Ratio of CEO Pay to Average Worker by Country

Stellar statistics table from my friend Matt of the ratio of the average pay of Chief Executive Officers (CEOs) and average workers:

So far as I can tell the CEOs concerned in this comparison are those of largest public companies: in the case of the US probably the Dow Jones Index companies, but anyone who can tell me the original source and therefore definitions etc of this would be helping us all. We like to provoke debate and certainly don’t think what we post doesn’t need contesting. In fact the contesting is the whole point. So contest away and thanks to @Jeigh below in comments for asking.

See Also The Economic Pyramid posting at http://creativeconflictwisdom.wordpress.com/2011/11/20/economic-pyramid/

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About creativeconflictwisdom

I spent 32 years in a Fortune Five company working on conflict: organizational, labor relations and senior management. I have consulted in a dozen different business sectors and the US Military. I work with a local environmental non profit. I have written a book on the neuroscience of conflict, and its implications for conflict handling called Creative Conflict Wisdom (forthcoming).
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175 Responses to Ratio of CEO Pay to Average Worker by Country

  1. enermazing says:

    I’m surprised at the, comparatively, moderate pay for CEOs in some countries; I would have guessed it’s more. Are bankers’ bonuses and such included?
    Search engine results for “top footballer wages” are quite interesting, too :twisted:

  2. @ enermazing. Thanks for the comment. From what I hear, in Japan it would be a thing of great shame for a CEO to draw so much more in pay than an average worker! Not sure about footballer’s wages: pretty high but apart from Beckham, I guess they are not CEOs :)

    There are of course other sources of wealth and inequality. Gini Index is one of the measures of the latter and you can see it for different countries at: http://en.wikipedia.org/wiki/List_of_countries_by_income_equality.

    (Gini Index of 1.00 Bill Gates earns everything. Gini Index of 0.0 everyone is equal.)

    • theonlyrepublicanonthissite says:

      this income equality stuff irritates me, if i work harder than joe, am smarter than joe, made better decisions for joe, i damn well better be makin more money than joe!

      • @theonlyrepublicanonthissite. You don’t understand the point. No one here is saying harder,smarter whatever should not earn more money. I worked in manufacturing up to senior levels all my career. I earned more than a line worker, rightly in my view, because I helped run the whole system and a mistake I made could cost a lot of money. I was on call 24 hours a day if anything went wrong. Fine, I earned say six times what a line worker earned for my extra effort, experience, expertise. I did not earn or warrant 100 times what a line worker earned. And smaller differentials is how the US was up until the 1980s, and most countries in the world still are. That is what the table is showing…reasonable income differentials for harder work, bigger responsibility.

        But when the market for CEOs gets rigged by CEOs all sitting on each other’s compensation committees (and I have worked in executive pay department too so I have seen it first hand), they inflate the pay to hundreds of times what the basic worker earns for no reason other than they are all ‘pigs at the trough’ and the shareholders (of which I am one for many companies) get no value add for this inflated pay.

        And the CEOs and other senior executives pay themselves that money even when the company loses money. They also use Wall Street to basically skim money from the real economy, from manufacturing, from small businesses, into Hedge Fund managers pockets from the real businesses. They use banks to rip off the taxpayer in bail outs and get very rich in the process at our expense. They tax capital gains for hedge funds at 15%, while earned income on wages and small businesses pay much higher rates of tax.

        What makes all this possible? What Party allowed all this to come to pass? What Party prefers to blame working people for our problems. Well I personally think it is the Republican Party, which even more than the Democratic Party (and they are not clean on this either) is in the hands of the rigged rich, the CEOs on big bucks, and Wall Street. The Republican Party pretend to care for small businesses, but when was the last time they did anything for them? The Republican Party is in the hands of K Street lobbyists for the energy, banking, and other major corporate sectors.

        What do you think? Or are you fooled into thinking this is about you versus folk who work less hard? Time to think for yourself, argue with me by all means, but get out from under the Republican illusions about inequality as something that isn’t screwing you too. Respectfully. And of course, we will publish your reply here as we do want to hear from different arguments. We believe in seeing all sides of the case and arguing with them to get better insights.

      • luvci75 says:

        More money? Sure, you deserve it! Now, 400 times more money? It’s inmoral. I bet you CEOs aren’t 400 times smarter, better educated, harder workers, or better decision makers than the average worker.

      • @luvci75. Absolutely. I know a lot of CEOs paid big bucks and only one of them was worth much. Thanks for the comment.

      • Naomi Lazarus says:

        I realize this was posted over a year ago, and you’ve probably forgotten all about it, but I just came across it and I wanted to just put this forward, as a thought.

        If your CEO makes 475 times what you do, that means that he makes the same amount, in a single day, that you do in two years.

        And this isn’t just _one_ day. _Every_ day he makes the same as his workers do, in two years of labour. Now… what I want to know is… what could a person possibly do, in a day, that is as valuable as what any other, working person does in two years? Is he saving lives? Creating world peace? Discovering perpetual motion? No. In most cases, he’s putting in between 8 and 16 hours of meetings and flights around the country, business calls and emails. Keeping things moving. And is that important? Of course! Thousands of jobs may depend on him, as well as essential products that need to be made available to his customers. If he screws up, it could have a serious impact. Absolutely that’s important.

        But… if he makes the same amount, in a day, that you make, in two years, then he makes the same amount, in two years, that you make your entire working life. Think about _that_. Think about 40 years of paychecks, groceries, gas in your car, a mortgage, car payments, your kid’s college tuitions, dinners out with your wife, vacations, techno toys, pets, prom dresses and cleaning supplies… an entire lifetime of a reasonable, normal, average family’s income and outgo, in two short years.

        Now… let’s assume our CEO wasn’t born that way, and it took him a few years to get to his exalted place. Let’s assume, for the sake of argument, that he’s only making 475 what you are for the last twenty years of his career. So… in that twenty years, he makes ten times what you do, in your entire life. Plus, of course, his hedge funds, his shares in the company, his golden parachute, and, of course, the fact that he pays 1/10th the income tax you do.

        That’s a LOT of money. That’s not “a nice, well-earned life”. That’s not a Park Avenue apartment and a house in the Hamptons and a yacht. That’s more money than he could ever spend in his entire life, and more money than his kids could spend and their kids could spend… At a certain point, the accumulation of wealth becomes something beyond… ambitious, or even selfish. Because once you have all the material things you could possibly ever want, accumulating more wealth doesn’t even benefit you. It becomes completely meaningless.

        And, when 40% of your fellow countrymen are at or below the poverty level, when schools and social safety nets are being cut, when the middle class is paying ten times the taxes you are, and there’s still not enough to go around… it seems to me like a kind of insanity. And… treason, to be blunt. The 1% of Americans are destroying the American economy, and the country is being damaged by it.

        I went to the IRS website, last fall, and looked up their income tax numbers for 2009 (which was the most recent year posted). I noticed that the tax bracket that pays the highest percentage is the middle class; the $100K-200K range. Anyone whose income is higher than that pays a lower percentage. So, I applied a little fifth grade math to those numbers, calculating how much more the federal government would bring in if they simply taxed those who make more than $200K a year at the same rate as that middle class range (which was 24.5%). The increase in revenue, from simply taxing the wealthiest Americans at a fair rate, was over $1.2 trillion dollars a year. Here’s my math:

        US income tax numbers

        This is not a matter of “working harder and smarter”. The rules have been twisted around to benefit those who twisted them.

      • @Naomi well and eloquently put. This is both a moral issue of social justice and a practical economics matter: most CEOs in my experience are deeply mediocre and don’t deserve massive multiples of their average workers pay. Thanks for your interest on a posting that recently received 10,000 hits in one day so your comment will be read.

  3. Jeigh says:

    I’m curious (I posted this picture on Facebook and have quite reasonably been asked). If an “average worker” makes, say, $25,000, then a US “CEO” would make, on average, $11,875,000. Clearly this would be way out of line if you include CEOs of smaller and medium sized businesses.

    How do you constrain the field of “CEOs” as pertains to the above graphic?

    • I will try to check the source. Good point. I assume it is probably 10% biggest companies or something like that. Will post when I find out. Thanks Jeigh.

      • Jeigh says:

        Thanks. As I say, I got challenged (reasonably) when I posted the graphic, and of course it also caused me to want to validate the stats.

    • @Jeigh. I found the source: http://imgur.com/gallery/IkE22, but it doesn’t satisfy my need or your need for definitions etc.

      So I searched elsewhere and found this which suggests the number is probably the CEO’s of the companies that make up the Dow Jones: ‘Since the median worker’s pay is about $36,000, then you can quickly calculate that CEOs in general make 100 times as much as the workers, that CEO’s of S&P 500 firms make almost 300 times as much, and that CEOs at the Dow-Jones companies make 550 times as much.’ But as it is not exact, it is not the source for the table above which I will continue to try to track down. This was my source for the quote above, that seems to have some good stuff in it, but I can’t vouch for it:

      http://sociology.ucsc.edu/whorulesamerica/power/wealth.html

      • Iuncta Iuvant says:

        This is the website of senior scholar, political sociologist Bill Domhoff, whose career has been primarily devoted to empirical (primary and secondary historical documents research, government and corporate documents research, and social networks research) studies of elite class politics and policies in America. His work is extensively peer-reviewed and published, and is solidly valid and reliable. As an educator, he created the Whorules website a few years ago for people who want to teach themselves to do social networks research.

      • @luncta luvant. Thanks I now see you are referring to the URL above. Thanks for the interesting information on its reliability. Best Wishes.

    • Sarah says:

      Just found this stat on Fortune 500 CEO’s. So, yes, not small to medium sized businesses, but inline with large corps. http://www.aflcio.org/corporatewatch/paywatch/

  4. Ola Kamel says:

    Very interesting. Does anyone know whta the source of this table is??
    thanks!

  5. mjamieson says:

    could not source the stats above but it looks like they might be a little dated. I was able to source these and the picture looks a little wAverage World-Wide CEO Compensation as a Multiple of Average Employee Compensation in 2000
    Country Year 2000 CEO compensation as a multiple of average employee compensation*
    US 531
    Brazil 57
    Venezuela 54
    South Africa 51
    Argentina 48
    Malaysia 47
    Mexico 45
    Hong Kong 38
    Singapore 37
    Britain 25
    Thailand 23
    Australia 22
    Netherlands 22
    Canada 21
    China (Shanghai) 21
    Belgium 19
    Italy 19
    Spain 18
    New Zealand 16
    France 16
    Taiwan 15
    Sweden 14
    Germany 11
    South Korea 11
    Switzerland 11
    Japan 10

    Source: Towers Perrin & Finfacts
    (*Employee compensation used to calculate these averages were those working in industrial companies with about $500 million in annual sales.)

    • Mike from Shreveport says:

      It seems that only using averages for those working in industrial companies with about $500 million in annual sales would skew the data quite a lot.

      • @Mike from Shreveport. I am sure it does but perhaps not on the scale of such order of magnitude differences. And of course, the US used not to be like this; in the 1950s successful companies had ratios close to what the table shows the rest of the world now has. What has happened is that CEOs sit on each other’s compensation committees and in effect rig the market, aided by the illusion shareholders are paying for results. There is little correlation between real results (not stock price manipulation to drive stock option rewards) and executive pay. Get great results and it is all down to the CEO; get lousy results and the CEO has to be a paid a lot to retain him/her….all bs in my corporate experience. I have known two exceptional CEOs of massive corporations; the rest seem nothing special….

  6. DJ Nash says:

    I, too, was asked for sources when posting this. Here’s what I responded with- I couldn’t track down the exact source of this chart but I found this page from the U of Cali. See figure 8 to see the comparison between U.S. CEO pay vs. ave. worker’s pay, all the way back to 1960, when CEO pay was 42.6 times higher than that of the average worker. Between 1960 and 1970 the figure more than doubled, but then reversed back down to about the same by 1980. Then an upward trend began, which has not since reversed itself. The disparity peeked at about 531 times that of the average worker in 2000. The 475 figure shown in the chart above comes from 1998. Since then the rate has had a couple of turns, once even dipping back to just below a 300 times difference, but you’ll notice that the upward curve has continued. When reading these line charts, as long as the line connecting the bounce back points remains unbroken, (the lower points in an upward trend), then the trend continues. The latest figure was a 344 times difference in 2007. For Europe at large it was a 25.1 times difference. That’s not shown in the chart, but mentioned in the text either right above or right below it. Lots of interesting stuff here on income disparity, such as the fact that although ceo pay has risen 298% JUST SINCE 1990, (and at times to much more than that but this is the latest numbers for that chart (chart 9) from 2005) worker pay has only increased 4.3%, and the minimum wage adjusted for inflation (as are all numbers on the chart) actually dropped by 9.3%. There’s much more great info on this page.
    Here’s the link – http://sociology.ucsc.edu/whorulesamerica/power/wealth.html

  7. tony Gee says:

    I have several questions. And comments.

    Please define worker? Is the worker everyone out side the CEO, just hourly employees or what?

    Another Question would it not be best to compare the CEO’s income to that of the employees of same company or at the least like industry. Example CEO of a pharmaceutical company Merck Richard T. Clark made in 2006, his salary only $1.2M yet total comp $10M with $2.4M in stocks. A ratio of 475:1 that would put the average employee at $21K. I am guessing but the avg. employee of a pharmaceutical co. like Merck makes over $100k that equals less then the100:1 ratio. Remember the value of stock is at the time he received the stock and the IRS does not consider that income until the sale which is usually well into retirement or put into trust funds and he will never see any of it.

    In 2006 Bank of America CEO Kenneth D Lewis made $1.5M salary total comp $25 M but keep in mind $11M of that was stock which at the time was going for $55 a share and today’s valued at $6 that is a loss of $49 a share or equal to a loss of $9.8M. According to the IRS he never made that $11M until it is sold. So are the numbers scud to fit the narrative? You bet.

    I owed both Merck and Bank of America stock in 20006 and still have the Stockholder information sorry I do not have more recent info but I am sure any one could look it up and compare.

    What about other industries like restaurants, car, retail……some of these will be interesting because the goods come from overseas how will you translate that.

    Example Nike. The marketing department (I’m guessing) has the biggest budget, look at how much they pay the athletes to advertise are the athletes employees/workers? The shoes come from China my guess cost $5-20 to make and sell for $80-200. All the money goes to the athletes, sports franchises and TV networks and we buy the shoes and support the injustice or what some call injustice.

    My point it is easy to make general statements, pant a picture using a wide brush, but the picture comes alive in the details, I hope I have helped. And your comment.

  8. Kyrie Eleison says:

    The information from the UCSC study is fairly close in line with the data for the U.S., and is based on a little more than just guesses, which is a lot more credible and reassuring. Also, the section regarding Woolard is fairly shameful and represents the true face of corporate America. I remember watching an interview with Jack Welch, when asked about the hows & whys for CEO bonuses, and it was one of the most blatantly evasive and smug responses I’ve ever witnessed. Are these the kind of people we admire and want to be like someday… ? Give me a break. It’s time to call a spade a spade.

    • @Kyrie Eleison. Thanks for the info. Though I share you view on many CEOs personally, what is really broken is systemic. We have created a very unequal, non value add, wasteful, non sustainable society and are paying these folks massively for their mistakes and self seeking. Morally they may be bankrupt, but it is morally and practically bankrupt system that makes them possible..

      • Kyrie Eleison says:

        And how did this system come to be? One could make the argument that this is the product of The Century of the Self (to borrow from a popular documentary). Have the morals of this country been in decay for quite some time? You bet. Consider the motivation behind wanting to transform a society from one of family values to one that is individualistic and increasingly anti-social. If most people were just naturally born this way, there would be no other cultures or periods of history to contrast this phenomenon. The disparity in compensation on your chart would be *everywhere*. I implore you to ask the simple question: Cui bono? We could split hairs over specific details or events ad infinitum. Let’s look at the forest for the trees. Those who have engineered this culture are brilliant, and the results are no less impressive. Is there a difference between “public relations” and “propaganda”? A lot of people seem to think so.

