I hope this starts a trend

[aaronc879]

University interim President gives up $90,000 of his $350,000 salary to help minimum wage workers on campus make a more reasonable $10.25/hr.

University president cuts salary to boost worker pay - Aug. 6, 2014

He stills makes an enormous salary and the low end workers can actually feel like their work is being appreciated.

 

[ERD50]

Burse emphasized that he didn't make the move for publicity.

That's a little hard to swallow. He could have made the donations anonymously and quietly.

A campus has only 24 min-wage workers?

Certainly nice of him to donate $90,000 of his salary, but I don't think this will start a trend and I don't really see where it is going. I'm generally a fan of letting the free market set the price of things. Price fixing seems to cause more problems than it solves. That doesn't mean an unfettered market, we do need regulations for 'tragedy of the commons' areas, for safety and non-transparent issues.

-ERD50

 

[robnplunder]

Regardless of his true motivation, I applaud it. I hope politicians follow his lead instead of giving themselves a nice raise every year. <--- There must be a law against that BTW.

 

[MBAustin]

Regardless of his true motivation, I applaud it. I hope politicians follow his lead instead of giving themselves a nice raise every year. <--- There must be a law against that BTW.

+1

Executive pay in all sectors is totally out of control. And now S&P is saying this is a drag on the economy. Duh, of course it is! If the 99% each made $1000 more per year, this would be a lot of $$ into the economy. Instead the executives keep getting raises when they can't spend what they already make, so it only goes to making wealthy investment advisors richer.

Inequality Is Really Hurting The Economy, S&P Warns

 

[SumDay]

Executive pay in all sectors is totally out of control. And now S&P is saying this is a drag on the economy. Duh, of course it is! If the 99% each made $1000 more per year, this would be a lot of $$ into the economy. Instead the executives keep getting raises when they can't spend what they already make, so it only goes to making wealthy investment advisors richer.

+1000

 

[aaronc879]

That's a little hard to swallow. He could have made the donations anonymously and quietly.

A campus has only 24 min-wage workers?

Certainly nice of him to donate $90,000 of his salary, but I don't think this will start a trend and I don't really see where it is going. I'm generally a fan of letting the free market set the price of things. Price fixing seems to cause more problems than it solves. That doesn't mean an unfettered market, we do need regulations for 'tragedy of the commons' areas, for safety and non-transparent issues.

-ERD50

The article doesn't specify exactly how it's going to work out but it seems to me to be less of a "donation" and more of a restructuring of compensation. The restructuring of compensation is what I would like to see more of.

 

[ERD50]

The article doesn't specify exactly how it's going to work out but it seems to me to be less of a "donation" and more of a restructuring of compensation. The restructuring of compensation is what I would like to see more of.

I think there are cases where it would be beneficial if compensation were restructured. However, I think the driving factors behind the compensation have to change, you can't just legislate it, or wish for it.

So does anyone have any suggestions on how we could restructure earnings for sports stars, actors, pop stars (I hesitate to refer to some of them as 'musicians'), and CEOs . For some reason, the focus seems to be on CEOs and not those other high earners. Who might do more good for the Country - Elon Musk, or a boxer, or a 'performer'?


Top 10 Highest Paid CEOs | Top 10 Everything of 2013 - Business | TIME.com

top 10 range from #1 $78M (everyone's hero - Elon Musk) to # 10 @ $42M



The World's Highest-Paid Musicians 2013 - Forbes

Madonna at #1 - $125M


Robert Downey Jr. Tops Forbes' List Of Hollywood's Highest-Paid Actors - Forbes

Robert Downey Jr. - $75 million


The World's Highest-Paid Athletes List - Forbes

Floyd Mayweather #1 - $105 M
Matt Ryan #10 $43.8 M

-ERD50

 

[robnplunder]

So does anyone have any suggestions on how we could restructure earnings for sports stars, actors, pop stars (I hesitate to refer to some of them as 'musicians'), and CEOs .

I suggest restructuring it to profit/merit based. Too many CEOs and mega stars earned outrageous amount of money when their company, pro team, movie didn't turn profit. One of my previous company CEO was paid $10M when no one got salary increase due to company's poor performance. His salary/bonus that year could have been used for salary increase (or one time bonus) for all.

