How’s this for a definition: the average CEO gets paid 350x what the average worker gets paid, so unless they’re generating 350x the value of the average employee, they’re underworking.

If they have 350 employees, then they double the company's profit, I suppose they just generated 350x times the value of an average employee. If they have more employees, they only need to increase it a smaller proportion to be generating 350x as much value.

Doubling profit is relatively easy.

If you have 10M of revenue and 9.5M of expenses then an increase of 500k in sales doubles your profit. Given that everybody in the company is needed (for sake of argument) to produce the initial 10M I wouldn't say that the CEO inking a new sale for 500k is worth the entirety of the original company.

Your example assumes 100% gross profit margins which is unlike any company I've ever heard of.

Yes, if the 350 employees kept working the same as usual, and the only thing that changed was something the CEO did, not anything he ordered the employees to do.

Why that restriction? Deciding the direction employees work in is part of the CEO's job. If he directed them badly (say, to work on a project that fails because he misjudged the market), the company would make less money and it would be the CEO's fault.

Why should the employee with the CEO title get a raise for increasing company profits, while the employees without the CEO title do not get a raise for increasing company profits?

> the company would make less money and it would be the CEO's fault.

It would be the CEO's fault, and the workers who were not at fault would be fired when the company needs to tighten the belt.

Hint: impact

The average CEO in the US gets paid FAANG SWE wages, per the US government's own data. Cherrypicking a handful of highly compensated CEOs out of the tens of thousands of large corporations in the US is misleading at best.

CEO's get paid by shareholders, workers get paid by companies.

The money that workers bring into a company is often not being used at all to pay these CEO's. It's why so many CEO's have $0 salary or $200k salary.

It's a critical distinction because it clears up so much confusion people have about this topic. Those 300x multiple stories you see are almost always comparing two completely different income sources. You can almost think of it like a 3rd party is paying the CEO to run the company.

It is very easy to generate 350x value.

If you get 1% more work out of 350 people than the alternative.

It is very easy to generate 350x value.

If you get 1% more productivity out of 35,000 people than the alternative you have done it.

There are things that needs inner insights to understand and conclude anything meaningful. And there are things that can be judge by external insights alone, or even only from external point of view not being embedded in the system internal consideration while trying to emit the judgement.

We don’t need deep packet inspection to spot a very out-of-the-chart huge traffic.

We don’t need micro-details of an economical agent actions to spot an anomaly in wealth distribution.

CEO's definitely are underworking. Maybe not CEO's of publicly traded companies, though.

Empty rebuttal. Consider adding more substance to your comment. As a reader I have no idea which of you is correct.

I hear you, but this isn't my day job.

Arguably CEO:s are administrators, not workers.

I would wager you could replace the CEO with a cardboard cutout and none of the employees, who actually produce the product which makes the company money, would notice.

You could probably get away with it for months, honestly.