      • @ Kyrie Eleison. I guess I think that what the elite group of CEOs and Hedge fund managers etc are creating is a new feudalism so that they and their families can ride the impending ecological and other crises in their gated communities and elite schools. They may be brilliant but I think that they are not, however, wise because no gated community, no castle will be any use if we don’t fix the major societal problems of which their unequal undeserved salaries are just one symptom.

  9. tony Gee says:

    I saw the chart on a newspaper blog I contribute too It made no sense to me as I stated before so I made it a mission to find the source. I found your blog by goggling, “the ratio of pay for CEOs vs. the average worker for the following countries.“

    I hope to be apart of this blog as time permits.

  10. Judy says:

    Regardless of the source, the manner of calculation, the size of the company, it still appears that the US is WAY out of whack.

    • @ Judy. Absolutely. I don’t think the comments on this posting are contesting the out of whackness, simply trying to nail it down a bit. Some folks like big picture and some detail and this blog celebrates such cognitive diversity. It is indeed out of whack! :)

  11. tony Gee says:

    Judy or anyone : We need to understand the numbers were they came from to understand what is wrong if anything. Numbers can be manipulated to fit the narrative to favor communicator so many can wrongly mislead the public.

    Example: Do you understand what the term “Unemployment at 9.1%” means? I know you have an idea what that means but is the calculation to come up with that number the same as your neighbors down the road, how does your state vs. mine, your city vs. my city, what about our federal government or any of the country‘s that one may compare? I have heard that our real unemployment is more like 28%. I ask you, how can that be? The answer has been reported, the individuals who have stopped looking for work and the people who no longer getting unemployment checks and the spouses who have lost their job but never applied for unemployment are not counted in the unemployment figure 9,1%. Ooops my daughter 22 yrs. old student at a state collage would kill me if I did not inform you that she lost her job and applied for unemployment here in Va. and she was denied benefits because she did not work the required amount hours. My nephew also in Va. was laid off and can’t find work he was denied benefits because the state said he did not file income tax forms and need more information he lives with his parents.

    My point is, are the numbers we all are looking at consistent to all of our own understanding of how the numbers are compared, calculated, and formulated? Would you agree that 9.1% vs. 28% is, “WAY out of whack?”

    Can you or anyone answer that question with the CEO’s income vs. workers ratio with surety?

    • @ Tony Gee. Great comment, especially about the unemployment numbers. There is a great website by John Williams at http://www.shadowstats.com which unpicks the real unemployment, inflation and GNP numbers you might like. And I am really sorry to hear about your daughter and nephew. They are indirect victims of the CEO incompetence as well as greed.

  12. tony Gee says:

    A excellent example is: The Wall Street sit-in, there is so many different opinions what the, “occupied wall street.” purpose is for.

    I see it as….Anyone who has a 401-K or government (teacher, street sweeper, county accountant/employees) retirement plan has money tied up in, “Wall Street.”

    Now apply that the anger expressed in the movement of, “occupied wall street” So we can all agree…… they are mad that we bailed out the banks and we are made that the government bailed out the banks.

    • @Tony Gee. My anger is not directed at the bail out as such, as by the time it happened it was unavoidable without system wide collapse. My anger as per my recent post on the causes of the crisis is directed in part at the banks who spent $3 billion lobbying to de-regulate the financial system, make derivative trading easier and stupider, repealed Glass-Steagall that had kept ordinary banking and casino banking separate since 1933, and had nil understanding of economic reality, bubbles or what the hell they were doing. Have you ever talked to a Wall Street banker? They are economic illiterates. And of course I am angry at Congress for passing this crap de-regulation in return for campaign financing. The bail out is way too late as a target for my anger…it is just the band aid on an already broken system. And of course the last 30 years and earlier of economic theory from Hayek and Friedman onwards set the scene for the idea that the market runs itself. Which is nonsense. There is no such thing as a free market; even the Colombian drug cartels create market structures. There are intelligent and stupid market structures and we opted for the latter. Big Time.

  13. Kyrie Eleison says:

    @creative:

    I agree completely. No matter how nice or luxurious it may be, any “gated community” designed to keep people out also keeps its occupants in. I’m not sure if this is a part of the plan – creating one’s own prison? I’ve seen a lot of rumors circulating around about the construction of a lot of hardened underground bunkers. There is an old military adage: “A cave is a grave.” Again, all of this is speculation, but if any of it is even a half-truth then there is certainly a deficiency of wisdom on someone’s part.

    Getting back to the figures: I must reiterate that unless someone can assert that the figures presented in the well referenced UCSC study are either manipulated or are not credible at all, then maybe I will consider a differing view. Figure 8 is somewhat less than the figure on your chart, but look at the trend prior to and then after 1990. At one point it peaked above 500x. Keep in mind that the data stops in 2008. Even the Gini coefficient from 2010 ranks us worse than an oppressive regime like Iran. Yes, that’s right – even the people in Iran get a better share than us. Not by very much, but wouldn’t you think it should be?

    I remember reading a narrative from an Australian citizen who had spent some time living in various developing nations, and upon visiting the U.S. it looked more like a banana republic than a nation that would call itself a superpower. Is it because the people here in America don’t work hard enough? In the ’50s a family could get by with one income earner and still have enough left over to save up for a better life. Nowadays, most families require two incomes and still depend on overtime or multiple jobs just to enjoy the same standard of living. Did the average worker suddenly become that much greedier than their parents and grandparents? I don’t think so. Here is some food for thought: http://www.tnr.com/article/trb/94938/wall-street-income-inequality

    Here is some more: http://www.secularhumanism.org/library/fi/britt_23_2.htm

  14. tony Gee says:

    Is this all about Greed?
    My Thoughts:
    As a teenager in the 70’s I loved professional sports however lost interest (mid 80’s) the pay to the players just was getting ridicules and leagues just became one big business that spills over into the advertising world with the use of athletes to promote their products The love of playing was overshadowed by the greed of money.

    As I have raised four children and when my two boys were younger they liked to watch the games, I found myself torn. We would go to the local Triple A baseball games can’t afford the ticket price and cost of hot dog and beverage at the major league fields. I value a hot dog at $2 tops, not $5 plus you find at those venues. I also don’t buy Nike shoes. Shoes has a value of $50-$60 not $120. I shop at Wal-Mart and Target.

    I wonder….What is the Ratio of High Paid Sports Figures to Average Workers?

    And what is the value that these high paid sports figures have on how many American workers are employed by them?

    I work in the restaurant industry and the dishwashers make $7.50 to $10 an hour with no benefits “the job no one else wants.” What about the high paid assembly line employee who makes with benefits $73 See http://blogs.payscale.com/ask_dr_salary/2008/12/are-ford-workers-really-paid-73-an-hour.html and then 70% of there pay when laid-off SEE http://http://articles.latimes.com/2009/may/10/nation/na-gm-furlough10…yes NOT working?

    What is the Ratio of Over Paid Unemployed Assembly Employee to The Average No One Wants that Job Worker?

    Sounds all like Greed to me, sure anyone can play the class warfare card. The one who makes $70K $150K can scream those dam CEO’s all the while others are screaming those dam rich people who make over $75K.

    Who cares!! The harder you work the more you get and that covers all aspects. It is painfully obvious to me that the contributors in this blog are well educated it shows glaringly in the writing. My writing is not so much. Imagine we all working and being paid for our contribution would we deserve the same pay? What would you think as I were a member of a union and received three times your pay?

    We can’t make someone else change we can only change ourselves. I am not a believer that the government can force people to change because that is all motivated by, you guessed it, GREED in an even more damaging way like power to tell us all what we can or can‘t do. But that‘s for another blog post.

    We plant our seed, water it with respect for mankind and our fruits will not be full of greed.

    • @ Tony Gee. Excellent points, especially about professional sports. I actually enjoy watching a lunch time game of basket ball in a New York park more than anything on TV. And an English village game of cricket. Far more interesting.

      As for the highly paid line workers in the auto industry, I negotiated with their unions and my only beef was that they did not work to improve productivity to justify the hourly wage cost. I am not talking about working harder (line work is hard I know from personal experience at 90 cars an hour), but working smarter, giving us suggestions to improve design for manufacture as the Japanese work force does. I do think that there should be large numbers of jobs earning say $40,000 a year so folk can raise families properly. But it takes great business folk and workers to achieve that, but does not need CEOs on 450 times average earnings any more than great sport needs such vast earnings either.

      I would certainly prefer that greater equality came without government involvement as happens in Japan. There is a great deal of shame if CEOs there earn too much so it doesn’t happen. They don’t need the government to tell them what’s right: social norms do. But absent this, some government role is inevitable. I would hope for a very much simpler tax code with no shelters, but I do think the over $250,000 should pay a higher rate as while some work hard for this, others simply benefit from rigged markets like Wall Street, and I do think capital gains should pay the same rate as your hard earned income. The problem with government is that it is corrupted by special interest groups and doesn’t stand for we the people.

    • PS Tony Gee On education, I have known people from many elite universities who seemed to have been taught what to think, rather than how to think. You think for yourself and that is true education, worth more than a Harvard degree, if the latter didn’t include the need for life long curiosity, learning from mistakes, self questioning etc.

      My late Dad left school at 14, but better foresaw the financial crisis years before it happened than armies of University of Chicago economists. He had curiosity and learned from anyone: homeless people, miners, farmers, car workers, musicians, bank managers, professors: anyone who knew things; most of them thought he had a degree in electronic engineering (his self taught field) when he didn’t have a qualification to his name. His life was life long learning. I try to follow his example, though I have more formal education, it did at least teach me to think not what to think.

    • Kyrie Eleison says:

      “The harder you work the more you get and that covers all aspects.”

      This is an extremely profound misconception and not only ignores observable facts but at the same time gives credence to the idea that those who do have more always worked hard to get it.

      Since the creator of this blog mentioned electrical engineering (and I am one also), let’s consider the case of Nikola Tesla. Anyone would be extremely hard-pressed to find anything they use in their everyday life that was not a direct result of his ideas and inventions. In fact, vast economic empires had been built upon the back of Tesla’s works. What became of this great man? I will refrain from editorializing and allow you to discover this for yourself.

      In the role of a sustaining engineer, a great deal of my time was spent collaborating with people on the assembly lines, who were almost too eager to share with me their ideas on what looked good on paper and what worked in the real world. The only value I was able to add was a solution that was both technically feasible and cost-effective. I suppose I could have just stayed in my ivory tower, being the super smart engineer that knows more than those uneducated fools, dictating policies and processes that were completely out of touch with any sense of pragmatism at all.

      If we can crunch the numbers in our favor, then it means that it MUST be not only possible but beneficial and if the results can’t be realized then it must be the labor that is doing something wrong. They are just being lazy, or they are stupid, because MY idea is so awesome.

      • Kyrie Eleison says:

        Continuing on with this logic, it is indeed a miracle that the entire world is not wired up for DC power distribution, as Edison envisioned it.

        We can go back and forth all day long, harping on things like greed, or “class warfare”, or whatever the soup du jour happens to be. It is this collective of stratified ideologues that seem to think that they know best and just want you to put faith and trust that their way is the best way to go even if many of the things they say fly in the face of history and reality.

        Coming full circle, I again have to agree with @creative that our educational system has gone from one of critical thinking and creative flourish to one of rigid indoctrination. Be careful, though, in making an inquiry outside of this rigid thought process. You might be ridiculed for asking a “gotcha question.”

        From the movie “Real Genius”:

        “There’s nothing wrong with that, but that’s all he did. He loved solving problems, he loved coming up with the answers. But, he thought that the answers were the answer for everything. Wrong. All Science no Philosophy. So then one day someone tells him that the stuff he’s making was killing people.”

  15. tony Gee says:

    So are we to change our culture or economy to that of another country or something new?

    I think NOT so many have the desire to come here to the USA in hopes and dreams of a better life then what they see in the native county! Why change because of a few bad CEO’s. Is there suggestions on this blog to change our Constitution as well? Yes we do have some problems economically but a over haul, like that of AC and DC electricity? I don’t thing so!

    The people who are citizens of USA and desire another counties culture or economy with hopes and dreams of a better life would it not be in there own best interest to became an emigrant and move there to fulfill the dreams of a better life? It is Okay to leave your home land many do it every day! Just as it’s Okay to give a two week notice and leave you employment to go work for anther company.

    We as a human race make life changing decisions daily if not weekly. I agree we can not force our own opinion as right and only way. It is our responsibility to communicate openly with confidents our ideas and opinions. Likewise we must open the blinds of our minds to the understanding of others opinion and ideas and yes the that light might change our own thinking and that can be scary specially when so many have be indoctrinated from parents, subculture, teachers, work environment and our failures.

    • @ Tony I think our culture and economy has changed beyond recognition in the last 100 years anyway. We have big corporations that can rig any market as Teddy Roosevelt feared they would via monopolistic power. And the only countervailing force able to counter their power is government, which is often largely bought by campaign contributions by said huge corporations. The top 1% of the population by wealthy have created a new inherited feudalism. They make getting the big paying jobs on Wall Street subject to going to elite schools, and they make sure their own kids get into elite schools via preference for the children of alumni and big contributors. George W Bush would not have made Yale in open competition, for example. I would not mind so much, but so many of their kids are idiots, arrogant, unable to think for themselves, or admit mistakes, and so Wall Street and my savings end up being in the hands of inherited position idiots.

      Another thing that has changed is social mobility. It is now much easier to rise from the bottom 20% by parental income to the top in Europe than here, even for native born. Immigrants still come here but many are top world talent already: Silicon Valley is 30% run by Indians for example. America is still a great place compared with poverty in Mexico or Somalia, but very few even poor Europeans want to come here because social mobility is higher there. Don’t get me wrong. I have the right to live in 20 countries, but I choose to live here because I like the feel and the encouragement to my business creativity. But for most people this is no longer as it was 100 or even 20 years ago. We are in the new feudalism of inherited privilege and it doesn’t work anymore, hence America’s problems. which are not in my view the fault of liberals or conservatives but simply hardening of the arteries.

      Your comments on opening minds are right on target, but as Europe found out long ago, inherited privilege tends to be very static and closed minded. I dislike all forms of indoctrination.

      • Kyrie Eleison says:

        @creative:

        I agree that there is a big difference between offering a point of view that is consistent with facts and observation and indiscriminate proselytizing (e.g. “the Protestant work ethic” and other religious tenets – there is a reason why there is no state-sanctioned religion, it would help if people would accept this).

        Maybe it would be a good idea to be completely honest with oneself about the merits of an idea before pushing it on someone else simply because it is in their own best interest.

  16. tony Gee says:

    With that being said I will now add this;

    I did look up Nikola Tesla and WOW never new of him thanks! I found this 7 min. video, http://www.bing.com/videos/search?q=Nikola+Tesla&mid=46A1144E0EC9AB79CCBD46A1144E0EC9AB79CCBD&view=detail&FORM=VIRE7

    Very informing I now understand it would indeed be difficult to go thru a day and not be impacted on his theories and inventions.

    It bring new meaning to the statement I made earlier;

    “The harder you work the more you get and that covers all aspects.”

    The key words, “all aspects.” Nikola Tesla worked hard in his theories and put long hours to accomplish what he did. The question might be, did the “long hours” consist of five, eight hour shifts in a week and took decade to come up with, or was it 5-6 days consisting of 12-18 hours and just a year or so before the invention was complete, my guess the later.

    Even thou Mr. Tesla did not accumulate the wealth and the notoriety (like that of George Westinghouse) in name and on the spreadsheet of a fortune 500 Company does not imply the guy was a bum nor does in indicate he was not a hard worker. On the contrary because of his hard work and his unwavering love for that work others were able to pick up were he stopped even if it was years later or yet to be done they fined toned the inventions manufactured them and we have what we do because of one mans harder work by the name of Nikola Tesla.