 

[ERD50]

I suggest restructuring it to profit/merit based. Too many CEOs and mega stars earned outrageous amount of money when their company, pro team, movie didn't turn profit. One of my previous company CEO was paid $10M when no one got salary increase due to company's poor performance. His salary/bonus that year could have been used for salary increase (or one time bonus) for all.

It's not always that simple. How would a poor performing company ever attract top talent to turn it around?

What if a real top-notch CEO worked 100 hour weeks all year, was the best person for the job, and the company still lost $100M - but if we could run parallel experiments like in a lab, maybe they would have lost $500M with a lesser CEO? Now how much is that CEO worth?

-ERD50

 

[robnplunder]

Yup, it would not be always that simple. Just throwing out one idea among many.

Another idea is for people to exercise common sense. CEO compensation is out of whack, especially, for companies which are under performing. Only handful of CEOs deserve what they get. Their success is often overrated, and failure is still rewarded.

 

[Chuckanut]

I think the most important factor in this story is that the president seems to have some knowledge of what his lower paid workers are going through. IMHO, many people who are in the 1% have no idea what it is to have to decide "Shall if fix the car before the starter fails completely, or pay for my child's dental work?"

 

[Ronstar]

I suggest restructuring it to profit/merit based. Too many CEOs and mega stars earned outrageous amount of money when their company, pro team, movie didn't turn profit. One of my previous company CEO was paid $10M when no one got salary increase due to company's poor performance. His salary/bonus that year could have been used for salary increase (or one time bonus) for all.

Although I agree that CEO pay should be partially profit based, it can't be get to the point where the CEO curbs R&D, etc to boost profits to boost his own pay

 

[imoldernu]

Hope springs eternal...

X. Cease then, nor order imperfection name:
Our proper bliss depends on what we blame.
Know thy own point: This kind, this due degree
Of blindness, weakness, Heav'n bestows on thee.
Submit.—In this, or any other sphere,
Secure to be as blest as thou canst bear:
Safe in the hand of one disposing pow'r,
Or in the natal, or the mortal hour.
All nature is but art, unknown to thee;
All chance, direction, which thou canst not see;
All discord, harmony, not understood;
All partial evil, universal good:
And, spite of pride, in erring reason's spite,
One truth is clear, Whatever is, is right. ~A. Pope

... or, "it is what it is".

 

[aaronc879]

Although I agree that CEO pay should be partially profit based, it can't be get to the point where the CEO curbs R&D, etc to boost profits to boost his own pay

I don't think any CEO should get more money based on profits unless ALL employees get profit sharing.

 

[ERD50]

Yup, it would not be always that simple. Just throwing out one idea among many.

Another idea is for people to exercise common sense. CEO compensation is out of whack, especially, for companies which are under performing. Only handful of CEOs deserve what they get. Their success is often overrated, and failure is still rewarded.

The problem is 'people' don't have much control over this.

We've discussed this before - but I think the cozy relationship between CEO and the Board that sets his/her compensation is the root of the problem. I'm frustrated that the big investors like Calpers don't push for changes here. The CEO should have to compete with others for that job - can someone else do as well for less?

But here we are focusing on CEOs when there are performers, actors, and athletes making many multiples of the people who work for them. I bet there are some janitors in some of those concert halls that I'd rather hear sing than Madonna.

-ERD50

 

[savory]

+1

Executive pay in all sectors is totally out of control. And now S&P is saying this is a drag on the economy. Duh, of course it is! If the 99% each made $1000 more per year, this would be a lot of $$ into the economy. Instead the executives keep getting raises when they can't spend what they already make, so it only goes to making wealthy investment advisors richer.

Inequality Is Really Hurting The Economy, S&P Warns

My first reaction is this guy deserves a raise I always liked the Ben & Jerry's approach when the leader could only earn 5 times the lowest paid worker. It worked for a while but it did collapse. Perhaps 5 times is not enough but 331 times is way out of line.

 

[Ronstar]

I don't think any CEO should get more money based on profits unless ALL employees get profit sharing.

I agree. But the boards of these companies see the CEO being able to increase profits exponentially compared to the rank and file. So the profit sharing goes to the CEO because the board thinks that's where they'll get the biggest bang for their buck.

We had somewhat of a fair way of handling it when I worked. The owners of the company took a percentage of the profit based on their ownership share. Normally this profit was after a profit sharing disbursement to the employees. Coming up with a fair method to divide the money among the employees was the tough part.

