Because the employer cannot exist without his employees, and if the employer is getting billions while the employees are only getting thousands, then those employees are certainly getting undercharged.
It's a way to force wages to scale to productivity and value, something that (if you have not remained ignorant of the current political dialogue), has been shown again and again to not be happening anymore.
Not just that but, why should the employer make more? What added value does the CEO bring that other people cannot already do? Most CEOs can be replaced without employees, consumers, and shareholders noticing. The 'personnel value' that a CEO brings is clearly very marginal in most businesses, as opposed to bringing in more engineers or HR workers or temps. And the CEO's salary can pay for a lot more of those.
I disagree. Nobody forced anyone to be a teacher: people have chosen that job knowing full well they’d make less money than an engineer. People aren’t assigned careers like they were in a the Soviet Union: they pick what they want to do. I used to be a photojournalist. The pay sucked so I ended up doing software. Nothing is stopping a teacher from making similar choices. People complain about the pay, but they keep joining lower paid professions. It’s supply and demand.
Shouldn't everyone at least have enough for the basic necessities in life if they're willing to work (at anything not just professional jobs).
So while nobody is forcing people to work x job for shitty pay, I don't see how just because someone is famous or a CEO that warrants being paid 500x anyone else. There's a lot of shitty CEO's who definitely aren't worth 500x a software a developer, yet there they are making it regardless because the rich lookout for the rich.
Do you think it's actually okay for the person teaching your kids algebra to be making barely more money than the cashier ringing up your groceries at the store, while having to pay for supplies for their class out of their own pocket?
If a company is doing exceeding well, why should only the CEO see the benefit, and not the people doing the grunt work of actually building the products that lead to the company's success?
> Fairness and capitalism-based business generally don’t go together.
They don't, but they can.
> That kind of thinking leads to all kinds of problems. For example, is it fair for an employee to jump ship for a higher salary offer elsewhere and leave their coworkers to pick up the pieces? I would say no.
I would say yes. People jump to new jobs for a higher salary all the time.
Ideas of gbi, employee-pegged ceo pay, and universal healthcare all benefit worker mobility which will also keep corporations in check even more and 'temper' capitalism, it's not socialism --it's tempered capitalism instead of runaway crony capitalism that we'd like to see implemented.
Good point. I agree 100%, and it's so incredibly sad to see so many people defending the status quo in this thread.
There's a lot of CEO worship on HN. Probably a lot of startup founders full of themselves.
I think it's both ways, I mean there's both sides of the political spectrum on HN, you've got your progressives and Trump supporters, and everything in between. A lot of people aspire to be CEO here, and would like to know they can set their own rates and feel that someday they'll be the next Elon Musk though for 90% reading this that's highly unlikely they might make it to 1% of his success if they're super lucky.
But workers should have some sort of compensation for success of the company. If the company releases a new product and it triples the value of the company, the workers should see some sort of bonus for the value they created. Leadership is a tough job, and CEOs take on risk, but without the grunt workers the company has nothing.
To be clear, I'm not expecting equality, but the wealth gap shouldn't be as gaping as it is.
To me at least the vast majority of pay structure in traditional companies seems to be hierarchical rather than actually being structured around ‘merit’. And for many businesses I’d wager it’s really hard to actually determine individual merit over the lifetime of a business. As such a flat pay structure might be better. Particularly if there is a profit sharing scheme?
The "mass death" thing the other commenter brought up is just plain silly, IMO. Communism failed (and will always fail) due to corruption and greed, and in the past has always been implemented by malicious dictators.
The hierarchical pay structure makes some sense because the higher you go, the more risk you bring to the company. A low-level manager may make a bad hiring choice that costs the company tens of thousands in wasted wages after hiring someone unproductive. Middle management may mismanage their teams and create working environments that lower morale. Upper management and CEOs may make bad decisions on what new products to green light and can cost the company millions or tank it completely.
So, it makes sense IMO to pay the higher ups more, but there should be a profit sharing scheme of some sort to reward people of all levels for their contribution to the success of the company.
Further I can definitely see the argument that having more responsibility could be incentivised with higher pay if the risk to the individual actually increased. But I also see no compelling evidence that is actually the case. But usually in structures with flatter pay like coops individuals have more say anyway.
Corruption and greed also seem like good explanations for the status quo TBH.
If after that search you find no one willing to pay you more perhaps consider if you really are so pivotal to the companies success.
No single person will triple the value of a company. Not even the CEO. The CEO may make a major decision, but it's still the people at the very bottom doing the grunt work that implement it, and they should see some of the fruit of their labor.