    With the understanding of Nikola Tesla vs. George Westinghouse, both left us all, without going thru a day with thanksgiving for their hard work, there is no disputing that. What might be different between the two geniuses possibly was the managerial ability to work oversee and run a company. And possibly there lies the difference in the two men monetarily speaking. Could Tesla name be on the spreadsheets of a Fortune 500 Company today. I don’t want to speculate, have not read much on the guy but my instinct tells me yes.

    Working hard reminds me of my children the two oldest where and are A, B students with very little struggles it just seem to come naturally. The others two has difficulties whether it is applying the learned idea concept or lack of desire distractions, they must work harder and by doing so can and have received A’s they fall in the C, B category. If they did not put in that extra effort they would be C, D students and never would have seen the A’s they can get. Harder work does pay off ! Yes I will agree harder work is also neglected but that is part of the game of life it is ones corrector that shine in the mist of adversities.

    • @ Tony Gee. Birth order is an interesting issue. Apparently 80% of students who get to Harvard are first borns. I don’t know why but it might suggest that the ability to work hard may be something that is affected by birth order as there is no comparable difference in IQ due to birth order.

      • Kyrie Eleison says:

        @creative:

        Regarding birth order – Some parents might prioritize the bulk of their investment into their first born and may be driven to see them succeed more due to this additional investment. Children that follow may simply be viewed as backups, in the event that the first one fails. It’s just an idea that I’m throwing out there, and is written in a totally speculative manner.

        The only other thing I will add is that I am the youngest of three children in my family, and I am the only one with any higher education at all so I suppose I fit into the 20%.

    • Kyrie Eleison says:

      Tony, I have a very hard time having a discourse with you on any level. It seems like an awful lot of people like to pick at the things they like about a certain topic and disregard the rest since it would be highly contradictory to their own views.

      At no point did anyone anywhere put forth the idea that “We to change our culture or economy to that of another country.” The chart is a tool for comparison, that is all. I fail to see the analogy you are making regarding AC vs. DC electricity, since I for one have not made any.

      What does it matter how many hours Tesla put in? How does the fact that Tesla died nearly penniless in a hotel room invalidate my argument? I think the fact that you JUST NOW have heard of him speaks volumes.

      The fact remains that he was brilliant, saw a beacon of hope in America, started out at the bottom, and not only had people deny him what was rightfully his both in compensation and recognition, but the U.S. Government stepped in at the very end and took whatever was left from him and resigned him to obscurity out of fear.

      If you are going to discredit all of this with a simple analysis of grade school dynamics then I’m sorry but I cannot continue. Most schools I’ve ever been to treat all of the students equally and give extra help to students who need it. The real world is far less forgiving, and can be very brutal.

      • Kyrie Eleison says:

        I was going to refrain from “going there” but it’s grating on me so I will add this anyways:

        By the way, Tony, we happen to live in a democracy and if the people don’t like the way things are going we are well within our rights to change it! Does this idea scare you? If it does, maybe YOU should move to a country that does not have this form of government.

        You have a lot of gall to suggest that someone pack up and move to another country! It is this “If you don’t like MY America you can GIT OUT” attitude that seems to be infecting more and more people, and to be honest, it can just go crawl into a corner and die. It is anathema to everything we stand for as a nation.

      • @ Kyrie Eleison. I think one of the great things about America is the thought that we can change it; and the great thing about democracy is that we can build a consensus to change it…it has never stopped still for a moment since it was founded: America continually reinvents itself and that needs to happen now, as we are in a terrible bind with the status quo, and need something different, some new sustainable wealth creating hybrid that is not the orthodoxy of left or right, conservative or liberal but something new, creative and energizing.

  17. tony Gee says:

    Kyrie Eleison and Creative,

    Oh boy what have I done?

    I made a very big ERROR and miss understood the DC power grid we would still be in if it was not for Tesla (my son #2 who is in HS said he new about Tesla, my son is a big Science kid, I was proud and thought you would like to know). I horribly thought about that incorrectly and responded with the idea you were for our economy to be changed to the likes of DC vs. AC power. I am sorry for screwing that up. I don‘t know how I did that! Lesson learned I need to re-read the next day the post to make sure what I was stewing over was correct (in this case it was not) I let my emotions get the best of me. I trust you will except my apologue. I would not blame you for having me on probation.

    I do want to have discourse and it will be on both of our terms respectfully! My hopes you will agree.

    I can agree that we have a “system” that is need of correction however it is in my STRONG opinion it is POLITICS. Our elected officials are seriously creating laws they never read. I also agree it is not a republicans or demarcates issue. We need to start electing real citizens who have worked in the privet sector and are willing to give back to their country they love and that is a TRUE servant, these folks in DC are NOT servants they are greedy power hungry Jack Asses and it pisses me off. When I hear the speeches that are made to tickle my ear I can pick it out so easily they are full of BS. We need real people with ethical backbone who will create laws for the GOOD of all Americans.

    If I may get back to the CEO issue:

    We all were on a quest were the chart came from or were the source of the chart came from so all I am trying to do is put some context to it and verify the numbers. I hope I will clear some things up.

    It is in my opinion we could all be sucked into a information overload and unfortunately believe/trust what we read as factual or close enough.

    On my MSN home page this week was this, Top Ten Highest paid CEO. Please look at it and with an open mind try to understand my point.

    http://money.msn.com/investing/americas-highest-paid-ceos?cp-documentid=6866482

    I went into each company’s annual report and or proxy to factually read what is on record from the company it’s self that is sworn record approved by an independent audit company. I clicked on the company name under the symbol then as the next page came up clicked on co. web site. Then had to look for annual report or the proxy some are on a tab that would be investors information then look for executive compensation and if it has the “exec. Comp. table” then you got it, in the index. I just could not find Disney and Coach. FYI none of these guys salaries are over $2 million. Hope my chart works on the post there is four columns the first is the names of the CEO, then what MSN Money is quoted as CEO pay, then the Industry the company fall under, then what the annual report reflex as pay.

    MSN Money Industry Co. Annual
    CEO’s Name Pay in Millions Reports pay reflex

    #10. Michael Watford $43.7 Oil & Nat. Gas $5.4

    #9. John Wren $45.6 Advertising $10.7

    #8.Steve Hemsley $48.8 Healthcare plans $10.8

    #7.Lew Frankfort $49.5 Handbags and acces. Not found

    #6. Jeffery Boyd $50.2 Travel Services $2.2

    #5. George Paz $51.5 Pharm. Benft. Management $10.3

    #4. Robert Iger $53.3 Entertainment Media Not Found

    #3. Michael Facilely $64.4 Realstate Invest. Trust $9.9

    #2. Ralph Lauren $66.7 Apparel $29.9

    #. John Hemmergren $131.2 Pharmaceuticals $46.1

    I have NO IDEA how MSN Money got what appears to be wrong numbers? The only way I see how they did get it wrong is most of the annual/proxy reports have the past three years pay for each Executive and if you add the numbers of each the tree years then it comes close to the numbers MSN Money has put out. Sorry I just don’t understand don’t know??? I hope someone can shed some light. I guess it could be in error but I am sure I’m putting out honest information. I know now not to trust MSN Money that is sad!! How can I contact MSN Money??

    I have come to the conclusion a while back that CEO’s need to have a skin in the game and these guys are paid only (I say only?? It is a lot to me!!) $1-1.9 million in salary. These guy have the responsibility of thousands of jobs. Hundreds and some cases billions of dollars in sales and net income for the company’s they run all on their shoulders. I have no idea about you but I have enough weight on my shoulders with my responsibility managing a $1.8 – 2 million sales with 45 employees at the Restaurant I run, working over 50 hours a week and raising three children and staying married for over 24 years. So as I have a salary and am paid in bonus for sales goals and cost expectations for Food, Bar, supplies, replacements and repair/maintenance. I think it is fine that these guys are reworded with stock after all they do need to have ownership in the company they run and have to answer to hundred of thousands if not even hundreds of millions of shares in the hands of shareholders. Who vote on the Board of Directors (BoD) which receive letters from shareholders with complaints, comments and opinions and demands. That CEO has to answer to the BoD as well as a vision to move the company forward in growth and profit. I can’t believe I an writing this….we know this stuff….I guess I am just reminding us all…..

    As I look the numbers and the companies a couple of things are just glaring at me I would like to share and I think we will agree. Other than what I have already stated above.

    1. General speaking. One company is Oil, Two in Manufacturing of apparel, Three in healthcare and Three in entertainment/media

    2. What does this mean? The “evil over paid CEO’s” are in the entertainment business and Healthcare not what most people would say on the streets of a large metropolitan city.
    -I put advertising in with travel and entertainment. Why? Advertising is a form of entertainment/media and certainly uses each other to survive.

    4. The Healthcare company’s two of the three are in the business of health care plans/management. Now how does that help keep prices of healthcare down the two company’s total net income is over $6 billion that is a lot of money taken away from us who have paid into insurance. Combined there shareholders return net income went up 17% (est. one was up 30% the other down 17%) past 12 months ending so their not hurting.

    Now who are these “evil CEO’s & their company‘s“??

    • @ Tony Gee. Not to worry; this site is all about dialogue and different viewpoints.

      As for CEOs thanks for the interesting info. Compensation includes Stock Options, Stock grants, and bonuses that are not in Salary: that may be the answer. I was a comp expert many years ago.

      The problem with Stock Options (which Jack Welsh of GE said were a catastrophe in retrospect though he was one of the big proponents) is that they encourage Execs to play around with stock price: they want it low when stock options are granted and high when they sell them. I much prefer profit share. Also Option gains only pay 15% capital gains tax versus 35% income tax so that is why the salaries are so low compared with total income: it is a tax dodge. I would make all income subject to income tax including capital gains.

      Healthcare is now 20% of the US economy and is far more wasteful even than the federal government. And what do we as a nation get for our money: the life expectancy of 79 is the same as that hell hole poor Cuba and many other poorer countries. The US has the lowest life expectancy of any developed country last time I looked because so many people have no health insurance In case you didn’t know we are the only developed country where this is true: Switzerland, Germany, Spain, UK, Canada all have universal healthcare in one form or another. So we are paying huge bucks to get (as a country) poor inefficient health care. And Obamacare, like Romneycare which is identical, does nothing to fix the waste in the system, because the healthcare lobby wrecked the original bill which would have had a single payer with the power to push down costs. That is why our premiums are so high as well as 20% of the population having no cover.

  18. Kyrie Eleison says:

    Let’s not try to deflect here, @creative is right. Steve Jobs collected an “official” salary of $1. With a wage like that it’s amazing he survived as long as he did.

    I’m sure all of us are familiar with Benjamin Disraeli. Go ahead and hate on MSN Money all you want:

    http://humanresources.about.com/od/glossaryc/g/compensation.htm

    I don’t see anywhere in there that says compensation is limited to salary only.

    Where does a significant portion of the financing for said politicians come from? Let’s make it really easy:

    http://www.nytimes.com/interactive/2011/10/17/us/politics/a-guide-to-political-donations.html

    So you see, we can scream “It’s the politicians!” until we are blue in the face, but who is behind the scenes providing all the money and pulling all of the strings? It is this DUPLICITY that needs to stop, and everyone involved needs to own up to their responsibility in the way things have become. I’m not going to be an apologist for any of these people no matter what side my bread is buttered on.

    You can have any opinion you want to. It’s a free country! However, as a good friend of mine always tells me, “To ignore the facts does not change the facts.”

  19. tony Gee says:

    Creative,

    Thank You,…..
    Yes that kinda fits into my understanding of, “stock options.” But that part you said about manipulating well that’s just not right that CEO’s would/could inflate and deflate at will, or is it they pick and choose when to use the time to buy with the discount option.

    My understanding was the option to buy X amount of stock at a discounted price but it was at the time of the offer…. for example ….so if the CEO was given the discount price will say 25% off and the stock price was offered at $100 then at that date the offer is given that would be the discounted price of $75 and they would be given X amount of days to act on the option, kida like, “take it or leave it” you have till X date or the option has expired.

    I do find difficultly in believing that a CEO can manipulate the price of the stock to fit their best interest (the key word “manipulate”). The market price has so many variances and a lot of those variance have nothing to do with the CEO direction or decisions for the company or the performance the company. A side note I did start to think as the market was falling apart during the first year of Pres. Obama as he was traveling the world speaking down about the states and not giving any assurance to investors causing the markets to collapse further. I wanted to blame the President and started to think he was purposefully doing it and having his buddies buy as it hit bottom then talk positive to create the markets to climb and all his crony’s made millions. But I just had to stop I just can’t think that would or could happen…. can we?

    Life expectancy I guess I can agree with you 79 years in the USA. My mom lived to 69 and my dad to 88 so the averaged 79ish. That 79 is on the low end compared to other counties wow I am having a hard time believing that. Sorry but I need to check that out.

    Ooh no were do I look were to discount that unbelief…..??? Boy…… I want to jiggle sorry no LingOL at this time based on what I may have created with the CEO Ratio fiasco….

    About coverage with health Insurance….There is Soooo many different kinds of coverage you need to be an attorney to sift through the contracts/benefits.

    Back to CEO issue I had brought up…

    Did you check out some of the CEO’s compensation totals on the company’s annual report/proxy? What do you think?? Your comment, “As for CEOs thanks for the interesting info. Compensation includes Stock Options, Stock grants, and bonuses that are not in Salary: that may be the answer.” did not sound like you checked out any of the company’s reports??

    • @ Tony Gee. Yes clearly there are lots of factors in stock price, but by paying CEO in options, as Jack Welch of GE discovered, you get too much focus on short term stock movements and quarter by quarter earnings instead of long term. And yes CEO’s manipulate to some extent to reduce stock price when options are being issued and to raise them when they can cash them in. They do this by the selective release of good and bad news. They can often choose when to write off an under performing investment etc and they do that, but clearly they don’t do it too obviously. I would prefer the CEO of any company I held shares in to be paid well but not ludicrously (as that makes them not need the money) on the basis of say rolling five year average profits. And if they fail, fire them with no big pay off. Or have the company shares held by Warren Buffett who buys, holds and forces the companies to perform. We need far more active shareholders and not CEOs sitting on each other’s compensation committees and paying each other huge compensations and then justifying it as ‘competitive': it is a rigged market.

      As for life expectancy, Google will I am sure give you the numbers but here is Wiki’s http://en.wikipedia.org/wiki/List_of_countries_by_life_expectancy

      Clearly there are other factors at work than just health care: obesity, smoking rates, and poverty/inequality, but health care is surely one factor. For instance, I have lived in the UK, and my doctor there was paid on the basis of how many patients he improved the health of via exercise, lowering cholesterol, as well as the procedures etc he did. i.e. he got paid for prevention as well as cure. And I am sure other countries do the same. Paying doctors to maximize how much treatment they give is a sure way to over treat….and many treatments have side effects that are dangerous.

      I am on vacation and my wife will have a problem if I start looking at annual reports! But I am sure you are right.

      Obama would have no incentive to talk down stock prices, and actually what he did had the effect of taking the US back to some popularity in the world judging by the opinion polls around the world. Bush made the US very unpopular world wide as I found when I traveled. He was seen to be very arrogant who never listened to his allies and friends. Obama simply tried to be less arrogant, which got spun by his enemies as doing the US down. When all he was doing was getting US popularity back to where it was under Reagan and Clinton. The US is only 5% of the world’s population and we need allies in the dangerous world we face and acting like Bush did lost us a lot of allies. After 9/11 we were really popular around the world and supported in Afghanistan (the Europeans are still fighting alongside us there to this day: French, Germans, Brits etc but you never hear that in the US media) and then we invaded Iraq which blew our support to hell because everyone else saw it had nothing to do with 9/11. Obama had to rebuild some bridges….though he has lost ground in other ways because he has not fixed the Israel-Palestine issue which is really tough.

