[dbussone]

Originally Posted by Tennisnut

I really hope that wasn't a serious comment. Fortunately, others have provide some good insight on the lack of increase of compensation for employees.

I believe Gracie was speaking with her tongue in her cheek!

[Rags123]

As always, each side of the "aisle" over does the rhetoric. This message about CEO pay will be one of the sides main dish in 2016.

The Wall St Journal puts this public relations campaign in a bit of perspective...

"The AFL-CIO calculated a pay gap based on a very small sample—350 CEOs from the S&P 500. According to the Bureau of Labor Statistics, there were 248,760 chief executives in the U.S. in 2013.

The BLS reports that the average annual salary for these chief executives is $178,400, which we can compare to the $35,239-per-year salary the AFL-CIO uses for the average American worker. That shrinks the executive pay gap from 331-to-1 down to a far less newsworthy number of roughly five-to-one.
Of course, it’s true that some chief executives heading large multinational companies do command impressive seven- or eight-figure compensation packages. But the data don’t support the rhetorical claim that this slice of the “economic pie” is what’s driving stagnant pay for others on staff."



They go on and give a real life example using YUM brands, the corporate owner of Pizza Hut, Taco Bell, and KFC to name 3 of their companies.

"The company’s 2013 annual report indicates that it employs 539,000 people, 86% of whom work part-time. If the executive team were able to redistribute 25% of their salaries, incentive pay and stock options to these part-timers, the net impact on hourly pay would be just over a penny-per-hour raise before taxes.

Even if the executive team took a 100% pay cut and distributed the money equally to the company’s 463,000 part-timers, hourly wages would only rise by five cents."

And they conclude the article....

"The point is not that CEOs deserve more money, or less. If an executive is underperforming, the corporation’s board can and should adjust his pay appropriately or terminate his employment. And if the CEO is making the shareholders rich, the board might increase his compensation. But neither voters nor policy makers should make poorly informed decisions about redistributive public policies based on a faulty understanding of how much executives are paid and why entry-level employees aren’t paid more."

Mark Perry and Michael Saltsman: About That CEO/Employee Pay Gap - WSJ

The point is, not matter the issue....does not matter. If you are going to have an intelligent discussion of that issue, you must give context to that discussion or it means nothing whatsoever.

[dbussone]

Thanks for the research Rags; nicely done.

[Chi-Town]

Getting back to the original post the S&P is up 1/2%. If you want bad news go back 5 years

[njbchbum]

Chi-town - Who is benefitting from that 1/2%?

[Rags123]

Originally Posted by Chi-Town

Getting back to the original post the S&P is up 1/2%. If you want bad news go back 5 years

I didnt bring it up...simply reponded to another post, but would be interested in your input on the question asked by njbchbum.

The thread was started NOT to discuss economics or even our economy, and your post is not meant that way either I do not believe although cannot read the op's mind. However I am open to a discussion on the economy without the p........ aspect of it, but will wait to get your input.

Thanks

[2BNTV]

I believe the topic is how well the stock market is doing and not CEO compensation.

Back to the original topic!

[Chi-Town]

Originally Posted by njbchbum

Chi-town - Who is benefitting from that 1/2%?

That's a good question. There are many of us with no pensions for income. And for a lot Social Security has not begun and in most cases is not enough to live on. But interest rates were high and corporate bonds were at par, and you could get an income stream from them. Of course, that model has changed.

Some time ago my financial advisor said that contrary to a natural inclination to become very conservative in your asset mix that equities need to be a higher percentage than I was comfortable with. But I followed the advice. Once a year I sell 4% of my portfolio. The advisor picks the mix. I understand that this formula is far from unique to me.

A higher market let's me cash in for the year and may cushion the next withdrawal during a down year. I retired at the beginning of 2010 and switched to a higher equity mix in an up market. So I bought at yearly highs which was a hard concept but it has worked out due to the bull market. Another thing the advisor said was there were very few places for investors to put their money other than equities which creates a demand for them.

The 4% can be tweaked as circumstances dictate. Your money should outlive you.

[Rags123]

The OP made a relationship between the stock market and our economy and the best way to respond to that is to simply show snippets from the experts...

From the Economist...

"An oft-quoted argument for investing in emerging markets is their superior economic growth. But the professors have pointed out in the past that economic growth and equity returns are not correlated at all. Jay Ritter of the University of Florida has a paper on the same issue. If this lack of relationship seems odd, the professors' argument is more subtle; yes, it would be useful to be aware of future economic growth. But being aware of past economic growth does not help; or rather, it is a a contrary indicator. You would be best placed investing in the slower-growing economies of the past, not in the fastest."

