[sudosysgen]

CEOs are employed by the board, the board is made of major stockholders, those are pensions funds and other investors mainly interested in stock prices. No need for conspiracy theories or pitchfork waving, it's just all working exactly how it's openly designed to.

[cced]

You guys keep saying pension funds. Where are the sources that financialisation sucking us dry is because pension funds need to get seeded? We’re living in a time of record profits and ceo to worker pay ratio through the roof and you guys are implying pension funds, the little to last thing workers have, as the issue?

Gee I’m wondering what we should all be thinking and doing about those pension funds and who that would actually serve.

Y’all get that most of us don’t have pension funds, right? They’ve been gutted long time ago. Defined benefit to defined contribution ring any bells?

But yes, let’s fight against the other plebs that have things we don’t, let’s blame pension funds and not the plethora of other issues.

I tell ya, we’re funding pensions alright but it ain’t the teachers kind.

[eitally]

You aren't wrong, but it's not reasonable to hold such a strong opinion without experience. I spent 15 years working in high-tech manufacturing, at Sanmina, which - like many peers - also offshored the majority of capacity. What remains in the US is mostly manufacturing for regulated industry (military, medical).

Take a look at this, re institutional ownership: https://money.cnn.com/quote/shareholders/shareholders.html?s.... 95% of outstanding stock is owned institutionally, which is pretty normal in manufacturing. For decades, this has been a core investment sector for pensions and other institutional funds, and remains so, even if it's just to balance investments in tech, biotech/pharma, retail/CPG, financial services, the military industrial complex and transportation. Moreover, if you attend quarterly results calls, you typically end up with a few analysts from banks and at least one from some pension fund, who ask questions. We young people may not care about pensions as almost none of us will have one, but they still exist and still influence large pieces of our economy.

[michaelt]

CEO pay is certainly way too high, I agree.

But look at any big corporation, take the CEO's total compensation and divide it by the number of employees. The CEO of IBM earns an obscene $16.5 million per year - but divide that by IBM's 288,300 employees and it's $60 per employee per year. Wal-mart's CEO makes $25.31 million, but it's only $12 per employee per year.

Even if we redistributed the CEO's entire salary to workers, $60/year isn't going to do much to close the gap between rich and poor.

[yterdy]

This is quite an arbitrary metric.

[CoastalCoder]

I find GP's metric useful.

It helps address the question: wouldn't the company perform better if we did other things with that excess money?

[yterdy]

>wouldn't the company perform better if we did other things with that excess money?

Of course. That's not what CEO pay/employee does, though; it trivializes the massive (over)compensation by putting it in seemingly-small terms. What we need to be analyzing CEO pay in terms of is 1) How much a person needs in order to live decently and with dignity in one's particular area, and 2) How much better than the "average" CEO any give one performs (to determine incentive pay). Certain entities, institutions, and groups have cartel-ized executive positions as a class and bid up their compensation, decoupled from real value.

Another view: $60/employee doesn't seem like a lot, but if you remove the employees making over the median, or $100k, or some other resaonable cut-off, something tells me that the lowest-paid employees would see a meaningful increase in their take-home. GGP is purposely being reductive in a way that makes rethinking the issue more silly than it actually is.

[klooney]

Pension funds is shorthand for pension funds and other bulk investments for other people vehicles like BlackRock and Vanguard. A common complaint from people is that there's under ten entities that owns almost all of the major public firms. Matt Levine has very funny and informed takes on this sort of thing, ZeroHedge et al have conspiratorial ones, but it's a real thing.

[jnash]

Nope. CEO's tend to be on the board of each others companies, making sure that there is never any argument over CEO compensation.

[0xDEAFBEAD]

If you were a major shareholder in a company, would you favor a CEO who ran it into the ground?

[p_l]

If I am a faceless pension fund that is going to earn short term on this much better, and be free to walk away and do the same thing to another company?

Sure.

This is exactly the same playbook as with private equity - the point is to make the shareholders richer as fast as possible, and long-term strategies do not pay out as fast while possibly introducing longer term risks.

[SyzygistSix]

For short term profit that I can walk away with? That is very different from building long term value. Both are profit. One profits from creation and has long term recurring benefits, the other profits from extraction, which only happens once. Both building a fire and building a house profit from a supply of wood. But they are pretty different in terms of long term pay off.

[tharmas]

Please see the story of Jack Welch CEO of GE.

[0xDEAFBEAD]

Can you elaborate? Wikipedia says Welch took GE from a market cap of $12 billion to $410 billion over the course of 20 years.

[tharmas]

He destroyed the Company in the long run.

https://www.npr.org/2022/06/01/1101505691/short-term-profits...

[sudosysgen]

If I am a major shareholder, I would prefer a quick profit because I can then invest it somewhere else and have higher overall profits.