      • Kyrie Eleison says:

        @creative:

        Yes, I am totally positive that CompuStat (and S&P’s ExecuComp) as well as the SEC are all sources of disinformation. I wonder where they get their data from and how they manage to stay in business.

      • @ Kyrie Eleison. Well Standard and Poor’s are still in business and they got paid to under estimate loan risk by the folk who were packaging the loans, so I guess someone has a vested interest in this….:)

      • Kyrie Eleison says:

        @creative:

        Re: S&P

        Serendipitous, your observation is! ;)

  20. tony Gee says:

    Kyrie,
    OOooooKaaay then……and I tell All my friends…. never mind I tell it to my friends…..you have not elevated to that level yet.

    I never said I hate MSN Money. I said, “I know now not to trust MSN Money that is sad!!” Don’t get caught up in the emotion as I did last go around.

    I have made my errors and I have been open and honest forth coming to you, and you know more about me in this very short time yet you have hid behind you lap top screen and give web sites that puts your audience into a house of mirrors. Put that in you repertoire of quotes for further use.

    Hay you openly attack me and I will respond likewise equally mean back at ya. Or be civil you make the call.

    OOooooKaaay then……and I tell All my friends…. never mind I tell it to my friends…..you have not elevated to that level yet.

    I have made my errors and I have been open and honest forth coming to you, and you know more about me in this very short time yet you have hid behind you lap top screen and spewed hatred and have given web sites that puts your audience into a house of mirrors. Put that in you repertoire of quotes for further use.

    I guess so much for being civil

  21. Kyrie Eleison says:

    Feel better?

    Cognitive dissonance usually tends to make someone angry and lash out when they find out that their core beliefs on many things are either completely wrong or only hold up in their own isolated world.

    I have not personally attacked you, rather it was the same old tired concepts you and many others have put forth that are under attack and are being revealed for what they are.

    Point out an error. Please. I beg you.

    Until then, I will leave the ad hominem and straw man arguments in your capable hands.

  22. tony Gee says:

    I will say to you both; Yes it is and I will be able to continually learn.

    I have always believed and have said, “if you want to improve hang around smart people.”

    And now moving forward…

    About the politicians vs. big company’s donating to them…Why do they except the money? I know this is a rhetorical question because we know why. Out political donation system needs changed the problem is the ones who make the laws for the change are the issue. The classic example of this was (you guys might remember the details) but basically, Our representatives received a raise because the bill was a two part vote but only one vote was needed to pass the bill the second vote was to denounce the amendment that gave the increase pay to congress so with that second vote never going to the floor the raise went into effect.

    I can agree We have a problem and need change both in the corruption of corporate America and corruption in DC. I think our differences might be how big and were to start. If I am correct you think it is with the Stockholders, Corporations, CEO’s and the Boards and I think with Congress and the Pres.

    The reason I feel Congress and the Pres. That way power has been exercised fist by us the voting populace. If we have the current elected official make the changes then THEY have exercised the power with their old mindset and we may never get the corruption out of Washington..

    • @ Tony Gee I agree with your approach, but there is one major problem. John McCain to his long lasting credit helped in 2002 pass the bi-partisan McCain-Feingold bill to greatly reduce the influence of corporate financial contributions in politics. The conservative dominated US Supreme Court then heard a case brought by the lobbyists to overturn the law, and promptly did. The conservative majority on the Supreme Court actually believe the rich and corporations should dominate politics, and see it as unconstitutional that their right to buy policies be interfered with. I am afraid I have no solution to that one until there are new members of the Court who don’t believe in America as a corrupt Banana Republic if you could excuse the blunt phrasing. Why does the media not tell the People about this? Because so much of the media is in hock to corporate interests, especially Fox News.
      See http://en.wikipedia.org/wiki/Bipartisan_Campaign_Reform_Act

    • Kyrie Eleison says:

      Perhaps I need to clarify, also. When I said that everyone involved needs to own up to their responsibility, I was referring to both the politicians and the financiers who are backing them. I spare no vitriol for the politicians, either. However, the focus of this particular discussion has been on the “power of the purse”, so to speak.

      A large part of the responsibility also rests with the voters, also. Things like the write-in vote still exist, and have worked for candidates like FDR, Ike, JFK, etc. Let’s not forget, though, that we are talking about events from 50+ years ago. Times have changed.

      Today, it looks like the end game for some groups is to put further controls and restrictions on who is even allowed to vote, limiting the window when votes are allowed to be cast, using deception to make voters show up at the wrong date, time, and/or place, or resorting to outright illegal activity such as slashing tires thereby doing “God’s work”.

      Things like this (especially that last part) should be criminal offenses and treated as such, but they are not (or they are not being enforced). Limiting the dissemination of information is big business as well, with the conglomeration of media, our complicit FCC, and attempts to regulate the last bastion of free speech lovingly called the “interwebs”.

      All of this, though, is beyond the scope of the current topic under discussion. ;) It seems we both have the same goal (i.e. get corruption out of politics) we just share slightly different views on how it should be done. Let me close with a final thought. Not an analogy to anything in particular, so please just take it at face value: If someone pays another person to commit a crime (such as a murder-for-hire), if the person who commits the crime gets caught, confesses, and reveals that they were paid to do it and by whom, then the person who hired the criminal is considered an accomplice and is criminally liable as well. I can see the motivation behind wanting to keep that financial backing a secret from everyone, as it would reveal their complicity.

      • This is a reply to both Kyrie Eleison and Tony Gee. I think Kyrie has made an important point. We need to get better at building alliances of people who may start from different viewpoint but who basically are not corrupt and want the best for the country. That way we might get things done….

  23. tony Gee says:

    I do remember McCain-Feingold bill did not know that it was found unconstitutional.

    I got it, “follow the money,” in the popular media TV advertising influence is heavy.

    It is sad that we have those in the Court who have political ties.

  24. This is a reply to both Kyrie Eleison and Tony Gee. I think Kyrie has made an important point. We need to get better at building alliances of people who may start from different viewpoint but who basically are not corrupt and want the best for the country. That way we might get things done….
    I am posting it to both of you…

  25. Kyrie Eleison says:

    “My hate is general, I detest all men;
    Some because they are wicked and do evil,
    Others because they tolerate the wicked,
    Refusing them the active vigorous scorn
    Which vice should stimulate in virtuous minds.”

    – Molière’s character Alceste in Le Misanthrope

    So I suppose I fall into the latter, since during the bulk of my youth I was either ignorant of certain things or I felt that as just one person there is not much I can do to change things.

    Now that we have the internet, and social media is becoming increasingly popular, it’s a lot easier to hear from ALL sides and independently research to determine fact from fiction. There are a lot of organizations that have sprung up also that strive to report on issues without bias, and debunk a lot of the popular “talking points” that resonate so well with their target audiences but when placed under the light of scrutiny wither on the vine.

    The most I can do right now is participate and educate. If you present a sound argument and I am wrong, I will concede and act upon the new information. I did not come up with any of these rules that created the mess, I am simply trying to wade through it all and understand it. I have no pride at stake, and I have nothing to protect. I’m not a COINTELPRO. I just want the facts, please.

    “I’ve looked under chairs
    I’ve looked under tables
    I’ve tried to find the key
    To fifty million fables

    They call me The Seeker
    I’ve been searching low and high
    I won’t get to get what I’m after
    Till the day I die…”

    – “The Seeker” by The Who

  26. Pingback: Curmudgeon Alley » Blog Archive » Occupy Wal*Mart

  27. Cmrobeson says:

    Great blog and conversation. I enjoyed reading it. I work in human resources and have seen some unthinkable scenarios played out in Corporate America. At times I have wanted to scream at the executives, business owners and the likes that if they don’t take care of their people they will end up without a business or employees to run it. Since I work primarily with small to medium size businesses I do not see as much as I would at a large corporation. I can tell you there is something wrong, fundamentally. Our pursuit for wealth and accumulation is NOT sustainable under the current system. It will collapse and we are seeing those signs now. If we have another Great Depression, can we saw we have learned anything? The Government system is running itself now, it has been set up that way, intentionally. Corporate America and the Government are in bed together, we all know it. So, how do we change it if we can’t rely on the people we elect into office and our corporate leaders are morally bankrupt?

    • @Cmrobeson. Thanks for your comments. Having worked in HR/labor relations for 32 years, I do perhaps see your question through HR eyes. It always seemed to me that whom we select to hire and then promote is one of the most important things any company of whatever size does. Both processes in my view should be very evidence-based and rigorous. Hiring someone is often (over a career) a multi-million dollar investment. And whom we promote signals the behaviors that we reward. Unfortunately very few companies take this seriously and my old company now has its share of time servers, dolts, upward facers in senior roles, as well as some real talent. It’s like it can’t tell the difference. I was in one division where we took seriously the job of purging the incompetents and poor value leaders at all levels and it made a huge difference. That is what we need at a societal level.

      And in politics, take a look at the Republican candidates as candidates, putting aside for a moment their policies. I would not hire any one of them in my business. Neither would I hire President Obama, who has not learned to box or truly lead. I could see myself perhaps hiring Hilary Clinton, who seems a competent professional in the State Department, but I would still need a lot more data and convincing before I made an offer even to her. I can’t think of the last President I would have hired. Probably Dwight Eisenhower. And I might have hired John McCain before he met Sarah Palin…..and went off the rails, so maybe I would have made a mistake.

      In politics the single most important thing we can do is to pass a constitutional amendment reinstating McCain-Feingold which limited the corruption via campaign contributions. Easily the best and most consequential bill passed in the last ten years in Congress and struck down by special interests and the Supreme Court, out in my view to destroy the country. Senator Bernie Sanders is trying to build momentum to pass such a constitutional amendment which should have across the board support from an electorate that hates what Congress has become. I would like to see how people voted on this constitutional amendment as the #1 criteria for whether we should vote for them next year.

  28. according to an article in the globe and mail dated jan 2, 2012:
    “The richest of the rich have gained more ground in Canada, and are now making 189 times the average Canadian wage, according to a new report.”

    http://www.theglobeandmail.com/news/national/top-executives-take-3-hours-to-make-an-average-workers-yearly-salary/article2289438/

    this 20:1 ratio in the chart above makes canada look like a fair and equitable country…i can assure you that it’s not. hence the need for the occupy movement north of the 49th parallel.

    • @dwdeclare. Thanks for the info. Canada is increasingly a minerals/petro society and my friend Tom who studies such matters thinks that such societies almost inevitably become more unequal unless, like Norway, they make a major effort to stay egalitarian. Oil and gas in abundance seem natural enemies of democracy.

      And I am happy if I hear that the Occupy Movement gets traction in Canada too.

  29. Tony Gee says:

    Yes the CEO’s are the most evil that has been well established on this blog.

    Those who are equally evil if not more as the CEO’s are the ones who play off the average worker and those who in political office (servant of the people) getting votes from them to gain power and control. It is madding to understand that a Federal employed servant whether in congress, senate or VP and Pres. Get free education for their children and to here our president say they all will be ok with 35% tax… ya they get so much subsiding it’s not funny and to think after serving (ya right more like SELFSERVING) and to think, “the peoples” Presidents and the rest of them get millions on speeches book deals is just sickening.

    I think many would also agree these folks are evil as well… everyone who makes more than the average worker starting with those who make twice as much, and maybe extra evil if you’re retired and in your retirement your income is more than that of the average worker and most certainly if twice as much.

    • Tony Gee says:

      I used the term evil because of it being used by the Occupy Movement.

    • @Tony Gee. Good to hear from you. I trust you had a good holiday season. I don’t really go along with the Occupy Movement in calling CEOs evil or Federal employees. I know a fair number of CEOs of companies large and small and hundreds of Federal Government employees, mainly military. It is the system that produces inequality and evil results including unjustified rewards that don’t reflect contributions. I would even stand high CEO pay (though not the obscene billions) if they actually did a good job. To my knowledge Federal employees don’t get free university education for their kids, though professors do get reduced rates in their own schools I think. All of the Presidential candidates like the President are from the 1% and I think that is the problem: they are just not representative of the country and don’t understand it anymore. This used not to be the case until I think Kennedy brought in the idea of wealth buying political office at the Presidential level at least.

  30. Girlfriend says:

    what i find concerning about this is that there is no SOURCE for this table. Your friend Matt is your only cited source. Does Matt do statistical data analysis, where did he get these numbers? I’ve seen this circulating quite a bit and I’m concerned that it has no reference to back it up. I’m not saying it’s not true, I’d just like to see how true it really is.

    • @Girlfriend. Having handled compensation planning for a major US corporation internationally, the ratios are not completely out of line with my experience some years back, but I too am interested in the source. I posted them to provoke discussion and debate in keeping with the spirit of this blog which is about conflict and certainly not orthodoxy or assuming everything posted is on the money. Thanks for your comment and concern. Let me know if you find any more about the source.

    • Tony Gee says:

      Girlfriend have you read the past comments above?

      It would be interesting if it helped you!!.

  31. Shasta says:

    Check your facts:
    Viral Facebook post on CEO-worker pay ratio has obscure past

    http://www.politifact.com/truth-o-meter/statements/2011/oct/10/facebook-posts/viral-facebook-post-ceo-worker-pay-ratio-has-obscu/

    Sorry, no sale.

    • @Shasta. Been through this movie before and the Tampa paper piece. I quote: ‘But in its claim that the U.S. ratio is 475 to 1, the chart conveys a sense of certitude and statistical precision that simply isn’t warranted — and which is contradicted by the facts. The latest number for the U.S. is 185 to 1 in one study and 325 to 1 in another — and those numbers were not generated by groups that might have an ideological interest in downplaying the gaps between rich and poor.’ This blog is happy to accept 185 to 1 or 325 to 1. The picture is directionally the same: crazy inequality. We post not to sell, but to provoke debate and argument and out of that to get nearer solutions to conflict problems. And 73 comments to date is fine with us.

      And for the record, our correspondent D J Nash did a guest posting on this blog at: http://creativeconflictwisdom.wordpress.com/2011/10/13/ratio-of-ceo-to-average-worker-pay-clarification-from-d-j-nash/

      Which does indeed track down the probable origin of the data and comments interestingly on it, continuing the tradition of this blog of healthy debate, counter data etc all done with courtesy, respect and listening skills.Thanks for your interest.

  32. koby007 says:

    Came across this interesting post in my research for a counter job offer. For the US, the chart posted is certainly for the Fortune 500 or large public companies.

    New statistics just released by U.S. Bureau of Labor Statistics drills down to average CEO pays by state. I can not find a direct link to the info, however, the following site contains some info, and a search tool to allow for further drill down. Appearantly, as of May, 2011, CEOs in Delaware tops the chart at $219K a year, and CEOs in Montana makes the least at $105K a year. This is certaily less than 10x the average worker’s salary, a far cry from 475 to 1.

    http://www.bizjournals.com/bizjournals/on-numbers/scott-thomas/2012/04/ceos-earn-more-in-delaware.html?page=all&appSession=94892925908728

    • @koby007. Yes as in previous discussion on this posting, the ratio is almost certainly for Fortune 500 or large companies. Bringing Mom and Pop stores into the equation I am sure deflates the ratio but the point remains that for the larger companies (and in my experience in the corporate world) the ratio of CEO to average workforce earnings is astronomic and unrelated to performance in many cases. Thanks for the info.

    • Tony Gee says:

      kobyoo7. Your on point!

      Thank You for exposing the truth!!

      The conclusion on this chart is pretty clear it is designed to stir class warfare. Any one can skew numbers to make their point, in this case as you have shown overwhelming evidence of it’s flaws. We all have to ask what is the intention and put into question the integrity of the chart and its author who seems to be happily hidden in the twisted www.

      The chart you bring would seem to reflect a much truer statement of, “Ratio of CEO Pay to Average Worker“ here in the US, but it would not fit the template of class warfare therefore it is not discussed as a more true meaningful evidence. As you stated that puts us below Japans 11:1 ratio and that could say a lot!