Growth and markets: A puzzling discrepancy | The Economist

"In fact, there is little relationship between the magnitude of GDP growth and stock market performance."

Read more: Little Relationship Between Stocks, GDP - Business Insider


But to the point about being OFF THREAD SUBJECT, we really werent. There are many who think the economy is steaming but everyone is not sharing, thus the conversation relative to who is enjoying this trend. I believe the conversation was well in line with the thread topic.

The big number is the growth in GDP versus the growth of median income.

While there are a lot of good signs, in the last few years, the gap between the two had widened more than in any years since the beginning of 2000.

Without serious tax reform and an overhauling of entitlements, that gap is going to widen.

The market is not ever going to make our economy better so the 18000 is nice to applaud, it does not push sufficient growth for everyone to enjoy the fruits.

Let us hope that our new congress can work together to get some of this done and then we can cheer loudly.

[JoMar]

Originally Posted by eweissenbach

Try this again.

CEOs Earn Nearly 300 Times What Their Workers Make | ThinkProgress

And have 300 times the risk and responsibility of their workers.......generally.

[eweissenbach]

Originally Posted by JoMar

And have 300 times the risk and responsibility of their workers.......generally.

I would agree IF you were talKing strictly about entrepreneur CEOs, however the CEOs of most Fortune 500 companies have little or no skin in the game aside from the value of their stock options. Responsibilility, yes, but often the underlings answer for poor performance, while the CEO, convinces the shareholders that it was their fault rather than his/hers, or decides that a massive layoff to cut payroll will make the bottom line look better. Now some CEOs are worth every penny, but I am not convinced most are. On the other hand, entrepreneurs, such as Morse, are worth all they accumulate because they did take all the risk and created a stellar product out of dirt.

[dbussone]

You may be correct about "most" but I personally know the ceo of the company ranked 324 on the 500 list. Alan Miller founded Universal Health Services (UHS) in 1979. He is the chairman and ceo. The company provides health care to millions each year and employs 80,000 people. Revenue is about $8B. He is as nice as they come, and his salary is well below that of other Fortune 500 companies CEOs. I know-he is not typical and my notation is anecdotal-nonetheless it is a factual account.

[Rags123]

Originally Posted by eweissenbach

I would agree IF you were talKing strictly about entrepreneur CEOs, however the CEOs of most Fortune 500 companies have little or no skin in the game aside from the value of their stock options. Responsibilility, yes, but often the underlings answer for poor performance, while the CEO, convinces the shareholders that it was their fault rather than his/hers, or decides that a massive layoff to cut payroll will make the bottom line look better. Now some CEOs are worth every penny, but I am not convinced most are. On the other hand, entrepreneurs, such as Morse, are worth all they accumulate because they did take all the risk and created a stellar product out of dirt.

That is quite a huge generalization you make about CEO's. I am sure that folks like Mark Zuckerberg, Jeff Bezos, Bill Gates, Warren Buffet, Steve Jobs/Tim Cook might disagree with you totally especially the "skin in the game comment".

Your generalization is impossible to prove and just as impossible to disprove except to ask you to get a list of the Fortune 500 CEOs and read their bio's. I have done that (NOT ALL MIND YOU), and these are men of singular abilities who for the most part are rewarded with stock options which are a direct result of their abilities.

I am not sure your source for such a sweeping statement..."often the underlings answer for poor performance, while the CEO, convinces the shareholders that it was their fault rather than his/hers, or decides that a massive layoff to cut payroll will make the bottom line look better. "

I just know that reading about Fortune 500 CEO's is more an inspiring record of achievement than what you are presenting. Most of this men/women have been working hard in the backgrounds of these companies before assuming the control.

I certainly cannot convince you relative to your comment..."Now some CEOs are worth every penny, but I am not convinced most are." because you give no concrete information as to how you arrived at that conclusion.

I find reading autobiographies of CEOs to be some of the most stimulating reading and by the way inspirational. Jack Welch at GE was a great one, and is the first that comes to mind that I have read along with Steve Jobs, Lee Iacocca, Jeff Bezos and a few others I have read.

There surely are bad guys or gals who have been or are CEO's but there are bad union leaders as we all know...and bad any occupation you might want to mention.

I find the vast majority of CEOs to offer a lot of inspiration to anyone who might research them and when you are a CEO of a Fortune 500 company, you have no where to hide at all.

