First off, if the reason to disclose pay is for the benefit of people negotiating their own salaries then executives don't need to be included. It isn't relevant to rank and file employees what the CEO or COO makes because they are not negotiating for that position. People who are being hired for those kinds of positions are generally savvy negotiators (and can hire counsel to negotiate for them) so they don't have the same kinds of risks that rank and file employees have. So that rational does not apply.
Second, it is not inconsistent for a company to have different policies for executives and rank and file employees. It is actually extremely common. Incentive compensation is of very questionable merit for people who don't have a lot of power to influence the performance of the company, but a CEO or COO is in a different category, and it is preferred by the law and every independent corporate governance group in the world for executives to mostly receive performance based compensation. It is accurate to say that the company doesn't have a culture of bonuses for its employees, they are just leaving out that the executives are treated differently, but that doesn't change the culture. Most places that say they don't pay bonuses culturally do it because they pay higher base salary instead, so the employees better understand their compensation and can better plan.
First off, if the reason to disclose pay is for the benefit of people negotiating their own salaries then executives don't need to be included. It isn't relevant to rank and file employees what the CEO or COO makes because they are not negotiating for that position. People who are being hired for those kinds of positions are generally savvy negotiators (and can hire counsel to negotiate for them) so they don't have the same kinds of risks that rank and file employees have. So that rational does not apply.
Second, it is not inconsistent for a company to have different policies for executives and rank and file employees. It is actually extremely common. Incentive compensation is of very questionable merit for people who don't have a lot of power to influence the performance of the company, but a CEO or COO is in a different category, and it is preferred by the law and every independent corporate governance group in the world for executives to mostly receive performance based compensation. It is accurate to say that the company doesn't have a culture of bonuses for its employees, they are just leaving out that the executives are treated differently, but that doesn't change the culture. Most places that say they don't pay bonuses culturally do it because they pay higher base salary instead, so the employees better understand their compensation and can better plan.
I work in a public salary field and what that effectively means is we can't get raises for anything. Your only option is promotion, and as no office really has the ability to actually promote with the arcane public sector laws we have, you only way of advancement is typically to bounce between job to job (and city to city) taking stairsteps up, making no long term options in any location.
Functionally speaking it is terrible for workforce productivity because you can't keep any talent in one place, and even if you want to you have no ability to promote within budget class. So you lose talent as soon as they become capable of the work because they know you can't promote, meaning you always have under-trained employees or those who have reached their level of competence and are generally on the decline.
This seems like a failure of your employer, not the idea of public salaries at all.
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spacekungfumanPoor and minority-filledRegistered User, __BANNED USERSregular
Public companies have to disclose a lot of information about the comp of their top officers. Its a major hassle to prepare, and costs quite a bit to prepare, but its all out there. Private companies are different, and private shareholders don't have that right.
Executive pay is also VERY rarely significant enough to effect the investments of the shareholders. Pay increases across the board for workers could easily be though. I have seen clients pass on buying otherwise attractive companies because the cost of providing health insurance on a go forward basis to a population that did not previously receive benefits was prohibitive.
I've just been conditioned by having to deal with recruiters and interviews and constantly being told that my salary is basically mine and that as soon as I disclose it, my new potential employer now has all the leverage over me, versus giving them a "target" salary. This advice been hammered into pretty much anyone in the professional circle.
So what you're basically saying is that, now everyone can see everyone else's salaries, so I know exactly how much money they'd offer for the position, so that would have stopped me from interviewing in the first place because I would have had no incentive to jump ship.
So I read through the rest of this thread and haven't really seen this adequately addressed. Giving future employers information about your current salary gives them a huge amount of leverage. I feel like publicly disclosing salaries would increase the negotiating powers of employers as well as that of employees. And I'm not really convinced that the employees would manage to come out on top. Unless we make other changes the power is still going to be in the hands of the employer the majority of times due to the oversupply of workers.
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ElJeffeNot actually a mod.Roaming the streets, waving his gun around.Moderator, ClubPAmod
I have literally never applied for a job that didn't require me to disclose my current salary. I didn't know not disclosing that was even a thing.
Either way, you can get around this by having the prospective employer just give the salary, or a range, in the job posting. Instead of the usual bullshit about "based on experience" or "market value". Which is just weasel language to avoid having to give the employee any information with which to negotiate.
Also, not quite getting why executives should be immune to pay disclosure, if the ostensible reason is to let people know if they're being screwed. If your company is lying about policy so they can secretly give bonuses to the CEO to maintain the status quo of the exclusive executive clubhouse, that is screwing over the employees.
I submitted an entry to Lego Ideas, and if 10,000 people support me, it'll be turned into an actual Lego set!If you'd like to see and support my submission, follow this link.
