Monday, December 29, 2008

CEO Joe Is Worth 344 Times More than Average Joe

Is it possible for someone's work to be worth 866 times more than another person's or are oligarchical corporations exploiting American workers? The average Fortune 500 CEO makes 866 times more money than a minimum wage employee.

Exploitation is no longer an "overseas" occurrence. "Last year, average CEO pay rose 2.6 percent to $10,544,470, according to an Associated Press survey of S&P 500 firms. That’s 344 times the pay of an average American worker. The gap between CEO's and minimum wage workers runs even wider. In 2007, CEO's averaged 866 times as much as minimum wage employees." (Taken from http://www.faireconomy.org/files/executive_excess_2008.pdf)

"There has been a massive shift of income from the bottom and middle to the top. The richest 1% of Americans has increased their share of the nation’s income to a higher level than any year since 1928—the eve of the Great Depression." (Taken from http://www.letjusticeroll.org/pdfs/Why10in2010.pdf)

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3 comments:

  1. Jon or EricDecember 30, 2008 at 3:22 PM

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  2. Jon or EricDecember 30, 2008 at 3:23 PM

    I like the stats Dave. I wonder if people who make that kind of money ever feel 344 times worse for messing around on the internet when they should be working - compared to the average employee. Something is definitely wrong with the system when you're seeing those kinds of numbers. A company could theoretically eliminate the CEO and double the salaries of 344 of their average employees. The added boost of production from those 344 would easily overcome the benefit of one incredibly overpaid person, no matter how smart or capable that person is.

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  3. David SJanuary 12, 2014 at 3:48 PM

    "What really distinguishes CEOs from the rest of us, for instance? In 2010, three professors at Duke’s Fuqua School of Business asked roughly 2,000 people to look at a long series of photos. Some showed CEOs and some showed nonexecutives, and the participants didn’t know who was who. The participants were asked to rate the subjects according to how “competent” they looked. Among the study’s findings: CEOs look significantly more competent than non-CEOs; CEOs of large companies look significantly more competent than CEOs of small companies; and, all else being equal, the more competent a CEO looked, the fatter the paycheck he or she received in real life. And yet the authors found no relationship whatsoever between how competent a CEO looked and the financial performance of his or her company." http://www.theatlantic.com/magazine/archive/2013/12/theyre-watching-you-at-work/354681/

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How Will You Measure Your Life?

I recently read this article by Clayton Christiansen out of Harvard entitled, “How will you measure your life?” It is what he tells his students on the final day of his class.

One of the items that he mentions sticks out to me. It reads as follows:

“One of the theories, . . . . . how to be sure we find happiness in our careers—is from Frederick Herzberg, who asserts that the powerful motivator in our lives isn’t money; it’s the opportunity to learn, grow in responsibilities, contribute to others, and be recognized for achievements. I tell the students about a vision of sorts I had while I was running the company I founded before becoming an academic. In my mind’s eye I saw one of my managers leave for work one morning with a relatively strong level of self-esteem. Then I pictured her driving home to her family 10 hours later, feeling unappreciated, frustrated, underutilized, and demeaned. I imagined how profoundly her lowered self-esteem affected the way she interacted with her children. The vision in my mind then fast-forwarded to another day, when she drove home with greater self-esteem—feeling that she had learned a lot, been recognized for achieving valuable things, and played a significant role in the success of some important initiatives. I then imagined how positively that affected her as a spouse and a parent. My conclusion: Management is the most noble of professions if it’s practiced well. No other occupation offers as many ways to help others learn and grow, take responsibility and be recognized for achievement, and contribute to the success of a team. More and more [people think] that a career in business means buying, selling, and investing in companies. That’s unfortunate. Doing deals doesn’t yield the deep rewards that come from building up people."

I’m sure you can see why it sticks out.