      I think any fair reasonable minded person will agree that we have some over paid CEOs, just like we have some over paid “average workers.” It would be equally fair to say there is underpaid CEOs and average workers too.

      We do live in a county of extremes and who really gets to dictates who is allowed to have what, that is a very slippery slope. I certainly don’t want some bureaucrat in Washington or the UN deciding. They already have to much power over our lives.

      • @Tony Gee. The only class warfare I have seen in recent decades in the US has been by the top 1% who have largely monopolized the benefits of the economic growth we have had. The average family’s real wage adjusted for inflation has hardly moved at all. Part of this imbalance is the result of CEOs sitting on each other’s compensation committees and jacking up their pay without any relation to contribution, profitability, performance or anything else. Having worked on executive compensation in 16 countries, this problem is massively more serious in the US than any other country I know of. The chart with its flaws captures that reality quite well.

        What to do about it, is harder. It would be a lot easier to keep sensible executive pay levels if they existed than return to them when we have our current madness. But one step is the so called Buffet Rule: those earning over a million dollars a year should pay at least the same % income tax rate on all their income (no overseas hidden bank accounts, no evasion or avoidance) as those earning under a million dollars a year. That would be a start.

        The other thing that is happening is for shareholders to revolt and say: we are overpaying massively for CEOs who in the main don’t make that much different to company performance. Very few companies sustain above average performance for many years and the above average performance is often sheer luck. As a shareholder in a number of companies, I don’t want my companies’ CEOs deciding their own pay in cahoots with CEOs in other companies. And I don’t want Stock Options but a profit share on a five year rolling basis to be the main source of CEO income to keep them focused on real returns over the medium not short term. Stock Options encourage stock price manipulation when options become realizable. Jack Welch of GE more or less invented the use of Stock Options on a mass scale and has come round to the view they are a very bad idea and of course they make executive pay inflated for little benefit to shareholders.

        As ever thanks for your comments.

  33. Pingback: If modern politicians were a bank, we’d have bailed them out three times already (or how everyone is retrainable) » 21stCenturyFix.org.uk

  34. Pingback: Why are Republicans desperate to have a billionaire "elite" to run their lives? - Page 18 - US Message Board - Political Discussion Forum

    • @Why Republicans desperate. Well I guess the answer to your question, is that the Republicans may use their base to get elected but they have no real connection in their policies with the interests of said base. The latter need good education for their kids, good affordable health care, and the small businesses they run need a lot more supportive climate to thrive. The Dems aren’t necessarily that much better but they try to look after the wider population. Take Chambers of Commerce: they are now dominated by large companies in most parts of the country and do nothing for small businesses. When was the last time a Republican administration did something for small businesses? The GOP is basically the Koch Party hiding as the populist Republican Party. The party of Lincoln has come to a sorry pass.

  35. Pingback: Union Boss salaries- They have a lot in common with the people they represent - Page 2 - US Message Board - Political Discussion Forum

  36. Bob Na says:

    Id like to see on every label of every product sold a number which illistrates how much money goes to CEO salary and a similar number for the average worker (based on the suggested retail price or other metric)…perhaps then over time we might see some sanity in CEO Salaries

    • @Bob Na. Good suggestion. I would also like companies to pay tax based on the proportion of their global business is done in a country so they can’t use transfer prices to conceal and avoid tax. If 25% of your business is in the USA, then you pay tax on 25% of your global profits.

  37. Brutal Truth says:

    Here’s an idea for legislation. My idea is called the Surplus Value Notification Act. Surplus value is the difference between a worker’s value added (the monetary value of his or her labor to their employer) versus the wage the worker is actually getting paid for that labor. For example, in North Carolina the state average is that business owners extract over $5 in surplus value for every $1 in wages they pay their workers. So my idea is, if we can’t avoid getting ripped off out of most of the value of our labor in a capitalist economy, and if the perpetually business-friendly government in Washington D.C. isn’t going to lift a finger to raise the minimum wage to make it a living wage the least they can do is pass legislation mandating that employers tell every prospective employee just how badly they’re getting ripped off, e.g. if they’re hiring a person for $8/hour and expecting $48/hour worth of work out of them, they would have to tell them up front before they’re hired and put it in writing. The same penalties would apply to the business owner for lying about it as would apply to the prospective employee for lying about his or her job experience or other things on their application.

    This way it would allow the worker to shop around to some degree and compare potential employers to see which one will exploit him or her the least. For example if I apply for one job and they want $60/hour worth of work but will pay me only $8/hr. and I apply for a different job that will pay me $8/hr. for $40 of value added/hour then it still doesn’t get me a decent, non-exploitative wage but it at least gives me a small amount of leverage in being able to compare the exploiters with one another.

    Think about it: if I can’t buy a tube of toothpaste without the manufacturer being required to list its ingredients, if I can’t get a loan from a bank without them having to tell me what the interest rate they’re charging me will be then why on earth should a business owner be able to hire someone without telling them explicitly in dollar terms just how badly they’re going to be taken advantage of in order to enrich the exploitative business owner? Granted, this would never make it out of committee let alone get passed by Congress of course, as the U.S. government is literally nothing but the enforcement arm of the billionaire ruling elite and big corporations. Anyone who can’t figure that out needs someone looking after them. But it would be fun to put congressmen on the spot and make them explain just why workers shouldn’t be allowed to know just how badly we’re being screwed every hour we’re on the clock.

  38. John Rollow says:

    An Associated Press article of May 25 said that “the head of a typical public company (in the US) made $9.6 million in 2011, according to an analysis by The Associated Press using data from Equilar, an executive pay research firm.” “Typical” probably includes many companies smaller than the Dow Jones index companies or the Fortune 500. (That was median income.) Supposedly includes cash bonuses and stock options at mature value.
    Other sources peg the “average worker’s” salaries between $36,000 and $48,000 per year. Average: $46,326.
    Divide that last number into $9.6 million and you get a ratio of 207 — a lot less than Matt’s 475. However, from other things I have read, I’m inclined to believe Matt’s figure. Why are these numbers so elusive?
    This is a real issue — beyond “class warfare” and “1% vs. 99%.” it’s symbolic of the great inequality of wealth in this nation.
    No one mentioned the Dodd-Frank legislation that passed Congress, but has not yet been implemented by the SEC. Transparency on this issue is provided by requiring all public corporations to state the CEO’s compensation vs the average worker’s compensation. (Or something like that.) That would be a start in changing the status quo.

    • @John Rollow. Thanks John good comment and clarification. And of course I would not mind some differential for managers who grow their businesses and the number of people they employ to the benefit of all.

  39. Jen says:

    I came upon your entry while looking for a source for this very chart. Was able to find this eventually: http://www.politifact.com/truth-o-meter/statements/2011/oct/10/facebook-posts/viral-facebook-post-ceo-worker-pay-ratio-has-obscu/

    • @Jen. Thanks. I had seen this:

      But in its claim that the U.S. ratio is 475 to 1, the chart conveys a sense of certitude and statistical precision that simply isn’t warranted — and which is contradicted by the facts. The latest number for the U.S. is 185 to 1 in one study and 325 to 1 in another — and those numbers were not generated by groups that might have an ideological interest in downplaying the gaps between rich and poor. We rate the claim on the U.S. ratio False.’

      As this paragraph itself doesn’t provide any data on the sources it uses, and indeed the two sources quoted differ by a wide margin, I am not sure it helps. It just says: 1.425 is wrong because two other studies differ. In any event, I am not sure 1:325 is exactly egalitarian and from my viewpoint the real issue is that CEO pay is decided not by shareholders, but by compensation committees of other CEOs: like criminals deciding each other’s sentences, no other inference intended. And above all CEOs add a lot less value than their pay suggests. If they really did warrant such high pay our economy would be thriving.

  40. Mark B says:

    all those shows is that there is the disparity between certain countries and the united states of america.
    it really does not tell us anything about how this impacts the daily life of the average worker.

    for example france is having serious economic problems and they still have a very low ratio.
    I am sure people in europe would trade that ratio in order to have a better economy with jobs!

    • @Mark B. Well we do know some things about the US middle class. Namely that over the last 30 years their real living standard adjusted for inflation has hardly changed despite considerable economic growth. And we do know that most of the increment in economic growth went to the top 1% of the population by income and CEOs are part of this. We also know that things were very different 1945-1980 when CEO pay was a much smaller multiple of the average workers pay in the US. And during this time most of the increment in economic growth went to said middle class and this made for a generally prosperous country though Nixon had started the rot with inflation, going off Bretton Woods and prompting the Oil Shocks. But that’s another matter. My problem with over paid CEOs having worked all my career in the corporate sector up to senior levels, is that most CEOs are worth a row of beans and certainly not much more than 20 times their average employee….and over paying them has done nothing for corporate performance. The problems in Europe are largely the fault of the Euro and of the banking system that as in the US decided to make loans that were unlikely to be repaid. And Banking CEOs in Europe are closer than other companies’ CEOs to the US multiple of CEO income to worker income.

      • Kyrie Eleison says:

        @creative:

        Not to interject, but I’d like to try a bit of root cause analysis, if I may.

        When and where did the global recession begin? What impact did it have on the economies of other nations like the UK or France?

        It would be a bit presumptuous to draw a parallel to the economic conditions in another country, and even more so to suggest solutions for improvement, without an adequate investigation.

        Another question: How does the degradation of a consumer’s spending power help grow an economy?

        How this disparity in compensation might affect the daily life of an average worker has been discussed at length in many articles, books, and papers significantly more articulate than a simple chart can convey.

        Some basic topics to independently evaluate (beyond just the Wikipedia links) and form your own conclusions about, as I prefer not to editorialize:

        http://en.wikipedia.org/wiki/Feedback

        http://en.wikipedia.org/wiki/Transient_response

        (Note: My intent is for all of these questions to be rhetorical in nature, and my hope is to further thought and dialogue in keeping with the spirit of this blog.)

      • @Kyrie Eleison. Good question and good links. There is historically a lot of evidence that the massive growth in inequality in the 1920s in the US created a very unstable consumer base. The bottom half of any society typically spend all they earn and then some now credit cards exist. In contrast the mega rich, faced with a downturn, actually stop spending much of their income as their assets lose value. Very sensible you might think. But what about the effect on the economy? The more unequal and economy, the more unstable its consumer spending and the more prone it is to deeper depressions. The reason unemployment pay was first introduced in the US and in Europe was to counter this instability. As for CEO pay, there is absolutely no evidence that there is a market force that creates there high pay. And their high pay is self voted for, unrelated to real results, and in my experience a source of detachment from the real business. While there are CEOs like Jack Welch and Alan Mullaly who really do make a difference (and are maybe worth the big bucks) most CEOs are not worth their pay by many orders of magnitude.

  41. Al Winchell says:

    What no one talks about is of there are any real figures on how the pay of A effects the pay of B. Money is not a finite number. Is there proof that the salary of the CEO prevents a better salary of the worker? Do the decision makers claim we can not raise the wage because the draned all of our resources? If this is not the case then the stat is merely meant to incite jealousy and class division.

    • @Al Winchell. See my posted reply to @ Kyrie Eleison. Well banks for one are not making loans while they improve their balance sheets, while simultaneously paying themselves highly despite their appalling performance. The stat is indeed intended to prompt outrage I am sure. But the question is, isn’t jealousy and class division justified, given the 1% have in effect been waging class war on the 99% since around 1980? It is all well and good to say: oh dear, no class jealousy once the 1% have taken hold of a disproportionate share of national income and wealth. I would mind less if they were not useless at running an efficient, stable, value add economy that built a strong manufacturing base and keep the US competitive with China. But instead they got and stay rich via useless Ponzi schemes and casino banks. And I say this in the spirit of dialogue and argument, not to disrespect your points in any way. Thanks for posting.

      • Kyrie Eleison says:

        I am more interested in the idea that we can have an infinite number of anything in a finite system. What effect would that concept have on the value of said infinite item? Are there any corollaries from history to illustrate?

        As far as the cause and effect, a cursory web search has provided me with ~4.2M results, some of which are relevant and contain a lot more information from which they draw their conclusions (and are much less superficial than the ones being suggested).

        It takes a lot of courage to challenge our core belief structures, but in the pursuit of truth and understanding it is imperative.

      • @Kyrie Eleison. I agree about the importance of challenging our core belief structures. The first step is to admit that they are beliefs not simply reality. And learning to see when we are wrong is critical. I have felt very liberated by the insights of Kathleen Shultz’s book Being Wrong: Adventures in the Margins of Error. That said and exploring the CEO topic. Having worked in a large corporation and done business in 20 countries with it, there are some interesting things about worker/management differentials. For instance, in my experience, the people who run very large manufacturing plants employing up to 8000 employees, tend to get paid perhaps 5 times what their basic blue collar employees are paid and this is true across many countries. These jobs are intensely accountable as there is no where to hide: you either make your production/quality/cost or you don’t. Similarly sales jobs tend to be both very accountable and not huge management differentials. Engineering ditto. Where the craziness sets in is where the job is a corporate officer: part of the governance of the company. And lo and behold this governance structure like all governance structures has one set of rules for those underneath it: pay them modestly, competitively, strong payment for results etc. But as for themselves, the corporate officers and CEO don’t want any of that nonsense. They tend insist that running a big company requires monstrous pay, that this pay should shoot up if the company does well and should continue to shoot up even if it doesn’t because clearly the job just got harder. So that’s my shot at root cause analysis…and of course the worst CEO ratios are in banking…where the accountability for results is negligible.

      • Al Winchell says:

        It still goes back the core question of whether the high salaries effect the salary of the worker. Putting morality and sense of fair play aside, and looking at it purely from an economic standpoint, if all the those salaries were cut in half, would the average workers salaries rise? I am not rich, and have no skin in the game, but I question the judgement of telling anyone what they should be paid. That is between the employee and the employer and should remain that way. Fair is tough to distribute. Unfortunetly there is a big diference between “fair” and “right”. If you don’t want the public determining your worth, then the same has to apply for everyone. That is the definition of fair. Is it “fair” the get so much? Yes. Is it “right”? That is the question. I frankly don’t blame the CEO’s, but the Board of directors that offer the salaries.Tom Cruise gets the same basic, paltry 15 or 20 million a picture, plus a huge bonus if the film does well. Same can be said for athletes. Ineffect we are the board of directors because we have set the presednt that we will pay to see his movies. Often whether they are good or bad. If we decide this is a road we will go down, then the judgements need to be made across all avenues. As a society, if we decide we want some sort of “balance” then the only way to do that is to use our checkbooks. Don’t patronize the business, movie or sporting event. The indignation has to be spread fairly across the spectrum.

      • @Al Winchell. I agree with much of what you say. But let me put it another way as I did in another context recently. I have savings. I would like to invest them in a different type of stock market. In my stock market, no one would be allowed to be paid in stock options as these as Jack Welch says are the greatest destroyers of value yet invented. No CEOs would sit on each other’s compensation committees, only ordinary shareholders with no other CEOship under their belt aka no bias towards high CEO pay. CEOs would be paid a base salary a fixed percentage above the senior managers below them. They could have a profit related bonus that was on a rolling five year profit basis and would only be paid if an independent auditing organization confirmed no spin the company’s books. And my stock market would exclude the financial sector and only include companies with strong products or services of continuing value to society. This is the sort of approach Warren Buffet has adopted but without some of my suggested rules.

        Now this will not happen, because what we have is a recurrence of feudalism which is always there below the surface. We thought markets and capitalism had got rid of feudalism but inherited wealth is always going to try to refeudalize the economy at all our expenses. From 1945-1980 feudalism was defeated and looked dead and the middle class and the economy in the US thrived. But from 1980 to 2008 the new feudal class took back what they felt they deserved and made serfs of the rest of us. That is what the new US inequality is about and what CEO pay is a reflection of. Clearly as above I have no problem with high pay for performance but it has to be proportional and what we now have is not proportional. I hope this is an interesting response to your comments.