Public companies have to disclose a lot of information about the comp of their top officers. Its a major hassle to prepare, and costs quite a bit to prepare, but its all out there. Private companies are different, and private shareholders don't have that right.
Executive pay is also VERY rarely significant enough to effect the investments of the shareholders. Pay increases across the board for workers could easily be though. I have seen clients pass on buying otherwise attractive companies because the cost of providing health insurance on a go forward basis to a population that did not previously receive benefits was prohibitive.
Private companies are a bit different, but I would think that it would certainly be unethical for an executive to fail to disclose their compensation to stakeholders like equity partners or investors. In your example, you said that employees were compensated fairly because they had an equity stake, but the money an executive raids from the company indisputably hurts that equity and thus those employees.
You could just as easily make an argument that embezzlement is VERY rarely significant enough to effect the investments of the shareholders as well. In fact, I would go so far as to say that an executive who is taking an undisclosed bonus behind closed doors is damn close to embezzlement. The fact that it's technically legal still doesn't make it proper or ethical.
Again, back to the cheating thread a few weeks ago. If you think it's something that needs to be kept a secret, you probably shouldn't do it.
As for the fact that payroll frequently effects the investments...no kidding. Every expense, from employee pay / benefits to material costs to office space effects the investments. Arguing that it doesn't is like arguing that theft is ok as long as it's only a little bit, or that the victim isn't hurt if they don't know.
I think it's telling that executive level pay has been consistently on the rise over the last 30-40 years, and they typically have very good knowledge of what the earnings/packages are for executives of the types of companies they're applying for.
And usually, though there are rare exceptions, they are offered no less than the mean going rate. This has the natural effect of slowly but surely pushing the salaries every higher over time. Anytime someone takes a compensation package higher than the mean, the mean goes up, and that becomes the new normal for pay.
This has worked wonders for executives, why wouldn't it be beneficial for rank and file employees?
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EncA Fool with CompassionPronouns: He, Him, HisRegistered Userregular
I work in a public salary field and what that effectively means is we can't get raises for anything. Your only option is promotion, and as no office really has the ability to actually promote with the arcane public sector laws we have, you only way of advancement is typically to bounce between job to job (and city to city) taking stairsteps up, making no long term options in any location.
Functionally speaking it is terrible for workforce productivity because you can't keep any talent in one place, and even if you want to you have no ability to promote within budget class. So you lose talent as soon as they become capable of the work because they know you can't promote, meaning you always have under-trained employees or those who have reached their level of competence and are generally on the decline.
This seems like a failure of your employer, not the idea of public salaries at all.
Its a failure of how our state system works, but also one that inevitably happens in a non growing budgetary environment. When budgets are slowly decreasing, no one can or will promote. If your organization is always growing, great! Promotions for everyone. Else, you will see job attrition. This is fairly common in many public sector economies.
Is the idea that there'd be a list of everyone in the country and how much money they made? Or is it more a list of exact job titles at each company and the amount each one made, with the understanding that sometimes that info would be enough to identify someone?
I'd be fine with companies just reporting min/mean/max (maybe std dev) for each title in the company, along with a general outline of the experience/etc for each title.
Edit: To fit in with the thread, my gross salary is $80k/yr as a software engineer. My net take-home after taxes, insurance premiums, etc, is probably under $50k.
I should make a GDST about insurance premiums suppressing real salaries. My dad pays a lower annual premium as a retiree than my monthly rate, for similar (if not better) coverage.
Not on non-Senior titles, except on the West Coast and in the NE Megapolis. But I can afford a house here, so...
And like I said, I suspect that I'm being underpaid, even within the company.
a5ehren on
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CambiataCommander ShepardThe likes of which even GAWD has never seenRegistered Userregular
I think my favorite thing about this thread so far is SKFM's worry that if we don't give extra bonuses to executives, then no one would want to be an executive and we'd lose this precious non-renewable resource.
Oh SKFM.
"If you divide the whole world into just enemies and friends, you'll end up destroying everything" --Nausicaa of the Valley of Wind
Is the idea that there'd be a list of everyone in the country and how much money they made? Or is it more a list of exact job titles at each company and the amount each one made, with the understanding that sometimes that info would be enough to identify someone?
I'd be fine with companies just reporting min/mean/max (maybe std dev) for each title in the company, along with a general outline of the experience/etc for each title.
Edit: To fit in with the thread, my gross salary is $80k/yr as a software engineer. My net take-home after taxes, insurance premiums, etc, is probably under $50k.
I should make a GDST about insurance premiums suppressing real salaries. My dad pays a lower annual premium as a retiree than my monthly rate, for similar (if not better) coverage.