I might add that this topic seems, for some reason to be tied to economic inequities, that most of these men give BILLIONS upon BILLIONS to charity.

[dbussone]

Originally Posted by Rags123

That is quite a huge generalization you make about CEO's. I am sure that folks like Mark Zuckerberg, Jeff Bezos, Bill Gates, Warren Buffet, Steve Jobs/Tim Cook might disagree with you totally especially the "skin in the game comment".

Your generalization is impossible to prove and just as impossible to disprove except to ask you to get a list of the Fortune 500 CEOs and read their bio's. I have done that (NOT ALL MIND YOU), and these are men of singular abilities who for the most part are rewarded with stock options which are a direct result of their abilities.

I am not sure your source for such a sweeping statement..."often the underlings answer for poor performance, while the CEO, convinces the shareholders that it was their fault rather than his/hers, or decides that a massive layoff to cut payroll will make the bottom line look better. "

I just know that reading about Fortune 500 CEO's is more an inspiring record of achievement than what you are presenting. Most of this men/women have been working hard in the backgrounds of these companies before assuming the control.

I certainly cannot convince you relative to your comment..."Now some CEOs are worth every penny, but I am not convinced most are." because you give no concrete information as to how you arrived at that conclusion.

I find reading autobiographies of CEOs to be some of the most stimulating reading and by the way inspirational. Jack Welch at GE was a great one, and is the first that comes to mind that I have read along with Steve Jobs, Lee Iacocca, Jeff Bezos and a few others I have read.

There surely are bad guys or gals who have been or are CEO's but there are bad union leaders as we all know...and bad any occupation you might want to mention.

I find the vast majority of CEOs to offer a lot of inspiration to anyone who might research them and when you are a CEO of a Fortune 500 company, you have no where to hide at all.

I might add that this topic seems, for some reason to be tied to economic inequities, that most of these men give BILLIONS upon BILLIONS to charity.

Again, right on Rags. See my post about Alan Miller and Universal Health Services one post above.

[Rags123]

Originally Posted by dbussone

You may be correct about "most" but I personally know the ceo of the company ranked 324 on the 500 list. Alan Miller founded Universal Health Services (UHS) in 1979. He is the chairman and ceo. The company provides health care to millions each year and employs 80,000 people. Revenue is about $8B. He is as nice as they come, and his salary is well below that of other Fortune 500 companies CEOs. I know-he is not typical and my notation is anecdotal-nonetheless it is a factual account.

You stimulated me to read up on your friend, and as I say, most of the Fortune 500 CEOs are really inspirational. A very quick check of Wiki to find out more about him...

"Throughout his career, Alan Miller has been an ardent supporter of education for students of all economic backgrounds. He served on the executive board of the Wharton School of the University of Pennsylvania, and is currently a member of The Board of Overseers of the internationally known business school.

He has served as a trustee of The College of William & Mary Endowment Fund and is a life member of the college’s President’s Council. In 2007, the College of William & Mary announced the creation of the Alan B. Miller Center for Entrepreneurship in recognition of Miller’s extensive support for his alma mater. The center, as well as the entire Mason School of Business at the College of William & Mary, will be housed in the new Alan B. Miller Hall. Miller has also served as trustee of the William & Mary Endowment Fund and Is a life member of the school’s President’s Council.

In addition to his work with the business school at the College of William & Mary, Miller also funded the construction of the campus gymnasium and established liberal arts and basketball scholarships to honor his parents, Mary and Manuel. Miller’s involvement is not limited to colleges where he studied. For example, when the University of South Carolina Aiken needed help persuading the state legislature to fund the construction of a new building for its nursing school, he provided a significant financial gift that made it possible to get the remainder of the money it needed from the state of South Carolina. Today, the Alan B. Miller Nursing Building stands on the campus as a reminder of Alan's spirit of community involvement. In 1995 Miller received an Honorary Doctorate in Business Administration from the University of South Carolina Aiken.

He has also served as the chairman of the Philadelphia United Negro College Fund Corporate Campaign, and received that organizations Chairman’s Award in 1996. The Juvenile Diabetes Research Foundation, an organization in which he was active for years, has also honored Miller.

A lover of the opera, Miller is chairman emeritus of the Opera Company of Philadelphia and also serves as a director of the Kimmel Center for the Performing Arts in Philadelphia."

You should be very proud to have him as a friend, and again, in my opinion he is more prototypical of CEO's of large companies than anything.