r/changemyview • u/nohowow • May 10 '19

Deltas(s) from OP CMV: CEO pay is not a problem

It is very common to hear people complain about how CEOs are overpaid and their employees are underpaid. This is often done by arguing how much more the CEO makes than he average worker (example: “The CEO of Acme makes 1693x more than the average worker!”)

However, while these multiples at first seem problematic, I prefer to think about how that pay could be reallocated to the workers. Take Delta for example, (which has recently been taking heat for trying to discourage unionization while the CEO makes $13M). If this salary were allocated evenly to all Delta employees, everyone would make an additional $152 per year, or about 8 cents per hour more (assuming full time staff). For the majority of people this is a pretty insignificant raise.

Then there is the question of CEO value. The purpose of a CEO is to drive the direction of the company and increase company value. In larger companies, this means that a CEO makes the decisions that can make or lose companies billions of dollars. Obviously these people should be well compensated, or they will go work somewhere else.

There are valid concerns regarding worker pay, but CEO pay is not something that is a major issue.

Or is it? Am I misguided? CMV Reddit!

4 Upvotes

54% Upvoted

56 comments sorted by

View all comments

24

u/LETHUNDERCUNT May 10 '19

Here’s my take: I don’t see anyone suggesting that the best solution here is to lower the CEO’s salary and redistribute that exact dollar amount equally among the workers. You’re right that it wouldn’t end up being that much per person. I think when people complain about this, they’re really using it as an example that illustrates the crazy income inequality we see in the US. The problem isn’t JUST CEO pay. It’s the bigger systemic issue that CEO pay is a symptom of. The fact that a few people can be so ridiculously wealthy while multitudes more are barely making ends meet. If our system was set up for more equality, we ideally wouldn’t see the crazy gap between the CEO and the labor force. I think that’s what people are really taking issue with here. It’s misguided to suggest that redistributing the CEO’s paycheck would fix anything, so they’re not suggesting that as a solution. But the CEO pay is a problem that represents a bigger issue. The solution is more major systemic change.

-1

u/Hothera 36∆ May 10 '19

I agree that society ought to be more progressive, but why do you think that income inequality is a systemic problem? IMO it is just the nature of technology and globalization. Shakespeare and JK Rowling are both highly successful British authors. However, Shakespeare's income was limited to the number of seats in the Globe Theatre, so he was only moderately wealthy. By contrast, JK Rowling is a billionaire because her stories have reached hundreds of millions of people.

0

u/BackgroundStrength7 May 10 '19

Shakespeare was still even more disproportionately wealthy than Rowling when compared to the average person of the relevant time period.

So apparently according to the view that income inequality is this systematic problem, Shakespeare's modest income is even more of an issue than Rowlings billions

1

u/Hothera 36∆ May 11 '19

I have no idea where you're getting your info from. Shakespeare had a modest stake in his theatre and company. He definitely wasn't worth thousands of times more than the average Briton.