I'd rather have min Q1 med Q3 max myself, but then you get a better sense of the data shape. I don't know how normal salary can be expected to be.
I have literally never applied for a job that didn't require me to disclose my current salary. I didn't know not disclosing that was even a thing.
Either way, you can get around this by having the prospective employer just give the salary, or a range, in the job posting. Instead of the usual bullshit about "based on experience" or "market value". Which is just weasel language to avoid having to give the employee any information with which to negotiate.
Also, not quite getting why executives should be immune to pay disclosure, if the ostensible reason is to let people know if they're being screwed. If your company is lying about policy so they can secretly give bonuses to the CEO to maintain the status quo of the exclusive executive clubhouse, that is screwing over the employees.
How are the employees screwed over? They aren't being paid less so the executives can be paid more. Most of the bonuses for executives are based on metrics that relate to financial information that wouldn't be disclosed to the employees. In many cases, executive salary is actually lower than what they made at a prior company to shift it into more desirable performance based pay. That is what the owners normally want, not a shrewd secret way to get paid more. How are the employees harmed if the CEO gets $250k base and a chance at a 100% bonus vs $500k base and no bonus?
I have literally never applied for a job that didn't require me to disclose my current salary. I didn't know not disclosing that was even a thing.
Either way, you can get around this by having the prospective employer just give the salary, or a range, in the job posting. Instead of the usual bullshit about "based on experience" or "market value". Which is just weasel language to avoid having to give the employee any information with which to negotiate.
Also, not quite getting why executives should be immune to pay disclosure, if the ostensible reason is to let people know if they're being screwed. If your company is lying about policy so they can secretly give bonuses to the CEO to maintain the status quo of the exclusive executive clubhouse, that is screwing over the employees.
How are the employees screwed over? They aren't being paid less so the executives can be paid more. Most of the bonuses for executives are based on metrics that relate to financial information that wouldn't be disclosed to the employees. In many cases, executive salary is actually lower than what they made at a prior company to shift it into more desirable performance based pay. That is what the owners normally want, not a shrewd secret way to get paid more. How are the employees harmed if the CEO gets $250k base and a chance at a 100% bonus vs $500k base and no bonus?
The employees and management have to share money from the same company profits, yes? Only so much to go around.
I have literally never applied for a job that didn't require me to disclose my current salary. I didn't know not disclosing that was even a thing.
Either way, you can get around this by having the prospective employer just give the salary, or a range, in the job posting. Instead of the usual bullshit about "based on experience" or "market value". Which is just weasel language to avoid having to give the employee any information with which to negotiate.
Also, not quite getting why executives should be immune to pay disclosure, if the ostensible reason is to let people know if they're being screwed. If your company is lying about policy so they can secretly give bonuses to the CEO to maintain the status quo of the exclusive executive clubhouse, that is screwing over the employees.
How are the employees screwed over? They aren't being paid less so the executives can be paid more. Most of the bonuses for executives are based on metrics that relate to financial information that wouldn't be disclosed to the employees. In many cases, executive salary is actually lower than what they made at a prior company to shift it into more desirable performance based pay. That is what the owners normally want, not a shrewd secret way to get paid more. How are the employees harmed if the CEO gets $250k base and a chance at a 100% bonus vs $500k base and no bonus?
Are you sure?
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spacekungfumanPoor and minority-filledRegistered User, __BANNED USERSregular
I have literally never applied for a job that didn't require me to disclose my current salary. I didn't know not disclosing that was even a thing.
Either way, you can get around this by having the prospective employer just give the salary, or a range, in the job posting. Instead of the usual bullshit about "based on experience" or "market value". Which is just weasel language to avoid having to give the employee any information with which to negotiate.
Also, not quite getting why executives should be immune to pay disclosure, if the ostensible reason is to let people know if they're being screwed. If your company is lying about policy so they can secretly give bonuses to the CEO to maintain the status quo of the exclusive executive clubhouse, that is screwing over the employees.
How are the employees screwed over? They aren't being paid less so the executives can be paid more. Most of the bonuses for executives are based on metrics that relate to financial information that wouldn't be disclosed to the employees. In many cases, executive salary is actually lower than what they made at a prior company to shift it into more desirable performance based pay. That is what the owners normally want, not a shrewd secret way to get paid more. How are the employees harmed if the CEO gets $250k base and a chance at a 100% bonus vs $500k base and no bonus?
Are you sure?
In a private company owned by institutional investors, these are totally decoupled. The people setting pay for the rank and file are totally seperate from the people setting executive pay.
I have literally never applied for a job that didn't require me to disclose my current salary. I didn't know not disclosing that was even a thing.