 

[robnplunder]

I agree. But the boards of these companies see the CEO being able to increase profits exponentially compared to the rank and file. So the profit sharing goes to the CEO because the board thinks that's where they'll get the biggest bang for their buck.

And they can drive the company to the ground exponentially. I have a favorite joke I tell others after a beer or two. When I (mid management in mega corp) make a mistake, it costs a company 6 figure. When my boss makes a mistake, it is typically 7 figure mistake. Extrapolate that to ... when a CEO makes mistake, he can run the company to the ground. He will still get his mega pay, even a better severance package. Let's face it. CEO pay for USA companies are out of whack, and have been for a while. No offense to CEO retirees in this forum.

 

[M Paquette]

...maybe they would have lost $500M with a lesser CEO? Now how much is that CEO worth?

Heh... One fun bennie of hanging out with the 'right' people in a business is the insight into the thinking of the board members and executive team. The board compensation committee can be particularly entertaining.

Remember that line from Lake Woebegone about how "all the children are above average"? Boards feel the same way about the CEOs that they pick. The board would never, ever settle for an average or below average CEO, when they could pick the best, right? Therefor, whichever CEO the board hires must be above average, and the board comp committee must confirm this with an above average salary.

Now, if all the CEOs hired receive above average CEO salaries, what happens to CEO salary over time? Class? Anyone? Anyone?

 

[ls99]

It seems to suggest that the previous one was not quiet up to average. And the one before that was lesser. Go back a few and they were all mediocre.

In this scenario the current one will be mediocre in no time at all.

 

[M Paquette]

In this scenario the current one will be mediocre in no time at all.

Which means the board will be hunting for fresh, better talent. Who will naturally command a higher salary...

So it goes. So it goes.

 

[ERD50]

...
Now, if all the CEOs hired receive above average CEO salaries, what happens to CEO salary over time? Class? Anyone? Anyone?

-ERD50

 

[samclem]

So does anyone have any suggestions on how we could restructure earnings for sports stars, actors, pop stars (I hesitate to refer to some of them as 'musicians'), and CEOs . For some reason, the focus seems to be on CEOs and not those other high earners. Who might do more good for the Country - Elon Musk, or a boxer, or a 'performer'?

I don't much care if musicians, celebrities, etc make a lot of money. They are selling an experience, people want to pay for it, so whatever they can get is "fair." Our only hope is that the public wakes up--fat chance.

“No one in this world, so far as I know — and I have searched the records for years, and employed agents to help me — has ever lost money by underestimating the intelligence of the great masses of the plain people. Nor has anyone ever lost public office thereby.”
-- H. L. Mencken

CEO pay: I'd like to see a higher percent of compensation as stock options that can't be exercised or sold for at least 10 years, and only a gradual schedule after that. The idea is to discourage short-term thinking and "meeting the numbers," and have the CEO benefit if he puts the long-term interest of the company (and stockholders) first. I want 'em thinking about how to put the company on a solid foundation and grow for decades (e.g. don't cut R&D to make next quarter's numbers)

 

[CaliforniaMan]

No doubt that the growing income inequality has hurt and will continue to harm the economy in the future. But it is unlikely the problem will be solved by trying to bring down the wages of the CEOs or Madonnas. The market sets those wages, and as ridiculous as they might seem, they are what they are. I doubt there are many of us here who would have given away our salary to those making less, just to even things out.

When Henry Ford doubled his worker's salaries and instituted profit sharing for some, I doubt that he was doing it to reduce his own income. It was to decrease turnover and increase efficiency and profits. It had the probably unintended consequence of stimulating the entire economy.

However we attack income inequality now, pulling down the rich won't work. We have to find a way to raise up the middle class. And in an increasingly competitive world there is only one way to do this and that is to increase the value of the workers. How do we accomplish this? Only one way I can see, a better educated workforce.

So the question then becomes, how can we achieve this one goal. Many have proposed ideas, I won't try to enumerate them here, but to me this is the only strategic answer to the problem.

 

[brewer12345]

University interim President gives up $90,000 of his $350,000 salary to help minimum wage workers on campus make a more reasonable $10.25/hr.

University president cuts salary to boost worker pay - Aug. 6, 2014

He stills makes an enormous salary and the low end workers can actually feel like their work is being appreciated.

Laughable. This is all about publicity. Otherwise he would have been like my fellow alumni donors for a particular school. Half the donors are anonymous despite the fact that some of the donations dwarf what this dude gave up.