Ted Rall for November 24, 2014

^^^ funny stuff Clarky.So because you live with Mom at 40 and like you have said, don’t work, nobody else should work hard to be successful……… OK

No offense, but this a good conglomeration of about half a dozen Dilbert cartoon themes.

Sadly, this is too true to be funny. There has been a ridiculous vicious cycle of CEO pay increases in the US over the past couple of decades. (Yes, specifically the US. Not true elsewhere in the world.) Once it goes up, of course it can’t go down, can it? And boards of directors, who already own responsibility for placing the CEO above all else, and are now personally responsible thanks to Sarbanes-Oxley, are willing to pay whatever they have to in order to get someone they think reduces the risk to the company.Since it is certainly true that a given CEO can be the difference between a company succeeding and failing, this perception of the CEO is crucial is understandable. However, they are often using pay as a proxy for capability (as noted above), when some CEOs have just managed to move on fast enough to leave their mistakes behind. Or even not – my favorite example of a disastrous CEO is Bob Nardelli, who went from one of the possible successors to Jack Welch at GE to nearly destroying Home Depot (they wound up paying him $200 million to GET RID of him, which summarizes the problem with executive compensation these days) and then not improving Chrysler.American business is not so successful that it can justify the differences in pay over other companies. The ratio of CEO pay to median salary for all other employees (CEO versus average employee, in other words) is 22 to 1 in the UK, 12 to 1 in Germany, and 400 to 1 for the US. No way US CEOs are 20 times better than their UK counterparts – and I speak as an authority on this point, since executive assessment is my area of expertise. (http://work.chron.com/ceo-compensation-vs-world-15509.html)And indeed CEO pay has increased way faster than workers, to Ted’s other point – American worker pay has declined in real terms despite increase in productivity. That means people are working harder for less money. Productivity is something that CEOs get paid to achieve, but they are doing it on the backs of their employees, which is not necessarily a good strategy. (Costco versus Sam’s Club, for example: Costco is doing a lot better, and they do a better job for their employees.)Interestingly, people do not know these numbers. A recent study by Kiatpongsan & Norton (Perspectives on Psychological Science, 9:6) found that when you ask people around the world about the ratio in pay between CEOs to unskilled workers, they estimated 30:1 and preferred 7:1, whereas the actual ratio is 354:1. In other words, most people surveyed (n = 55,238, not a small sample, and 1,581 in the US alone) thought CEOs were massively overpaid — but had no idea that the actual ratio was an order of magnitude greater still.So clearly the CEOs are not convincing the workers of their worth, which to me is an interesting indicator of their actual success.The real question is how to normalize this, as CEOs are often in a heads-I-win/tails-you-lose situation: when revenues go down, they pay for a CEO who can fix it; when revenues go up, they pay for a CEO who has made it happen.And research does show that someone too separated from their workers is not as effective in understanding the needs of those people.

Economists Say We Should Tax The Rich At 90 Percent.

motivemagus great comment! We Americans are too focused on star power. We seem to want the silver bullet to solve all the problems rather than really understanding what is going on and doing the hard work.

Actually, I’d fire the current crop of idiots and then re-hire only half as many morons, pay them half as much and make them work twice as hard!

S49nav: Good grief, you’ve lost all semblance of sanity and flown off into crazyland.

Let’s cap how many kids people have too!There’s no reason a couple needs more than 1 or maybe 2 kids.We’ll ask China for tips on how to enforce these new Wage and Kid caps.

{rant}

The issue here is the way the law is set up, that the CEO is committed to increase the share price of the company. However, the share price is not tied to the value of the company, but to the quarterly reports.

So if a CEO makes some investments to ensure long term stability, it will show up as a lower income for a quarter, which means that the CEO is doing a bad job.

If instead he sacks a bunch of grunts, raises the product price or cuts corners in the manufacturing, his quarterly profits go up and he’s a good CEO.

Fundamentally, American CEO’s are being paid to do a bad job.

{/rant}

1. “moron” is higher I.Q. than “idiot”.2. North Dakota in ’09 was 646 K population, and 4.3% unemployment as oil workers flooded in. New York had 19.5 million population, and 8.8% unemployment.

Basic math, how many actual jobs do you have to fill in a population of 646K people, as opposed to how many jobs to you have to fill if you’re working with 19.5 million potentially employed?

Those who point to North Dakota’s low unemployment rate, don’t want to point out that number of jobs wouldn’t affect New York’s rate very much.

But oil company CEOs remain at the top of the heap.

“communist dreams again?”Communism: The Republican boogieman since 1917.

We should start by firing all politicians and replacing them with a STOP sign. Then move on from here. CEOs don’t cost me much money. Congress and state and local governments are KILLING me.