Either way, you can get around this by having the prospective employer just give the salary, or a range, in the job posting. Instead of the usual bullshit about "based on experience" or "market value". Which is just weasel language to avoid having to give the employee any information with which to negotiate.
Also, not quite getting why executives should be immune to pay disclosure, if the ostensible reason is to let people know if they're being screwed. If your company is lying about policy so they can secretly give bonuses to the CEO to maintain the status quo of the exclusive executive clubhouse, that is screwing over the employees.
How are the employees screwed over? They aren't being paid less so the executives can be paid more. Most of the bonuses for executives are based on metrics that relate to financial information that wouldn't be disclosed to the employees. In many cases, executive salary is actually lower than what they made at a prior company to shift it into more desirable performance based pay. That is what the owners normally want, not a shrewd secret way to get paid more. How are the employees harmed if the CEO gets $250k base and a chance at a 100% bonus vs $500k base and no bonus?
Are you sure?
In a private company owned by institutional investors, these are totally decoupled. The people setting pay for the rank and file are totally seperate from the people setting executive pay.
But before the decoupling they get it from a single source, right? Someone has to figure out x goes to employees and y goes to the management.
I have literally never applied for a job that didn't require me to disclose my current salary. I didn't know not disclosing that was even a thing.
Either way, you can get around this by having the prospective employer just give the salary, or a range, in the job posting. Instead of the usual bullshit about "based on experience" or "market value". Which is just weasel language to avoid having to give the employee any information with which to negotiate.
Also, not quite getting why executives should be immune to pay disclosure, if the ostensible reason is to let people know if they're being screwed. If your company is lying about policy so they can secretly give bonuses to the CEO to maintain the status quo of the exclusive executive clubhouse, that is screwing over the employees.
How are the employees screwed over? They aren't being paid less so the executives can be paid more. Most of the bonuses for executives are based on metrics that relate to financial information that wouldn't be disclosed to the employees. In many cases, executive salary is actually lower than what they made at a prior company to shift it into more desirable performance based pay. That is what the owners normally want, not a shrewd secret way to get paid more. How are the employees harmed if the CEO gets $250k base and a chance at a 100% bonus vs $500k base and no bonus?
Right, and those financial metrics are things like "profitability". If I can drive my costs down by paying my employees less, then my profit goes up, and the executives get a bigger payout. It is literally transferring earnings from your employees to the executives.
No executive is going to take a lower total compensation package when going to a new company. Salary may be lower, but total compensation will be higher.
I have literally never applied for a job that didn't require me to disclose my current salary. I didn't know not disclosing that was even a thing.
Either way, you can get around this by having the prospective employer just give the salary, or a range, in the job posting. Instead of the usual bullshit about "based on experience" or "market value". Which is just weasel language to avoid having to give the employee any information with which to negotiate.
Also, not quite getting why executives should be immune to pay disclosure, if the ostensible reason is to let people know if they're being screwed. If your company is lying about policy so they can secretly give bonuses to the CEO to maintain the status quo of the exclusive executive clubhouse, that is screwing over the employees.
How are the employees screwed over? They aren't being paid less so the executives can be paid more. Most of the bonuses for executives are based on metrics that relate to financial information that wouldn't be disclosed to the employees. In many cases, executive salary is actually lower than what they made at a prior company to shift it into more desirable performance based pay. That is what the owners normally want, not a shrewd secret way to get paid more. How are the employees harmed if the CEO gets $250k base and a chance at a 100% bonus vs $500k base and no bonus?
All other things being equal, the employees are necessarily paid less so the executives can be paid more. This isn't a 'rising tide lifts all boats', there's a limited amount of money that can be paid out - it's got to come from somewhere. That doesn't mean the executive bonus MUST come from employee payroll, but one way or another (reduction in headcount, slashed benefits, lack of investment into employee development, etc) it almost always does. It's not the investors who are shouldering the burden.
As you've already stated, executives are in a strong position to negotiate. All other things being equal, no CEO is going to agree to the $250k + a chance at 100% bonus when they instead can just get $500k base w/o a bonus. It's just stupid to do so - in the best case, you end up in the same position.
Overall though, I really don't care how an executive receives their compensation. What I do care about is a business stating that they have policy A, then secretly violating that policy for the sole betterment of the executives. It may be good business, but it's still a shitty way of doing things.
I have literally never applied for a job that didn't require me to disclose my current salary. I didn't know not disclosing that was even a thing.
Either way, you can get around this by having the prospective employer just give the salary, or a range, in the job posting. Instead of the usual bullshit about "based on experience" or "market value". Which is just weasel language to avoid having to give the employee any information with which to negotiate.