      • Kyrie Eleison says:

        My opinion is that anyone who attempts to divorce sociology and psychology from economics should seriously reconsider their position on the subject.

        We can create mathematical models in the description of systems ad infinitum. How people react to them is at least equally important if not more so and cannot be excluded from consideration.

        There also seems to be a bit of contradiction here in the application of the term “fair”. Since there are multiple definitions of the term, it would assist in pointing out which one is being used.

        From the Merriam-Webster online dictionary, it could mean: “free from self-interest, prejudice, or favoritism” or it could mean “conforming with the established rules : allowed (2) : consonant with merit or importance : due” in the context of this discussion.

        @creative has pointed out that the market forces are not the primary driver in determining these salaries. How does that fit in with being consonant with merit? Does simply following established rules without questioning whether or not the rules themselves are inherently “fair” a “fair” practice?

      • @Kyrie Eleison. Absolutely, you cannot understand the current economy without a healthy dose of sociology, anthropology, and psychology. The relationship is two way: the economics is driven by the psychology etc and the psychology etc driven by the economics in a sort of dialogue…

        CEO pay levels remind me of Alpha male behavior in primates. They are power plays not economics. Big pay is essentially grabbed by using governance of other CEOs on compensation committees to make big pay happen, with no real data that the high pay achieves results. It is an untested belief system, a sort of CEO cargo cult…big pay and results will follow. Indeed most of the success of companies is as much due to luck as CEOs. GE is the only company still in the Fortune 100 that was in it in 1917 and that has actually matched the Fortune 100 in that period. Supposed excellent companies come and go. What CEOs try to do is to grab a fortune in the four or five years before they are seen to have failed, which is actually the company reverting to the mean from an artificial success. As someone said wisely: markets are incredibly dynamic; big companies incredibly static so the dynamic markets bring down the dinosaurs whatever the CEO does.

        I have some experience of CEOs both in the days when they were more modestly paid pre 1990, they thought longer term, they focused on business efficiency, quality, cost etc and they lead their company with respect for the workforce and did not send jobs to China. And experience post 1990 when they started to get huge pay and focused on stock price for their stock options, and the very short term, letting the operating basics get lost in grand strategies that looked good to Wall Street, which knows nothing about real business only spin, but sucked in reality…and they shipped jobs to China as if not having a prosperous middle class was of no importance for the US market where they earned their living. I guess in a way I see shipping jobs to China as a form of treason…the treason of the CEOs but maybe I am getting old and moralistic… :)

        And to connect back to a question Al Winchell asked: shipping jobs to China was used as a lever to screw down wages in the US and bid up CEO pay as a reward….

      • Al Winchell says:

        And we are back the definition if fair. Kyrie is exactly right. With mulitple definitons of fair, to use any specific one as a basis to determine societal norms, or acceptance of behavior, becomes an insurmountable problem. This, I believe, is where the president fails miserably in trying to get across his point of social justice. To say what is fair and what is not, is totally subjective and the reason we have courts. A friend of mine did not get a job he was qualified for and blamed it on ageism and proclaimed it as unfair. I commiserated with him, but realized that somewhere across town, the person who got the job, considered the fairest of all outcomes. For him he probably thought that it was finally fair that an up and coming talent got a chance to get the experience required to push ahead in his own career. We all want to believe that salary should be based on merit, and make a huge claim that it is a “social injustice” when it is not, but then blindly support both some, and almost all, public unions that hold absoluetly no adherence to this belief in their pay structure. Merit plays amost NO part in thier salaries. So we come back to fair vesus what is right. To be fair you have to strip away judgement based on any crieteria, race creed or financial status. What applys to one must apply to all. So you have to use the same definition of fairness no matter if it is 50 thousand a year or 25 million. Success does not have to be based on merit. We would like it to be, but seldom is. From the son who inherits a business, to a trust fund baby that does not have to work, to a model born beautiful or a rap singer who can rhyme profanity. The worth of our toils is always what someone is willing to give us for it not what what the group feels is fair. Enjoying the discussion.

      • @Al Winchell. Yes fair is difficult to tie down though I think it is deep seated. There is a psychological experiment called the Ultimatum Game in which a psychologist offers two people $50 dollars. The first person has to decide what split they will make and the second person whether to accept the split. If the second person doesn’t accept the first person’s split they get nothing. If they accept then they get the split. Logically as $1 is better than nothing, most people should accept a 1:49 split as the second person. But guess what.Most people think 50 50 is fair, and in almost every culture in the world where it has been tried 90% of people refuse anything worse than one third/two thirds…We actually know what is fair much of the time; when we are involved it may get a bit complex but as bystanders with no skin in the game we get fair most of the time.

        No my problem is more one of landscape: we have created something much more equal via changes to the tax system, especially capital gains being taxed less than earned income and we have allowed massive tax dodges for the rich, the net effect of which is that the middle class pay the tax bill for everyone. Well there are some honest rich people who help too. And the real reason the income distribution is so skewed is that we have stopped trying to earn a living via making goods and providing services. Most of the rich have made their money via Wall Street. Now I am all for a strong financial sector provided its role is to provide capital to real businesses. But when it become a gigantic casino and in effect creams off resources that should be making real businesses thrive, then I have a problem.

        So while fair may be hard to define on CEO incomes. Catastrophically dysfunctional is not. And our CEO pay is that because it is not rewarding productive behavior in my view. Our economy chaos is at least partly due to compensation structures in finance that encouraged lunatic risk taking and rewarded short term gain with no pull back when the losses emerged later. Lots of other causes but executive pay in Finance is on the list.

      • PS The Commencement Speech by Michael Lewis at Princeton makes excellent points on the role of luck in success and also a nice anecdote on a social psychology experiment on how randomly appointed leaders grab the extra cookie….CEOs in embryo…See it at

  42. Kyrie Eleison says:

    Considering the history of unionized labor in general, it seems to be that it was formed in response to great social injustices and rampant suppression. The wine is made, your table is ready.

    • @Kyrie Eleison. Good point, but unfortunately in my experience US and UK unions are not very good at understanding how wealth is created, and until you really understand that, it is hard to get your hands on the right controls. By their nature, day to day unions tend to represent those in trouble for discipline breaches, and this skews their view of the world: see the company as harsh to these poor drug taking, don’t come to work folk, instead of seeing it as getting rid of folk who are a burden on their fellow workers. Unions rarely press for Lean Manufacturing, for instance, which is the number one way to both make US companies competitive, and involve the workforce in the design of the processes and their jobs. Unions pay lip service to the idea of competitive companies, but in practice are even more short sighted on wages than management.

      Contrast this with Germany, where in the last ten years, unions have held back wages as part of deals to avoid outsourcing to China and Eastern Europe. Yet their pay and conditions are still excellent, they have avoided mass lay offs, and German manufacturing companies are world class and competitive. So give me the German union attitude and I would take up your challenge. By the way, since the 1940s to avoid a return to industrialist sponsorship of the Nazis, all German companies have to have a Supervisory Board, that includes union appointed representatives, and this board sees all the business numbers, and also approves Executive Compensation, which may be why German CEO pay is not so absurd, and actually correlates better with real performance not stock option spin. Not that Germany doesn’t have problems of an aging population and it is high cost, but it focuses on high value manufacturing to compensate. Look at BMW….

      • Kyrie Eleison says:

        I did not mean to imply that I support unions, rather I was simply pointing out how they were formed, in an attempt to counter exploitation.

        In practice, however, I feel that they tend to be overly coercive bordering on extortion. As we’ve discussed before, lowering oneself to using the same tactics.

        So where does it end, this vicious cycle of exploitation/extortion? Hindsight being 20/20, would it not have been much easier to simply avoid it to begin with? Yet, here we are.

        To clarify my point, using a phrase we are both fond of: “How would you like it if I did that to you?”

        I tire of hearing about this “pendulum” that some people seem to be so worried about. Newton says that every action has its equal counterpart, but what happens when we apply this principle to human behavior? Some cultures are content with an equal retribution (eye for an eye), some require that one simply be made whole by the transgressor, while others command much more (sevenfold is just one example) so that there is a punitive element attached to deter repeated offenses.

        These are simple observations written quite clearly in ancient texts (among others) and should come as no surprise at all to anyone.

        When we become brazen enough to try to tilt that pendulum in our favor at the expense of others, it would help to imagine ourselves laying in the pit. It’s not a question of if, but when, it is going to come swinging back on us. The potential energy we store up in that thing could merely give us a wake-up call and perhaps a good scare, or it might slice us in half.

        Judging by the carnage over the centuries, I think we need to peer at ourselves through the looking glass, make some adjustments, and break the cycle. It would help if whoever started the cycle make the first move. Who knows, the problem may just resolve in a controlled manner – it’s got to be better than the alternative.

      • @Kyrie Eleison, I agree with all you say in this post. And yes it a pendulum and as folks used to tell me: ‘paybacks are a bitch’.

        Unions arose just as you suggest; the tragedy is that they have not proved able to adapt to much more subtle situations that require intelligent solidarity not the mindless sort. As a result they have lost membership, political influence and have come to be seen as protecting only their minority of members, not wider society. When I find in a conference in a Chicago hotel, I have to call a union worker rather than move a slide projector table three feet, then I think the unions have lost the plot.

        One thing that is of relevance is my posting on mapping our interests a few weeks back. See http://creativeconflictwisdom.wordpress.com/2012/05/12/mapping-your-interests-in-conflict-collaboration-or-internal-dilemmas/

        Imagine a high income man who makes his money(which he intends to leave to his only son) by working as a senior manager in a tobacco company and like his colleagues smokes. (A friend of mine did some work for a tobacco company and yes they all smoke.) Influenced by his Dad’s example, his son takes up smoking and as a result dies of lung cancer at 35. Now you could say that making money was the managers position, but his underlying interest was his love of his son and his smoking set the example that killed the son. So much of what CEOs do for short term gain is positional in this way, and ignores the fact that they live on the same planet as the rest of us. Oil company executives lobby against emission controls though their grandchildren will be badly hurt if climate change is significant. That the CEOs need a healthy middle class here to buy their products and so on. But instead they construe their activity as a zero sum game to be ‘won’ by maximizing their income at whatever cost. And they ignore all the interests they have as citizens in common with other citizens.

        And of course the CEO who is obsessed with big pay, is possibly a narcissistical sociopath, who should be receiving treatment, not running a big organization whose employees depend on it for a living and we depend on it for its products and to keep the planet non toxic…..

        If you look at 19th century British history you see the slow dawning in the minds of the wealthy of the message of your post. If you screw the poor down and exploit the hell out of them, one day, like the French Revolution they rise up and guillotine you…or your servants bring disease from poor drainage to your house and infect your family; so it is in every one’s interests, not least the very rich, as Warren Buffet realizes, that society be more even, fairer and not a place of great societal oppression…now how we get there from here is another matter.

        The Golden Rule is ultimately the only sustainable basis for a society and great power or wealth imbalances in a modern media saturated world are asking for trouble…It is funny that more conservatives don’t realize the message of that marvelous Italian novel by Lampedusa ‘The Leopard’…the more you want things to stay the same, the more you have to change….Climate change is probably the biggest threat to the status quo of all societies and yet conservatives are reluctant to embrace it as a cause because it seems to imply more state intervention. Well maybe but that shouldn’t influence if you think it is happening…

      • Al Winchell says:

        For the fifth consecutive year, Forbes Magazine named Gisele Bundchen the highest-earning supermodel in the world. The Brazilian-born beauty is estimated to have earned $45 million over the last year alone, with an assumed net worth of $250 million.
        Appying the distain fairly across the baord. She can walk and wear clothes. Most CEO’s can so that and have few more skills.

      • @Al Winchell. Interesting comparison. I have not much more time for super models, football stars or movie stars high incomes, but at least they don’t outsource jobs to China, create weapons of mass financial destruction, and generally run large companies badly.

        I have known and worked with one of the best CEOs ever Alex Trotman of Ford, and have met quite a few mediocre CEOs of big companies. And I have heard first hand from insiders of the great work of Jack Welch at GE, and Alan Mullaly at Ford. Most CEOs pay themselves as if they were a Jack Welch who saved GE from annihilation and really turned it round. And as someone said to Dan Quayle: John Kennedy you are not. Most CEOs (look at Hewlett Packard for instance, look at the banks, look at most big businesses) could not turn their cars around in a tight space let alone their company. The real leaders (even including Jack Welch) have humility, and realize that all the value is added in a business is added at the bottom by the workforce, and the job of a stellar CEO is to get the obstacles out of the way of the workforce, to be a servant leader, and let them loose on the business with an intelligent strategy to align their efforts. I reckon about 2% of the S and P 500 have CEOs able to do that and those 2% deserve the big bucks at least some of the big bucks.

  43. Kyrie Eleison says:

    All this tells me is that people are willing to pay just about anything for sex under the guise of art.

    In fact, I think the advertising industry is well aware of this phenomenon and is probably the reason behind such large sums … lest they pick an ugly mug like me as their poster child as I can walk and wear clothes just as well as the next person.

    Just because it is socially accepted (by some) does not make it any less exploitative.

  44. Doug Coolen says:

    Found this link searching for confirmation/discreditation of the data.

    http://www.politifact.com/truth-o-meter/statements/2011/oct/10/facebook-posts/viral-facebook-post-ceo-worker-pay-ratio-has-obscu/

    Good research on the report and how the numbers are questionable. It seems more like an agenda item then factual. Remember, when someone is trying to tell you something, consider the credibility and the agenda of the source.

    • @Doug Coolen. Thanks we have posted links to this site before and debated it in the dozens of posts on this topic. I too think it is a useful piece of probing, but for me it changes nothing in the conclusion I draw from the data…CEO pay is crazily out of line with that of the workforce, who actually add the value and the conclusion ‘But in its claim that the U.S. ratio is 475 to 1, the chart conveys a sense of certitude and statistical precision that simply isn’t warranted — and which is contradicted by the facts. The latest number for the U.S. is 185 to 1 in one study and 325 to 1 in another — and those numbers were not generated by groups that might have an ideological interest in downplaying the gaps between rich and poor. We rate the claim on the U.S. ratio False. I happen to think this conclusion is directionally false and feels like it is driven by politics too. My own experience 32 years in corporations suggests as I have posted before is that not only is the ratio crazy 185:1 is bad enough for me leave alone 325…but it is totally unjustified by performance. Most corporation deliver very average results most of the time and brief bursts of success are followed by reversion to the mean. It is very doubtful CEOs make that much difference and the few game changing CEOs like Jack Welch or Alan Mulally are used to justify insane pay for mediocrities.

  45. Alpha says:

    The answer to the original source of your chart can be found within the link above from http://www.politifact.com

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  47. Dr. Delos says:

    The chart was produced by and is distributed by hardcore Union Sources. The Politifact research is good, but it leaves out one critical factor that skews the data on high earner averages. One Union source declares that the executive salaries were based on the highest 350 salaries out of the highest 400. With that much focused cherry picking, you can twist your stats to prove anything you want based on careful survey selections. The ratios and charts so widely disseminated by ‘Jobs With Justice’, ‘IPS’ and ‘United for a Fair Economy’ are *not* averages of all executives. All these NGOs are anti-capitalist and far left socialist sources.

    • @Dr Delos. I guess your comment may have considerable accuracy on sources, but is an Ad Hominem argument to some extent. The sources may well have had an agenda. Who doesn’t? I certainly suffer from confirmation bias: seeing data that confirms what I think. Don’t you? I work hard to overcome it.

      That said, I worked in corporate executive compensation at one stage and while the very high ratio may be stretching it a bit, I saw the move in the US and UK from CEOs earning perhaps 20 times their workforce’s average to vast multiples. And you only have to track the share of income going to the top 1% or the shift in UK/US Gini Index to see that there is a strong trend behind it. You might be a conservative who loves vast inequalities. I see them as a profound source of societal and economic instability.

