[danbruc]

Would there be an article talking about Pfizer raising drug prices if they increased the hourly salary of every employee by $0.06? I seriously doubt it, but that amounts to the same $10.3 million [1]. The amount is insignificant when compared to the revenue of the company. The real story is how a certainly class of people managed to convince all the relevant parties that their work is a hundred times more valuable to the company than that of everyone else.

[1] 96,500 employees, 240 working days per year, 8 working hours per day

[ams6110]

> how a certainly class of people managed to convince all the relevant parties that their work is a hundred times more valuable to the company than that of everyone else

Well, because that is the case.

A line worker in a Pfizer manufacturing plant, can (within reasonable limits) be just about anyone, given necessary training.

The CEO can't be just anyone. Therefore he/she gets paid more.

[danbruc]

That is the point that I doubt. Sure, it is certainly easier to find someone for the production floor, but I see no evidence that CEOs have such exceptional skill sets that there wouldn't still be millions of people who could do the job.

But even if that would be the case and people with CEO skill sets would be extremely rare, I would still have a problem with CEO compensation because then their compensation would be, so I argue, based on demand and not value provided for the company. The success of a company depends on all the people working together, without CEO the people on the factory floor don't know what to do, without the people on the factory floor the CEO doesn't get any product out. Neither party gets to claim that they are a hundred times more important than the other one.

Even if you agree that the compensation is mostly driven by scarcity, you will of course tell me that that is just how markets work, if good CEOs are rare and in high demand, then I will obviously have to offer a lot of money to get a good one. And I agree with that insofar, that this is how it currently works, but I consider it flawed. I would like to see, at least in some situations, prices not influenced by scarcity. If you now want to point out that this would ruin market mechanisms, that without scarcity increasing prices we would lose an important signal hopefully increasing supply, I also agree with this.

If I had a finished solution, I would have written it up and collected my Nobel prize in economics years ago. But that doesn't change the fact, at least in my opinion and at least in some situations, that prices are used for both, to measure the value something provides as well as how scarce something is, and that this link is sometimes desirable and sometimes not.

[aries1980]

It is hard to see what is happening behind the scenes. Such a mega corp needs top officials with good political connections around the globe and wide range of network with corporations at such size. Such relationship is the scarcity, not the character business or industry vision.