Also, not quite getting why executives should be immune to pay disclosure, if the ostensible reason is to let people know if they're being screwed. If your company is lying about policy so they can secretly give bonuses to the CEO to maintain the status quo of the exclusive executive clubhouse, that is screwing over the employees.
How are the employees screwed over? They aren't being paid less so the executives can be paid more. Most of the bonuses for executives are based on metrics that relate to financial information that wouldn't be disclosed to the employees. In many cases, executive salary is actually lower than what they made at a prior company to shift it into more desirable performance based pay. That is what the owners normally want, not a shrewd secret way to get paid more. How are the employees harmed if the CEO gets $250k base and a chance at a 100% bonus vs $500k base and no bonus?
Are you sure?
In a private company owned by institutional investors, these are totally decoupled. The people setting pay for the rank and file are totally seperate from the people setting executive pay.
Yeah, pretty sure the executives have their compensation set by shareholders, but there's very little chance that the compensation package would be declined. So, literally the people receiving dividends from the company's profits are voting on whether or not to have management eat up more of their "share".
I have literally never applied for a job that didn't require me to disclose my current salary. I didn't know not disclosing that was even a thing.
Either way, you can get around this by having the prospective employer just give the salary, or a range, in the job posting. Instead of the usual bullshit about "based on experience" or "market value". Which is just weasel language to avoid having to give the employee any information with which to negotiate.
Also, not quite getting why executives should be immune to pay disclosure, if the ostensible reason is to let people know if they're being screwed. If your company is lying about policy so they can secretly give bonuses to the CEO to maintain the status quo of the exclusive executive clubhouse, that is screwing over the employees.
How are the employees screwed over? They aren't being paid less so the executives can be paid more. Most of the bonuses for executives are based on metrics that relate to financial information that wouldn't be disclosed to the employees. In many cases, executive salary is actually lower than what they made at a prior company to shift it into more desirable performance based pay. That is what the owners normally want, not a shrewd secret way to get paid more. How are the employees harmed if the CEO gets $250k base and a chance at a 100% bonus vs $500k base and no bonus?
Right, and those financial metrics are things like "profitability". If I can drive my costs down by paying my employees less, then my profit goes up, and the executives get a bigger payout. It is literally transferring earnings from your employees to the executives.
No executive is going to take a lower total compensation package when going to a new company. Salary may be lower, but total compensation will be higher.
Yes but shareholders also get some of those profits which is the whole point. It's not just the CEO who's getting transferred that money, but also they shareholders which is why they approved of that payment system in the first place.
Employees are probably getting screwed over, but nothing mentioned in this thread is really going to prevent that.
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CambiataCommander ShepardThe likes of which even GAWD has never seenRegistered Userregular
I have literally never applied for a job that didn't require me to disclose my current salary. I didn't know not disclosing that was even a thing.
Either way, you can get around this by having the prospective employer just give the salary, or a range, in the job posting. Instead of the usual bullshit about "based on experience" or "market value". Which is just weasel language to avoid having to give the employee any information with which to negotiate.
Also, not quite getting why executives should be immune to pay disclosure, if the ostensible reason is to let people know if they're being screwed. If your company is lying about policy so they can secretly give bonuses to the CEO to maintain the status quo of the exclusive executive clubhouse, that is screwing over the employees.
How are the employees screwed over? They aren't being paid less so the executives can be paid more. Most of the bonuses for executives are based on metrics that relate to financial information that wouldn't be disclosed to the employees. In many cases, executive salary is actually lower than what they made at a prior company to shift it into more desirable performance based pay. That is what the owners normally want, not a shrewd secret way to get paid more. How are the employees harmed if the CEO gets $250k base and a chance at a 100% bonus vs $500k base and no bonus?
Right, and those financial metrics are things like "profitability". If I can drive my costs down by paying my employees less, then my profit goes up, and the executives get a bigger payout. It is literally transferring earnings from your employees to the executives.
No executive is going to take a lower total compensation package when going to a new company. Salary may be lower, but total compensation will be higher.
Yes but shareholders also get some of those profits which is the whole point. It's not just the CEO who's getting transferred that money, but also they shareholders which is why they approved of that payment system in the first place.
Employees are probably getting screwed over, but nothing mentioned in this thread is really going to prevent that.
If certain people really weren't afraid of employees gaining power from knowing how much executives are paid, then they wouldn't be arguing that it was somehow harmful to executives.
"If you divide the whole world into just enemies and friends, you'll end up destroying everything" --Nausicaa of the Valley of Wind
I have literally never applied for a job that didn't require me to disclose my current salary. I didn't know not disclosing that was even a thing.