      Also having met and worked with many CEOs of some major companies, I also don’t think most of the contributed enough value add to be worth more than 20-40 times their average worker. And I say that as a shareholder. It might help if you stopping seeing any analysis of economic inequality as by definition the work of the hard left who are virtually non existent these days by say 1970s standards. I have negotiated with Marxists and I don’t see any around any more. And Union hardcore: they are pussy cats to be honest.

      There is a real problem here whose causes are complex and whose solutions are not obvious but until we find systemic ways to bring far more people into high value add jobs and thus reduce the growing inherited wealth feudalism of our economy and alum and wealth based of our education system we are headed for real trouble. I don’t believe in revolutions but if you want one, growing extreme inequality largely unrelated to merit is a good way to foment one as events in the Middle East have suggested. Respectfully and thank you for your input on sources.

      PS Somewhere in this long thread, someone suggested where the data came from I think. I can’t find it immediately but it was not from union sources in their view as I recall. Who knows (or to some extent cares) where it came from. It certainly reflects in my own corporate experience very different ratios US versus Europe or Japan.

    • Al Winchell says:

      Ummm…so? How about Hollywood actors to CEO pay? An actor that worrks 10 weeks and gets 12 million, What does that work out to.? How about rock stars…?What difference doe it possibly make? One pesons high salary rarely has anything to do with someone elses. Silly.

      • @Al Winchell. Suppose Bill Gates owned everything and earned everything and only gave hand outs to folk he liked. Would that be fine with you? You like feudalism? I guess there are some folks who make good servants and do well out of extreme inequality. But yes it does make a difference and indeed it corrupts the political process and creates a plutocracy. So yes I care about it and yes unequal economies tend to be profoundly inefficient not to mention unstable. And China which has become very unequal will no doubt soon show the catastrophic instability that comes with it. And yes in companies I can assure you having run corporate compensation that one person’s salary is intimately connected with another’s. Indeed the reason CEOs pay is so high is that they all sit on each other’s compensation committees and have been bidding it up for no good market reason but out of sheer greed. I would not call you silly. That suggests a weak case. But I might think you ignorant of how the world of senior executives actually works and that is a world I know well.

      • Al Winchell says:

        Really so all the union contracts are based on what is “left over: after the CEO takes his share. You accept a job based on the pay scale offered. You take it or leave it. Your offered pay is not based on what the CEO makes. CEOs in most foreign contries are promoted from within so their salaries are usually NOT based on competition. Again. what difference does it make what a CEO makes compared to the average worker unless it causes the company to decrease his earnings? Do you think if we cut 2/3rds out of the CEO’s salary it would increase the pay of the workers? It would do nothing but serve to make them feel better. Inequity in anything makes no difference unless you plan to redistribute from the high to the low to even things out. Back to the film/entertainment business. Show me one example of a change in a CEO that effected a worked salary. If they got someone cheaper, would there be across the board raises? I worked on movies for years makeing app 2k a week the actor made sometimes as much a 1 mill or more a week. That is 500 times my pay. More came to them with residuals and perks, so I am sure it approached 800 to 1000 to one when all was said and done. Where is the outrage there? I worked longer hours and harder than they did. My choice was to take the job or not. The whining of “he makes more than me” applies to anyone and any job. A Dr. in Rural Mississippi makes a pittance compared to his Beverly Hills counterpart. This selective outrage is silly. We have been taught to hate the CEO’s. Perhaps you should complain about their performance and not their salary. A person’s worth is determined by those that are willing to compensate them. A private company is “private”. A public corporation has the chance to vote their thoughts. If you are not involved in the workings of that compay then it is none of your business unless they are taking that money from directly from you.

      • @Al Winchell no actually union contracts are an arm wrestle to see who gets what out of the revenue of a company. I have negotiated plenty of those in my career. Up to the executive level, most pay is decided by what is competitive and sometimes the union can get a bit more, sometimes a bit less. All is well until you get to executive level. Each level gets a bit more than the level below and has more responsibility. And for decades in the US, the CEO fitted neatly on top of the pyramid earning perhaps 20 times what a worker at the bottom earned. Then Jack Welch and others invented stock options that related pay to stock price. Jack has since said it was the worst idea he ever had because it detached CEO and other exec earnings from profits, contribution and performance, linked them to volatile stock prices that are easily manipulated in the short term. Indeed it gave an incentive to play the release of information to create stock peaks and troughs which is where stock option earnings are maximized. That is what drove CEO earnings to insane heights unmerited by market forces or performance. Now most CEOs only last a few years, and make no real difference to company performance. I know enough CEOs of big companies not to envy them. My point is that the system is profoundly dysfunctional for the shareholder as well as everyone else. Only a few CEOs like Jack Welch,Alan Mullaly, Steve Jobs really make much difference. The rest are over paid mediocrities and in some cases bullies and sociopaths I hear though I am fortunate not to have worked for such CEOs.

        I don’t know the movie industry well, but I doubt its structure is anything like the average business organization as most people are self employed talent aren’t they? And yes there are market forces that drive differentials but as a society we can decide how much to tax the higher earners and we can actually work to create a more equal society if we want some economic and political stability and the improving education across the board is a good way to do that. Income inequality does not drop from heaven; it is created by decisions we make as shareholders, voters, regulators, CEOs etc.

        Economists have proved fairly useless since free market fundamentalism took over economics. I trained as an economist before that happened and am rather more data based than those who came after. It might be interesting for you to consider that what you know from the movie business is only one perspective on reality. I use lots of different lenses on issues like this. Try it. Respectfully.Oh and your insights from the movie industry are interesting; I only know it as a consumer and reader of movie history though I did read an economic history of the industry over the last 100 years: I forget its title.

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  50. Larry Milton says:

    My local newspaper The Modesto Bee has had many articles lately about the counties and cities giving raises to their managers, based on what other cities etc are paying. Executive pay in general has gone sky high because someone convinced some boneheads that anyone who is in charge of more money should be paid more money, whether that person does more or smarter work or not. Now many of our cities and counties (and the state of CA) are nearing bancruptcy because of this nonthinking mindset. And we voted for the people behind this!!

    • @Larry Milton. Thanks Larry. It is not surprising that city managers bid each other’s wages up. That’s what CEOs do via sitting on each others’ compensation committees. I wish there were some real good measures of contribution. As it is City managers and CEOs get rewarded for slashing other peoples’ jobs and wages whatever the effect on services and operating efficiency. Indeed in the CEOs case their stock options motivate them to rig share price oscillations…As someone one said, most trends come to an end…

  51. annamanzo says:

    what happened to the graph here?

  52. duckshot says:

    I question how valid this chart is. In 2012 Canada was approximately 180:1 based on the top 100 CEOs earning an avg of 8.4 mil and the average worker earning 44k. Even if you take CEO pay in 2009 of 6.6 mil (from 2009 to 2012 a 27% increase) you still get a 150:1 ratio.

    Yes a far cry from 475:1 but not the same picture painted by the chart and I’m not even sure if the 475:1 is correct I thought I had heard it was closer to 320:1.

    • @duckshot. This graph has generated a lot of comment and a lot of good comments, so take a look at the comment stream too. I lived in a world of manufacturing where the plant manager typical earned about 5-8 times a production line worker, so anything much over 20 times blows my mind and I doubt is necessary from a market point of view, though of course a CEO is probably worth more than an average employee but not by huge multiples, especially as so many of them destroy rather than add value for their shareholders of which I am one.

  53. Sophia says:

    If you believe in our economic system, then it is obvious that certain workers, who the company needs to run optimally, would make more money, as a law of supply and demand, and the exact ratios are irrelevant. The graph is an indicator of a problem in our economic system. The money that is getting absorbed by the CEO has affected the amount that the average gets, and in our country, the average worker does not make enough to propel the economy. If we want to live in a society where everyone’s needs are met, and the society as a whole can exist and grow economically, then the ratio becomes much less significant, and larger incomes can be accepted and expected.

    • @sophia.I don’t ‘believe’ in our economic system so much as study it. That said I think markets are a great servant but a bad master. I trained as an economist and worked in a for profit manufacturing business for over 30 years. In that time I worked in executive compensation for a time so I know something about how executive pay is fixed and it bears almost no relation to free market forces. Executives typically fix each others’ pay by sitting on each others’ compensation committees. In the US they have inflated their pay via this process unbelievably; while in other countries it has not happened. Executive stock options are the biggest culprit, tying executive pay not to performance or profit but to stock price increases which encourage game playing to lower prices when options are issued and raise them when they are vested and can be cashed. This is really bad for shareholders and the economy, not to mention the companies. So the grossly exaggerated CEO pay is not just a fairness issue but an efficiency issue too.

      Markets are always decided by their structures and there is really no such thing as a ‘free market’. Even the Columbia drug cartels have rules and structures. I think you have hit on another key problem: the current distribution of income does not effectively drive our economic system as CEOs and the rest of the top 1% can only consume so much if they earn such a high proportion of our income. Henry Ford understood this when in about 1915 he raised his workers’ wages so they could afford to buy his cars.

      Thanks for your contribution.

  54. Nigel says:

    In Japan the CEO of Nissan mad 12.9 million. Last year the average CEO in America made 9.6 million. The average worker in America is around 50k. There are 150 million worker in America vs. 7000 CEOs. If you think you can be a CEO then do it. But don’t complain when somebody works there way up to being a CEO. In that case a good CEO that is paid accordingly.

    Look at athletes, talk show hosts, movie stars, basically everybody on TV. There is not that many of them and almost every single one make good money. If you look at the girls on The View they all make over a million a year jabbering on a talk show. You also have people that skew numbers that make a lot more like Oprah and Trump. But you never see anybody complaining that they make too much and they are people with huge chunks of land and houses that would take you and I months to walk through the whole thing.

    So what is fair? If you want to go that route? Is 1 million per year fair? 500k fair? then all the extra is to even out wages or goes to charity? Where is the incentive in that?

    Let us say that the extra is made to raise the wages of everybody else. Now instead of the average being 50k a year everybody is averaging 80k a year. I bet you living expenses goes up and the 80k still only buys the same amount as 50k. There has to be rich and poor for there to be any incentive to work. For examples just look at the first colonies of America and how they went from a share everything system to capitalism.

    • @Nigel. Nissan is French owned, and Mazda was Ford owned, and the CEO of Nissan is, I understand as a result, still paid more like an American CEO so what you cite while interesting, is a sample size of 1 and unrepresentative of Japanese CEO pay rates in my experience in corporate compensation work. The much larger and in the long run more successful Toyota’s CEO earned $1.54 million in 2011.

      As for the typical US CEO, the problem is that their pay does not actually reflect a market rate or their contribution. Take a look at the pay of S and P 500 CEO’s correlated with their companies profitability: very little correlation. CEOs rig their market by being on each others’ compensation committees, in a way sports and Hollywood folk are not, and fixing each others’s salaries on an upward spiral unrelated to performance. So I object to their pay as a shareholder who owns shares in every S and P 500 company via an index fund. But I have no power to force the pay to line up with performance and the mutual funds don’t seem inclined to either.

      I do complain about any form of unearned or disproportionate income and I do think show biz and other high earners should pay high marginal tax rates. In a world where a line assembly worker might earn $50k, it seemed fair to me that a plant manager should earn say $250,000 and a CEO of the whole shebang maybe a million or so like Toyota’s. It was like this until that last decade or so. And I don’t think anyone like a hedge fund manager should pay only 15% tax on their earnings because they are able to class them as capital gains. The latter should pay the same rate as any other income earner: the marginal tax rate for their income.

      It is not helpful to conflate the idea that income differentials are too high with the demand for full equality or ending incentives. Germany has an efficient economy that is also much more equal and has much stronger manufacturing sector rather than putting all its efforts in a Wall Street like casino sector that adds little real value. The US is trending towards Brazilian levels of inequality and it is really bad for economic efficiency, is actually bad for incentives because the top 1% rig markets against small and medium sized business owners like I now am and buy political power to do this via regulations and also to rig the tax system in their favor, with the net effect that the rest of us pay more tax than we need to and it is small business that generate most of the employment growth in an economy.

  55. Joe says:

    Just saw a graphic on twitter. It seemed possible so I retweeted and shared on Facebook. But I wanted to check facts before anyone even questioned. From PolitiFact the number is erroneous for current comparison as it was over a decade since those ratios for US existed. The are other issues with the chart as you can see as fact checked. Not that I don’t think CEOs are overcompensated.

    http://www.politifact.com/truth-o-meter/statements/2011/oct/10/facebook-posts/viral-facebook-post-ceo-worker-pay-ratio-has-obscu/

    • @Joe. Thanks for your interest. If you follow the comments to this posting there has been some great debate and the fact check link you post. In any event it is a good debate provoker which is all my blog is about: good conflict handling.

  56. Lourenzo Damas says:

    creativeconflictwisdom- most people miss some big points on this subject. CEOs as well as others like Movie Stars, Sports Stars, etc.. are not worth the money they earn. They should earn a reasonable salary but ALWAYS remember that it is the working folks who pay their salaries. We buy the movie tickets, game tickets and whatever consumer items the CEO is overseeing. The average workers are the lifeblood of the US economy. If CEOs pay lower salaries there is less money for workers to buy their products. Furthermore, it is immoral for a CEO to be making millions of dollars a year while the workers can barely live paycheck to paycheck. Think about this – If a CEO of a factory with 100 workers takes one month off to go on vacation, the factory continues to be operational a CEO is not needed, however, if the 1000 workers go on a one moth vacation, the CEO is useless, the factory is dead for a month. The workers are the power, yet get raped and enslaved by those who control the money. Better salaries means better taxes, healthier workers and happier families, less crimes. Imagine what family can live on a single salary today? In the 50s, 60s and 70s that was possible to live well on one salary. It is sad because our whole society would benefit if they paid the workers better instead of putting the money in the back collecting mildew because billionaires are set for life, they have no need of any more money other than being greedy.

    • @Lourenzo Damas. Excellent points. Indeed I worked in the auto industry and the relationship between workers and management salaries up to plant manager level was pretty reasonable but it was above that, in the level of corporate officers who in many ways decided their own salaries that the lunacy started. If an auto worked earned $50,000, a plant manager earned maybe $250,000-$300,000 while the CEO earned $45 million….One other point to add to yours: very unequal economies are very unstable. It is interesting that the last time the US economy was as unequal as today was in the 1920s and that led to the 1930s Depression. Not having widely distributed purchasing power in the hands of average workers leads to our current financial crisis as the rich have so much they don’t even know how to spend it. Thank you for your contribution.

  57. Lacey says:

    Creative, thanks for your blog. I read that story today about the Chinese laborer that stashed a plea for help in Chinese-made products. Stern, GOP comments started being written about “bringing jobs back to America,” and “corporations won’t cuz they can’t make it cuz of Obama and his taxes” followed. You can imagine where the conversation went. I completely disagree with this. It is the crap fed to us by greedy CEOs, but for people to not see through that…ugh…just annoys me. They SHOULD be taxed. They want ‘rights’ for the corporation entities, yet not the comparable responsibilities?! It can be said that corporations provide jobs (I say that when you show up to work and contribute, you have made your own job and contribute to the next person’s), but it can also be said that corporations consume so much more than the individual. They use the road system more. The future ecological, economical, and health costs are immeasurable considering the pollution that they contribute vs an individual, yet they think they deserve the tax breaks? I remembered seeing this chart a while ago, and went googling for it. That is when I came across your blog. I’ve enjoyed reading the comments. This is the exact reason why more jobs aren’t here. They could charge higher prices here, pay fare wages, and still be very comfortable if only they would let go of their greed. It is all about greed. Perhaps if they made 2 million instead of 20 million a year, they could make the product here, and keep the jobs here. The disparity between the average worker and the CEO is disgusting. It always does turn political. With those stock-piles, lobbyists can be paid, legislation can be written, and now they have money and real power. They can only build their fences so high. When their little Johnny pulls up in his elitist car, and is shot during a robbery by a desperate kid who grew up without health care, real parents, or an education, and has turned to crime to provide for his own kids….then maybe they’ll realize that they should have made decisions that bettered the WHOLE community instead of just selling their souls for mountains of cash.

