I was having a discussion (argument) with friends.
I was explaning how savings is what's needed to make a company profitable. Therefore, high taxes on corporations prevent capital and reduce production. It's about making more for less money that important.
I also told them about other things as well (problem with taxes, inflation, government getting in the way, yada, yada...), but one argument I had a hard time answering was, "CEOs get paid x350 the average salary. That's messed up. It used to be x50."
My comeback for that was, "...And how many of those companies with CEOs making x350 time the average gets subsidies and bailouts, and have lobbiests that makes laws that benefit them and not for others? Also, in a truly free market with many companies competing against each other, do you think all of them can have CEOs with x350?"
I did conceed that, that x350 is pretty messed up. Also, I'm not sure if my comeback was correct. I think it is, but I also pulled it out of my ass.
What happened? This isn't suppose to be, right? I do think there's something wrong with x350. Even worse, if they drive the company into the ground, he gets a fat severnce package and others get pink slips.
If it`s a limited liability company, it might be the CEO who ends up being responsible for potential damages caused by the company.
Johnny Doe has a point about limited liability, but that usually referrs to the stockholders, of which the CEO is usually one.
However, first I think you should examine your objection to a CEO getting paid much higher than the average. Is it an objection simply because it is so high? If so, that's an arbitrary position, one could merely object that x50 is "too high" or x10. If, instead, you object to CEOs making such high salaries because they enjoy legal protection from the State, barring them from competition, then you're talking.
Why would a CEO running a company into the ground make such a large profit? What keeps this going? In part, it's the government bailing out the companies that fail. Furthermore, companies might finally realize that letting CEOs off the hook at the end creates a moral hazard.
I do think there's something wrong with x350
1) That figure might be artificially high due to the government subsidies you describe.
2) There's nothing wrong with earning tons of money.
3) Average CEO salary (of top guys) is not 350x:
http://blog.aflcio.org/2011/04/19/2011-paywatch-average-ceo-salary-11-4-million/
http://www.thedailybeast.com/cheats/2011/04/10/average-ceo-salary-96-million.html
Say an average of 10.5 million per year. Average worker salary is 40,000 (actually more). That is less than a 250x difference.
4) The factor has been decreasing:
http://www.aflcio.org/corporatewatch/paywatch/pay/
The highest was in 2000. Why?
5)
Even worse... pink slips
Then don't buy from those companies. Don't work for them. There's one thing that's more effective than regulations and certainly more fair - the free market. Use it.
6) Remember, there is no upper limit to salaries. There is a lower limit.
7) Let's look at some nice figures.
Assume that I earn $1 million per day. That makes 365 per year. Assume I live 100 years. That makes $36.5 billion in a lifetime. Bill Gates has made much much more.
Bill Gates has money than you would if you earned $1 million per day. Let it sink in. Per day.
But wait, what is this?:
In 1999 his wealth surpassed 100 billion! He was at the time 43. Assume he started earning money at age 13. That makes 100 billion/30 years / 365 days per year = $9 million per day of his life!!!!
The average wage per year in 1999 was about $27,000. So the average that these employees make is $74 per day
The factor there is 120,000x.
So yeah. As I said, no upper limit to salary. If you don't like it, don't buy from these companies! You created the beast. You can drain it of its strength.
"If you don't like it, don't buy from these companies! You created the beast. You can drain it of its strength."
Can't help it. The GOVERNMENT props these guys up. In a true free market, we wouldn't have these problems.
Regulations make it that most of DON'T HAVE A CHOICE in who we work for since so many of the jobs are destroid.
My whole argument is that GOVERNMENT is at fault and that's what causes all the problems we have, including the x350 (or whatever it is). It's hard to convince people because they get stuck on the x350...not that I'm for that. It's government that makes it so.
I wouldn't be against it if a company made their money through a free market, like Apple for example that has a less regulated industry than others.