Either way, you can get around this by having the prospective employer just give the salary, or a range, in the job posting. Instead of the usual bullshit about "based on experience" or "market value". Which is just weasel language to avoid having to give the employee any information with which to negotiate.
Also, not quite getting why executives should be immune to pay disclosure, if the ostensible reason is to let people know if they're being screwed. If your company is lying about policy so they can secretly give bonuses to the CEO to maintain the status quo of the exclusive executive clubhouse, that is screwing over the employees.
How are the employees screwed over? They aren't being paid less so the executives can be paid more. Most of the bonuses for executives are based on metrics that relate to financial information that wouldn't be disclosed to the employees. In many cases, executive salary is actually lower than what they made at a prior company to shift it into more desirable performance based pay. That is what the owners normally want, not a shrewd secret way to get paid more. How are the employees harmed if the CEO gets $250k base and a chance at a 100% bonus vs $500k base and no bonus?
Right, and those financial metrics are things like "profitability". If I can drive my costs down by paying my employees less, then my profit goes up, and the executives get a bigger payout. It is literally transferring earnings from your employees to the executives.
No executive is going to take a lower total compensation package when going to a new company. Salary may be lower, but total compensation will be higher.
Yes but shareholders also get some of those profits which is the whole point. It's not just the CEO who's getting transferred that money, but also they shareholders which is why they approved of that payment system in the first place.
Employees are probably getting screwed over, but nothing mentioned in this thread is really going to prevent that.
Maybe, maybe not. With information like that in the daylight it's going to be easier for it to become a political issue, then things start getting interesting.
It's most important for people to have the most immediately relevant information to them (current and likely future positions), but as a5ehren notes, there's a negotiation advantage in being able to call bullshit on especially large bonuses while salaries are frozen. And, as I like to point out as an economist, any year you don't receive a (nominal) pay increase, you received a (real) pay cut, due to inflation.
Again, the most important thing is transparency for one's own positions, but OTOH, people do need to know what C level compensation looks like, because it's a substantial issue. Executive level pay is responsible for a substantial portion of currently dangerous levels of inequality in America, and there's decent evidence to suggest it isn't actually justifiable by even the loosest definition of merit (industry wide trends are often the largest mover of individual firm success, and executive compensation doesn't track well to the portion of their firm's failure or success that cannot be accounted for by industry movement).
Honestly, even competent execs still get an absurdly good deal. One COO I know, TLDR, just got a free million when their business was acquired, and it wasn't even a negotiation sticking point, the go between just threw it in there. Not a lot of non-c level positions get a cool million because "why not?" In that case it actually made sense, because he stuck around and they outperformed their industry for a decade or so, but it's still ridiculous.
The market for executives is small. The main criteria for being hired as an executive is generally having run a successful company. There are never that many people who are looking for a job and who have run a comparable business (by size) at any given time, and so high pay is often necessary to get someone. That said, in private companies the base comp is generally not that high (>$500k) and most of the comp comes from equity awards or success bonuses on a sale of the company, because they both incentivize working towards an exit event (which is what many private owners want).
I see no reason why their salary being public prevents them from being payed that much.
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spacekungfumanPoor and minority-filledRegistered User, __BANNED USERSregular
I have literally never applied for a job that didn't require me to disclose my current salary. I didn't know not disclosing that was even a thing.
Either way, you can get around this by having the prospective employer just give the salary, or a range, in the job posting. Instead of the usual bullshit about "based on experience" or "market value". Which is just weasel language to avoid having to give the employee any information with which to negotiate.
Also, not quite getting why executives should be immune to pay disclosure, if the ostensible reason is to let people know if they're being screwed. If your company is lying about policy so they can secretly give bonuses to the CEO to maintain the status quo of the exclusive executive clubhouse, that is screwing over the employees.
How are the employees screwed over? They aren't being paid less so the executives can be paid more. Most of the bonuses for executives are based on metrics that relate to financial information that wouldn't be disclosed to the employees. In many cases, executive salary is actually lower than what they made at a prior company to shift it into more desirable performance based pay. That is what the owners normally want, not a shrewd secret way to get paid more. How are the employees harmed if the CEO gets $250k base and a chance at a 100% bonus vs $500k base and no bonus?
All other things being equal, the employees are necessarily paid less so the executives can be paid more. This isn't a 'rising tide lifts all boats', there's a limited amount of money that can be paid out - it's got to come from somewhere. That doesn't mean the executive bonus MUST come from employee payroll, but one way or another (reduction in headcount, slashed benefits, lack of investment into employee development, etc) it almost always does. It's not the investors who are shouldering the burden.
