supplies the stuff that everybody uses. Don't doubt they are also u…

>Or maybe they would already be employed at a better place paying more and using their labor with greater leverage.

I mean this in all seriousness. What in the past 50 years of deindustrialization makes you think that that as even a possibility? Sure, it’s the Econ 101 textbook answer. “Creative destruction” and all that jazz. But in reality, how has that actually played out?

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

#476

Post by mwbajor »

SeanAnderson wrote: post #31

I've heard a counter-argument to this before and I'm curious to get other's take on it. Basically, the story goes that when an individual rises into a significant leadership position at a large enough company that the economic calculations become different. There's still an element of domain expertise, but, for the most part, leadership is leadership wherever you go. This implies that a leader could (potentially) mov…

I think the MBA mantra that specific product expertise is not important: a widget is a widget, died with Jack Welch and Carly Fiorina (her career). Its still around but not nearly as much as 15-20 years ago.

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

#477

Post by vel0city »

mullingitover wrote: post #278
hellojesus wrote: post #231

Earlier quoted context omitted.

Leadership is set by shareholders. There is still accountability. Public unions seem more undesirable. There we have the gov negotiating with itself with no external accountability, unlike your example.

> Leadership is set by shareholders. Funny thing, I own a vast number of stocks through various means, either directly or via ETFs, and yet never in my life have I had an opportunity to weigh in on the salaries of anyone in the companies I hold equity in. > Public unions seem more undesirable. There we have the gov negotiating with itself with no external accountability, unlike your example. The government is negotia…

I haven't actually kept track, but it wouldn't surprise me for my direct stock ownership I've voted on executives in at least 70% of them and executive pay packages on probably 20% of them. Mostly mid to large cap though.

Not that my votes "no" were ever successful in curbing the growth of executive pay. Hard to vote against the executives who probably own a decent chunk of the voting shares themselves.

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

#478

Post by whatshisface »

ytoawwhra92 wrote: post #362
whatshisface wrote: post #248

Earlier quoted context omitted.

Favoritism, cronyism or more like it would actually be described by the people who do it, a preference for trusted associates you've worked with in the past over strangers to run your stuff for you isn't a violation of your "market freedom" but rather an expression of a set of preferences that make all your choices incommensurable. P.S. it is not in the interest of investors for one employee to make way more money th…

> it is not in the interest of investors for one employee to make way more money than normal it's just that nobody knows how to avoid it when that employee is the center of decision-making See "A Principled Approach to Executive Pay", Chapter 1.F in The Essays of Warren Buffet , arranged by Cunningham. The issue I take with your line of reasoning is that executive compensation is often at odds with investor interests…

Cronyism isn't an exception to microeconomics, it's a lesser-known example of a consumer preference. In this case the board has a... preference... for cronies. :-)

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

#479

Post by vel0city »

MichaelDickens wrote: post #266
vel0city wrote: post #78

Earlier quoted context omitted.

> paid zero > paid $1.5 million in cash These are two wildly different things.

$1.5 million is approximately $0 in comparison to the originally-quoted $110 million—it's less than 2% of the original amount.

Being honest, I'd really have to know what kind of timeframe that $1.5M was paid out. Was that a single year? 5? 10? It changes my opinion, slightly.

If its $1.5M in a single year, I have absolutely no tears to shed.

If that was 5 years, that's $300k/yr in compensation. A very comfortable salary in just about every place in the country. Once again, I probably have no tears.

If that was 10 years, that's $150k/yr. Ok, if you're expected to live in Manhattan or whatever, I'll agree that's pretty tight. Still though, that's a couple times the average household income in the US. Congratulations on being a bit closer to a plebeian. Boo hoo, guy who could have had generational wealth just had to live like the rest of us. What a tragedy. Truly zero income, being more than twice the average household income for a single earner without even thinking of other compensation he might have received.

I can't imagine this was some kind of performance pay over 15-20 years, so his pay has to be in this. I don't have a WSJ subscription, so I can't comment further on it.

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

#480

Post by boppo1 »

abeppu wrote: post #183

Just to point out a demonstrated, viable, successful reality achieved under different values and assumptions, the Mondragon Corporation/cooperative produces car parts, among many other things, and has pre-agreed ratios for wages for executives relative to the lowest wages paid to workers, and this tops out at 9:1. Studies have found that worker-owned coops have a greater survival rate than conventional businesses, an…

How is equity comp factored in?
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