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hardnox
Advisor

Econ 101

http://ritholtz.com/2016/05/gap-ceos-workers-much-bigger-realize/

 

"If you pay CEOs $12.5M, you'll have fewer jobs."

 

Actually not a dollar for dollar shift. If the average SP500 company is trading at an 18 multiple and CEO comp is determined by stock value, that might amount to $100M in payroll.

 

And of course when there's a downturn the companies that have been loaded with debt to buy back their own stock will begin the massive losses.

6 Replies
Canuck_2
Senior Contributor

Re: Econ 101

I do not see Canada in that list but know from past experience that a Canadian manager got a lot less than a manager doing the same job in the US.

What they looked at was the difference in managers pay to what the average worker he/she was in charge of and the difference was small in Canada compared to the difference in the USA.

 

i think a lot of the 'problems' in a society come from the inequity, where there are some with hugh wages and others with less than enough to live on.

 

Those left looking on eventually get fed up and stuff happens, not always nice 'stuff' if the right things do not change.

 

Look at history around the world.

r3020
Senior Advisor

Re: Econ 101

Survival of the fitest. This is what you get when you erase morality from society. Now I guess we need another government program run by 1,000s of high paid workers to decide how much CEOs are to be paid. Well guess what, their pay will increase.

Red Steele
Veteran Advisor

Throw in some more progressivsm, too

might as well screw the savers, too....who needs them? Not sure if it was Econ 101 or one of my more advanced business courses.

 

“There are men regarded today as brilliant economists, who deprecate saving and recommend squandering on a national scale as the way of economic salvation; and when anyone points to what the consequences of these policies will be in the long run, they reply flippantly, as might the prodigal son of a warning father: "In the long run we are all dead." And such shallow wisecracks pass as devastating epigrams and the ripest wisdom.”
Henry Hazlitt, Economics in One Lesson: The Shortest & Surest Way to Understand Basic Economics    

hardnox
Advisor

my fingers are tired

I've been thumbing through my history books and can't find that golden era where people were moral and there weren't plenty who would take every bit of wealth and power they could.

 

Can't even find one where there weren't a few who would behave genocidally, or where people were so moral that they wouldn't follow them in those pursuits if properly incited.

BA Deere
Honored Advisor

Re: my fingers are tired

The people never were moral by choice in past history, they were moral by the necessity to survive.  Today with the safety nets, you can whore around and Uncle Sam picks up the tab for your "red spot weinny rot" medicine.  You don`t have to go to work, you can watch cartoons, smoke dope and bang everyone that comes into your appartment.

 

In the past if you were a man, you had to work or you wouldn`t eat, if you were a woman, you had to take care of your one gainfully employed man or you`d starve.  Cold hard economics has a way of keeping people moral.

tomexrepub
Senior Contributor

Re: my fingers are tired

I hope your house has carpet everywhere BA.  Hate to think your barefooted and constantly pregnant wife could get a splinter in her feet as she is walking around naked. Do you at least give her an apron to keep the gease from the stove from splattering over her skin?