As you've already stated, executives are in a strong position to negotiate. All other things being equal, no CEO is going to agree to the $250k + a chance at 100% bonus when they instead can just get $500k base w/o a bonus. It's just stupid to do so - in the best case, you end up in the same position.
Overall though, I really don't care how an executive receives their compensation. What I do care about is a business stating that they have policy A, then secretly violating that policy for the sole betterment of the executives. It may be good business, but it's still a shitty way of doing things.
The problem with this argument is that it assumes employee costs are eating up most of the revenue of the business. That is not the case in a successful business (particularly since compensation is tax deductible, and so is actually a relatively cheap way to allocate money). Also, fixed costs are often excluded from the metrics (they want growth to be organic, not a way to just terminate people). "Profitability" is not common at all as a metric.
I have literally never applied for a job that didn't require me to disclose my current salary. I didn't know not disclosing that was even a thing.
Either way, you can get around this by having the prospective employer just give the salary, or a range, in the job posting. Instead of the usual bullshit about "based on experience" or "market value". Which is just weasel language to avoid having to give the employee any information with which to negotiate.
Also, not quite getting why executives should be immune to pay disclosure, if the ostensible reason is to let people know if they're being screwed. If your company is lying about policy so they can secretly give bonuses to the CEO to maintain the status quo of the exclusive executive clubhouse, that is screwing over the employees.
How are the employees screwed over? They aren't being paid less so the executives can be paid more. Most of the bonuses for executives are based on metrics that relate to financial information that wouldn't be disclosed to the employees. In many cases, executive salary is actually lower than what they made at a prior company to shift it into more desirable performance based pay. That is what the owners normally want, not a shrewd secret way to get paid more. How are the employees harmed if the CEO gets $250k base and a chance at a 100% bonus vs $500k base and no bonus?
Right, and those financial metrics are things like "profitability". If I can drive my costs down by paying my employees less, then my profit goes up, and the executives get a bigger payout. It is literally transferring earnings from your employees to the executives.
No executive is going to take a lower total compensation package when going to a new company. Salary may be lower, but total compensation will be higher.
Yes but shareholders also get some of those profits which is the whole point. It's not just the CEO who's getting transferred that money, but also they shareholders which is why they approved of that payment system in the first place.
Employees are probably getting screwed over, but nothing mentioned in this thread is really going to prevent that.
Maybe, maybe not. With information like that in the daylight it's going to be easier for it to become a political issue, then things start getting interesting.
I honestly thought most of this information was already publicly available. But it looked like the bill linked at the top of this page just recently got passed. So I guess we'll see how things change once this becomes mandatory for all firms.
The market for executives is small. The main criteria for being hired as an executive is generally having run a successful company
This is such a load of garbage. I mean, where do we start?
I know: let's start with Donald Rumsfeld. I've become less and less surprised over the years looking up company histories to find that, yes, old Donnie was head of this one too at some point. The guy is as close to literally useless as a functional human being can be - look up his background, education & CV for yourself. No specialized expertise, no glowing recommendations (aside from his close friends), no history of glowing success (it's not a history full of apocalyptic failure like Bush Jr, but certainly nothing remarkable ever happened under Rumsfeld's 'vision' at any of the perhaps hundreds of companies he's bounced to and from).
There are some people that seem to have an acumen for keeping a ship afloat and even righting it after a subordinate has given it a list (I'd also note that it's very hard to find one of those people that isn't also an expert in their company's field: Jobs, Gates, Iwata, etc) - but the vast & overwhelming majority of executives are people who either grew-up in the Old Boy's Network, knew who to give a blowjob to to break into said network or are matchstick men who did that rare feat of finding the big score before their house of cards fell in. Where there are exceptions to either of the above rules (folks like Buffet, for example), it often comes in the form of an aberration in the system where people who are good at predicting & betting on market trends can become insanely rich despite such a skill set being laughably narrow & useless outside of the context of a specific market set-up.
The main function of executives is to not fuck everything up, for which they obviously deserve all of the money. The actual work is done by line employees
spacekungfumanPoor and minority-filledRegistered User, __BANNED USERSregular
Wow. First of all, most C level executives work at much smaller companies that are privately held, and they tend to either have founded their company or to have founded and run another company which has been sold. This idea of the lazy incompetent CEO does not match up with reality in my experience, and I have dealt with hundreds of CEOs for clients.
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Captain Marcusnow arrives the hour of actionRegistered Userregular
But C-level people don't make the money. The regular employees are the ones who are making and selling the products. I'm not a fan of Marx by any means, but he was right on the nose in saying that Labor actually creates the wealth.
What's your point? Are you saying that the millions of jobs where people aren't directly handling the actual product are worth less than those few jobs that are?
