No, it hasn’t always been that way. Before the neoliberal view of the free market economy became so dominant, the unions had more influence, the management take was a smaller proportion of the total (by an order or two of magnitude), and everything wasn’t subordinated to maximizing shareholder profit on a quarterly basis.
When I was first employed (as a summer intern during college), I was BSing with some of the other interns and younger full-timers about how come some jobs payed better than others. After we beat the pee-wadding out of the subject, we concluded that you get paid for (correct) decisions. I have never found a reason to change that conclusion (though I have added a couple of “except for”s)
Shareholders, of course, don’t get a wage: They get paid for loaning money to the company. In most company bylaws, income must be first used to pay legally binding debts (paychecks are one such) and then to pay the shareholders. The board probably decides how much profit to pay that way and how much to retain for growth. Bonuses come out as part of the “legal debt” calculation because top managers have contracts with bonus clauses.
Most times, the board members get paid (very well, if counted by the hour) for attending meetings, but not much else. They may (should, imo) be shareholders, though, so they participate in whatever the shareholders get. Of course many top managers are also on the board, and will have gotten their salary and bonuses aside from board membership.
walkingmancomics almost 5 years ago
As always has been.
martens almost 5 years ago
No, it hasn’t always been that way. Before the neoliberal view of the free market economy became so dominant, the unions had more influence, the management take was a smaller proportion of the total (by an order or two of magnitude), and everything wasn’t subordinated to maximizing shareholder profit on a quarterly basis.
https://www.project-syndicate.org/commentary/increasing-inequality-economic-political-risks-by-jayati-ghosh-2019-07
Or see “Can American Capitalism Survive?” by Steven Pearlstein, 2018, St. Martin’s Press.
Concretionist almost 5 years ago
Simple, but imo wrong.
When I was first employed (as a summer intern during college), I was BSing with some of the other interns and younger full-timers about how come some jobs payed better than others. After we beat the pee-wadding out of the subject, we concluded that you get paid for (correct) decisions. I have never found a reason to change that conclusion (though I have added a couple of “except for”s)
Shareholders, of course, don’t get a wage: They get paid for loaning money to the company. In most company bylaws, income must be first used to pay legally binding debts (paychecks are one such) and then to pay the shareholders. The board probably decides how much profit to pay that way and how much to retain for growth. Bonuses come out as part of the “legal debt” calculation because top managers have contracts with bonus clauses.
Most times, the board members get paid (very well, if counted by the hour) for attending meetings, but not much else. They may (should, imo) be shareholders, though, so they participate in whatever the shareholders get. Of course many top managers are also on the board, and will have gotten their salary and bonuses aside from board membership.
jvscanlan Premium Member almost 5 years ago
Visual of the Dow Jones Average