    • @Lacey. Thanks for your comment. I quite agree and also would add that societies with high inequality are also very unstable; they tend to come crashing down because the majority of the people start to feel they have no stake in society for the reasons you outline.

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  59. jebediahv0n says:

    First let me say it has been interesting reading this ongoing discussion.

    So let me dive in and offer this perspective. Instead of worrying if it is okay for a CEO to make so much compensation, why not look at the math in the reverse: Shouldn’t a company that is paying its CEO that much pay its lowest workers more so that we spread the benefits to all when a company does well? I know we keep hearing about raising the minimum wage in America so that it is a “livable” wage, but instead of setting it as only a specific dollar amount, what if we set it as a ratio linked to the CEO’s pay. By having a ratio that we all agree is a fair ratio (and from the discussions so far somewhere around 100:1 seems like an acceptable norm) and by applying this same ratio to all companies, then and only then will we get the true “trickle down effect” that was promised in the past and at the same time we will not impact those small businesses that already have a very low ratio of “CEO” to average worker compensation. With this as a benchmark, BoDs can freely continue to offer pay rasies to the CEO’s but in so doing they will have to reward ALL of the folks contributing to the success of the organization if the CEO is near or at the ratio limit. For as important as a CEO is, they are nothing without the people who make the company go and so they should be ready and willing to “share the rewards with those who generated them”.

    Now as to the “social dynamic” of this politically imposed ratio: the logic originally put forth by the various BoDs for giving such incredible compensation packages was that it was needed in order to retain the best and brightest. Now these “best and brightest” will have a decision to make: Do I go to that Wall Street hedge fund, where I can not grow my compensation by gargantuan leaps or do I go to that smaller company that has a lower ratio and thus a greater opportunity for me to grow my compensation by gargantuan leaps? And by driving this “ambition” to these other opportunites we will encourage more innovation in the smaller companies so they become the next titans of the S&P. In this way we will get to see if these leaders are truly the difference makers or only following in the wake of others and enjoying the unbalanced pay practices that were created in the past . . .

    As a side note: Yes a large portion of a CEO’s pay should be stock options to show they have skin in the compnay they are leading, but this compensation should be treated the same as all other compensation and thus taxed equally.

    Just my two cents on this intellectual debate . . . now if only there was a petition on the White House website that we could all sign up for to support something like this (in the same way that putting a Star Wars Death Star in space was on their website and after collecting 25,000 signatures it forced an official reply from the White house) then we could move this from philosophy to practical application.

    • @jebadiahVon. Thanks, really interesting post. Let me give an alternative take on your points. I am all for profit sharing. My former company is paying every employee $8300 this year in profit sharing. And in the UK the John Lewis partnership owned by its employees is one the most successful retailers in hard times and has profit share. I don’t think the minimum wage can be replaced by a ratio to CEOs pay as the latter is too manipulable. $9 and indexed to inflation is the way to go. But any measures to make profit sharing more attractive I support.

      While stock options sound like they give skin the game, one of the major early proponents Jack Welsh of GE now says they are weapons of mass financial destruction because they lead to manipulation of short run stock prices when vested options can be exercised. CEOs spend too much time on this and not enough on the real business. Until 1995 my large former company was solely focused on cost, revenue and operating profit. They then totally lost sight of all this in the race to profit from stock options and nearly went bankrupt until they went back to the basics. Profit sharing is a far better way for all to have skin in the game. And yes you can take profit or loss in different years but over a period of time it comes out in the wash in a way stock option driven share price manipulation via release of good or bad news aka spin, does not.

      The real issue on CEO pay is that you do not need vast ratios over base employee pay to motivate. A typical plant manager in manufacturing, one of the toughest jobs on the planet earns about 5-10 times the workforce average. And CEOs earning perhaps another 5 times this for a large company is fine. And capital gains should be taxed as ordinary income so there is no incent to use stock options rather than pay or profit share for remuneration. Sorry to go on but this is an interesting field and your comments generative. Thank you.

  60. TonyGee says:

    This discussion of CEO’s Ratio of Pay… is only a distraction to the real problem but as I have in the past will entertain the discussion and add the real problem as I see it at the end.

    Many companies even, “Mom and Pops” offer profit sharing. It is in form of retirement accounts usually tax free until withdrawn at a time when the individual is at a lower tax rate most likely at age of 65. My understanding is 2-10% of ones pay can be contributed to this account which can be matched by the said Company. There is a system in place.

    When it comes to leadership making more then the employees I say, “Not So Fast.” We don’t have to look very far. Sports and Entertainment industry is were the players and actors are paid way more then the coach and directors who are leading the team to its completion. I would bet that the CEO of the Green Bay Packers makes maybe the same as say Brett did in his prime years back.

    Looking at the math in reverse as jebediahv0n has suggested then here is another angle. Total payroll of the company vs. the compensation of the CEO. I have no idea what percent or ratio one would put as being “Fare”. It could shed more light on the discussion. We must remember there are some industries that JUST Pay their employees significantly more then other industries BECAUSE the PROFIT of the one industry is way more profitable then another as well as the profession. Pharmaceutics vs. Restaurant. It takes less employees (man hour, who also are for the most part Doctors and Scientists) to produce, invent a medicine that is sold in a year then for a restaurant meal counts sold in that same comparison year,( rests. employees are mostly High School grads and collage students). The Pharmaceutical industry is protected under laws that prohibit other companies manufacturing and selling the drug that is newly invented for the first seven years. This does create an unintended consequence whole nother issue which could be related to the Ratio of CEO Pay…

    My point it is very difficult to make a Laws or a Requirements for CEO’s Pay when many of the industries cant be just lumped into, “One fits all” category. And more impotently We should not make them out to be this all encompassing, “ALL EVIL CEO’s” Because CEO Dose not = EVIL.

    Not to get off subject but the real “EVIL” is the the Banking industry primarily the, Federal Reserve and the Central Banks. !! And to put faces to them Ben S. Burnanke, along with the It’s Board, our Congressional Banking Comity and President current and past. These people are the most powerful they control the MONEY and it’s Supply. When they created over the past four-five years $5 Fricken TRILLION out of thin air and we now have to pay BACK with INTEREST to the BANKS. Who gets the FRICKEN PROFITS? YOU GOT IT the FAT CATS on WALL STREET the BANKERS. When I hear “Wall Street fat cats” I think of them the above people, and it makes me PISSED. CEO’s is just a distraction.

    Today I dare some one tell us all were is that $5 Trillion, WHERE is IT FOLKS, I can tell you. The Banks have most of it, Auto Co’s and Industry like it’s employees and Unions, The failed green energy co’s it’s employees including Management and yes CEO’s. I can go on and on but point made.

    Someone will say, “The Car industry paid back all the money.” To that I respond, “Correct they did, However the money just went into the genial fund and NOT toward the Debt, so in debt language it was kept only to be spent AGAIN, Damn-it That should piss everyone OFF.”

    • @Tony Gee. Great to have you back posting Tony. And a great set of observations. I would tend to take Banking out of the CEO analysis for pretty much the same reasons as you do. We are then left with the other big companies that actually provide needed goods and services. My problem with the high CEO pay is that it simply doesn’t reflect performance. And a shareholder in S and P 500 companies, I have no power to hold their feet to the fire. Many CEOs are useless and the turnover is high and they get golden farewells…yet shareholders don’t seem in the main to be able to get rid of the useless ones until damage is done. And the economy as a whole suffers from their collective incompetence and the fact they sit on each other’s compensation committees and jack up each others’s pay…

      And speaking as someone who lives in a very liberal college town, let me say that here small business owners who run restaurants, bookstores, small farms etc are thought of very highly and none of the animosity to CEOs of big companies seems to apply to small business owners. Indeed many of the liberal college students I know are setting up businesses of their own, given how hard it is to find a decent job these days. I would like to see government policy make it easier for small businesses and ensure large international companies pay their share of taxes to take the burden of everyone else. Oh yes and get rid of a lot of the waste in government, just as you would in a company that had too much weight on it. :) But I want vastly smarter government not no government. Lean Government would be my slogan….

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  62. Pingback: TIL that the ratio of CEO pay out to regular employee is 475:1 in the United States. It is eleven:one in Japan and twelve:1 in Germany. | Kush Collection

  63. Akio Morita – the founder of Sony, made the same comment (ratio of the salary of a CEO vs a worker) on the difference between organizational cultures in his comparison of US and Japan. In fact being an engineer at one point of time I wanted to find the ideal ratio that there should be! I considered the above stats as a Pyramid, and wanted to find the centre of gravity kind of stuff.. alas! the analysis is pending till date :P

    The book was – Made in Japan : Akio Morita and Sony

  64. Lacey says:

    Good post! We will be linking to this great content on our website.
    Keep up the good writing.

  65. The AFL-CIO’s Executive Paywatch has updated 2012 figures in this interactive map:

    http://www.aflcio.org/Corporate-Watch/CEO-Pay-and-You/CEO-to-Worker-Pay-Gap-in-the-United-States/Pay-Gaps-in-the-World#_ftn1

    [1]2012 U.S. CEO-to-worker pay ratio calculated based on AFL-CIO analysis of average CEO pay at 327 companies in the S&P 500 Index, which disclosed 2012 CEO pay data as of April 1, 2013, as provided by Salary.com. 2012 U.S. rank-and-file worker pay calculated from the U.S. Bureau of Labor Statistics’ Current Employment Statistics Survey—Table B-2: Average hours and earnings of production and non-supervisory employees on private non-farm payrolls.

  66. Pingback: Overpaid CEOs and Greedy Capitalists.. oh my! - Page 13 - US Message Board - Political Discussion Forum

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  68. Tony Gee says:

    The New Numbers are in from Bankrate article using Global management Consultant Hay Group.
    What I find note worthy is out of the Top 10 CEO’s seven of them work in the Entertainment/News, Insurance or Apparel industry, typically held with esteem by the left. Then there is GE who we all know is in bed with this administration, wich leaves the last two that may lean right, one in computers industry the other in production of copper and gold.

    http://www.bankrate.com/finance/jobs-careers/highest-paid-ceos-1.aspx

    If the study was complete it would show the political affiliation of these companies and more importantly the CEO themselves, but never will because in my betting hand has more of these way over paid CEO’s being liberal then conservative in the 300 companies the Hay Group looked at. These CEO’s are in fact the ones that we are exposing and talking about in this outrage on, “Ratio of CEO Pay to Average Worker by Country.”

    I truly feel I am looking at this in a objective way. I say Objective because what is not being told in this debate we have had over the years. In this case the article I have linked. I would love to be incorrect, that way I can change my views. I believe very strongly that the whole story is never really ever told. People will only expose what hurt them or what would help them, very seldom does one tell the whole story. Just state the facts that you want to and keep the flam burning to the side the author wants told to keep their agenda alive.

    So I challenge the these Managing Consultants of the world to step it up lets make it right. Who are these CEO’s? Where do they stand? Who can we call, “EVIL CEO’s” and who are not? Or is it you all want to keep the illusion that All CEO’s are overpaid and Big Companies are bad. I think it’s funny when people say, “I don’t shop at Walmart because the they make to much money.” But they will buy Mick Mouse and watch CBS or other entertainment where those people make equally to the ratio that CEO’s do to the average worker by county. Where is the article that reads entertainer Ratio to average worker by country? Is it by chance because the consultants of the world don’t want people to think about the beloved entertainers?

    My bet it will never get done because as long as the ill-informed and in some cases the people with less commonsense don’t see what’s really being fed to them in article’s like these. Then they keep the same false illusion that the other side is to blame and what’s keeping one down.

    • @TonyGee. I don’t think anyone on the left has much time for CEOs in any industry and certainly not finance, most of the media or apparel in the fashion sense. Wall Street apart from Vanguard, parts of the Stock Market, shipping, home and commercial insurance, and forex generally adds no value. As for me, I value CEOs who run value add businesses. Much of GE is value best I know. And there are a lot of good value add businesses. It’s just that I don’t think any CEO is worth more than a few $million a year. And I don’t think any hedge fund manager is worth a $1 billion a year which is what ten of them earned last year. It is the lack of proportion and the lack of relation between pay and contribution coupled with not wanting a very unequal feudal society with most wealth being inherited in vast billion $ lumps that concerns me. And it may be fashionable for some CEOs to be liberal and contribute to the Democrats but I will be convinced by it when they start demanding that the tax rate on capital gains is made equal to that on income. Warren Buffet to his credit is doing just that.

  69. Tony Gee says:

    Here’s something I find interesting what our president has said recently, “Oftentimes, you’ll hear some hedge-fund manager say, ‘Oh, he’s just trying to stir class resentment’. No. Feel free to keep your house in the Hamptons and your corporate jet, etcetera. I’m not concerned about how you’re living,” Obama said.
    “I am concerned about making sure that we have a system in which the ordinary person who is working hard and is being responsible can get ahead,” he said.

    What I find interesting and if one reads the article you get the impression, Obama helped the CEOs and or they’ve done well in his administration economy. What a telling-sign that corporations have done well and he is not concerned about how they the CEO’s live and he is NOT stirring the pot himself on class resentment, he loves the Over the Top Wealthy of the Hamptons, Hawaii and California. The Pres. needs them and Loves to rub elbows with the wealthy (Like all past Pres. they can demand up to $1million per speech). The time he comes down the peoples level is when it helps him like in the Travon case or the Professors case with the cop in Cambridge with the infamous, “Beer Summit”. Both totally local stories that blew-up National to feed to Obama because of Race. He took the bait only because it can help himself in the race-card National seen. Has his administration drawing us closer in unity or more divided in this country? Is he getting more people independent or more dependent?

    I have a hard time believing the President when he is not enforcing laws to protect the borders from job stealing invaders. Unless he is all for open borders to help NON-Citizens of his own country, If that’s the case then he is NOT the Pres. of the United States of America but the United States of the World. His world he sees in his mind not the people of this country. How is Being concerned about making sure that we have a system in which the ordinary person who is working hard and is being responsible can get ahead, When you have this flood of illegals coming into the work force….Who is this ‘ordinary person’ anyway that he speaks of?

    http://t.money.msn.com/business-news/newsarticle?feed=OBR&date=20140803&id=17828601

    I am addressing the Office of Pres. on the issue of CEO Pay because he has addressed himself as it is reported in the article.

    Bottom line it is my belief….. do I really need to say it again….I have said it over and over again and again….just pointing out again here in this post and article tells the story that Politics will say anything to make you and I to be a believer and to vote for them the “Political Santa” and the side who votes for their Santa wins….but in the end we all LOOSE because we gave them the power over us all, we need no farther then the IRS scandal. That reminds me does anybody remember the IRS Scandal I think it was in the 70’s or 80’s when hundreds if not thousands of overburden tax payers were committing suicide because of the IRS where threatening to take everything away from them to pay back taxes?

    • @TonyGee. The whole political system is corrupted by the wealthy; hence the need to overturn Citizens United. I don’t share your perspective on the President. But it seems at present the Republican party are suing him for exceeding his authority on ACA by delaying its introduction for small businesses at the request of small businesses, which they themselves supported. And the GOP has failed to pass a useful bill on border security, just a bs bill. And they are demanding the President use his executive authority to go beyond the law and deport minors contrary to the 2008 bill that George W Bush was so proud of. As for the IRS scandal, like Benghazi it is a total made up non event. And I have no data to suggest business suicides were driven by the IRS; people whose businesses fail sometimes commit suicide; the IRS is the least of their problems and yes we have to pay our taxes; I do and I am pretty hard line against tax evasion especially by the rich and want to the IRS to investigate the tax exempt status of every non profit.

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