Re:McKinsey, technocratic management, and structural inequality
by rayiner on Monday February 03, 2020 @11:13PM
(#22232324)
A average CEO pay in the Fortune 500 is 14.5 million: https://aflcio.org/paywatch. That’s $7.2 billion total. The Fortune 500 employs 26 million people. If you paid CEOs zero and redistributed it all, everyone would get a raise of about $277 per year.
Re:McKinsey, technocratic management, and structural inequality
by dcolkitt on Monday February 03, 2020 @11:40PM
(#22232470)
The median annual compensation for the median Fortune 500 company is $72,000 per year.[1] So total redistribution would represent an increase of 0.3% to the take-home pay of the average big company worker.
Again, no matter how you want to slice it, aggregate CEO pay is simply too small in magnitude relative to aggregate American salaries to have any meaningful impact. At most you could say something about it being symptomatic of a larger problem, but CEO pay is absolutely not the direct cause of slow growth in wages.
[1] https://www.usatoday.com/story/money/business/2018/05/25/ceo...
Re:McKinsey, technocratic management, and structural inequality
by AstralStorm on Tuesday February 04, 2020 @05:24AM
(#22234077)
I'd say lobbying and voting with money is, and CEOs are responsible for it.
The richer they are, the less they care about wage or product, the more they care about extracting rent - via investment or cuts, causing stock market reactions, which ignore all those things.
They tend to also lose the common touch, just like the aristocracy that preceded them.
Re:McKinsey, technocratic management, and structural inequality
by james_s_tayler on Monday February 03, 2020 @11:35PM
(#22232443)
CEOs don't add anything of economic value?
Riiiiiight.
Re:McKinsey, technocratic management, and structural inequality
by dcolkitt on Monday February 03, 2020 @11:41PM
(#22232480)
In case it wasn't clear, I'm not making that claim. I'm simply laying out the most generous conceivable case to show why it's mathematically impossible for CEO compensation to directly explain slow secular growth in wages.
Aggregate CEO pay at the largest 350 firms in the US was $6 billion in 2018[1]. Let's quadruple that to account for the remainder of large firms and other C-suite executives.
Let's assume all of CEO compensation is entirely rent-seeking, CEOs don't add anything of economic value, and we can just redistribute their compensation to every man, woman and child in the US with no loss of GDP.
In total that would represent an income gain of only $72 per year for the median person. CEO pay may be symbolically important, but it's simply inconceivable that rising CEO compensation has had any meaningful impact on middle class wages.
[1] https://www.epi.org/publication/ceo-compensation-2018/