What's your point? Are you saying that the millions of jobs where people aren't directly handling the actual product are worth less than those few jobs that are?
Nowhere near what they're getting paid, but I guess that's why it's good to be king when you control the pay checks.
It varies by company and industry. The benefits CEOs get are absurd, but plenty of them are at least competent. Golden parachutes and the lack of consequence for failure are a huge problem, of course. There's a larger issue with manager vs. worker pay that includes the notion that the only way to get paid well is to be a manager rather than an incredibly skilled value-creator. It's basically the result of a hideously outdated view that the world needs to revolve around power hierarchies instead of cooperation.
Which is all the more reason that people who make a lot of money want to keep their income hidden - no king wants the peasants to know just how big the pile of gold he rolls around on is.
But C-level people don't make the money. The regular employees are the ones who are making and selling the products. I'm not a fan of Marx by any means, but he was right on the nose in saying that Labor actually creates the wealth.
This is not entirely true, nor does it apply to other sectors of the company that don't make the money either.
HR, for example, doesn't sell, market, develop, or promote the products, yet I doubt anyone here would say that they shouldn't be compensated for their work.
First of all, most C level executives work at much smaller companies that are privately held, and they tend to either have founded their company or to have founded and run another company which has been sold.
Note that I gave special consideration to people who founded their companies based on expertise they have, given that said persons probably do have something of tangible value to offer said company.
I contest your assertion that this represents anywhere near the majority of CEOs.
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ElJeffeNot actually a mod.Roaming the streets, waving his gun around.Moderator, ClubPAmod
I think my favorite thing about this thread so far is SKFM's worry that if we don't give extra bonuses to executives, then no one would want to be an executive and we'd lose this precious non-renewable resource.
Oh SKFM.
This is not an informative or helpful sentiment.
Please let's try not to make this thread about a particular person.
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syndalisGetting ClassyOn the WallRegistered User, Loves Apple Productsregular
But C-level people don't make the money. The regular employees are the ones who are making and selling the products. I'm not a fan of Marx by any means, but he was right on the nose in saying that Labor actually creates the wealth.
Labor is the raw output that generates wealth.
C-level folks are the conductors, making sure that the labor is capable of producing by lining up the resources, contracts, staff, and other elements needed to keep the machine running. In many cases it is their skills, networking and drive that make sure there is work to be done at all.
Saying that C-level people are parasites not generating capital for the company does not line up with my own experience on the topic and it further entrenches an us vs. them mentality.
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Let's play Mario Kart or something...
C-level folks are the conductors, making sure that the labor is capable of producing by lining up the resources, contracts, staff, and other elements needed to keep the machine running. In many cases it is their skills, networking and drive that make sure there is work to be done at all.
This does not take any actual skill. It's literally just knowing people & having a network.
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Space, the SEC is already requiring disclosure of the CEO's pay and pay gap. http://www.wsj.com/articles/sec-set-to-approve-final-ceo-pay-ratio-rule-1438783961
But that is only reporting companies. I am talking about private companies.
It's also a terrible rule that makes no sense.
This seems like a failure of your employer, not the idea of public salaries at all.
Executive pay is also VERY rarely significant enough to effect the investments of the shareholders. Pay increases across the board for workers could easily be though. I have seen clients pass on buying otherwise attractive companies because the cost of providing health insurance on a go forward basis to a population that did not previously receive benefits was prohibitive.
So I read through the rest of this thread and haven't really seen this adequately addressed. Giving future employers information about your current salary gives them a huge amount of leverage. I feel like publicly disclosing salaries would increase the negotiating powers of employers as well as that of employees. And I'm not really convinced that the employees would manage to come out on top. Unless we make other changes the power is still going to be in the hands of the employer the majority of times due to the oversupply of workers.
Either way, you can get around this by having the prospective employer just give the salary, or a range, in the job posting. Instead of the usual bullshit about "based on experience" or "market value". Which is just weasel language to avoid having to give the employee any information with which to negotiate.
Also, not quite getting why executives should be immune to pay disclosure, if the ostensible reason is to let people know if they're being screwed. If your company is lying about policy so they can secretly give bonuses to the CEO to maintain the status quo of the exclusive executive clubhouse, that is screwing over the employees.
Private companies are a bit different, but I would think that it would certainly be unethical for an executive to fail to disclose their compensation to stakeholders like equity partners or investors. In your example, you said that employees were compensated fairly because they had an equity stake, but the money an executive raids from the company indisputably hurts that equity and thus those employees.
You could just as easily make an argument that embezzlement is VERY rarely significant enough to effect the investments of the shareholders as well. In fact, I would go so far as to say that an executive who is taking an undisclosed bonus behind closed doors is damn close to embezzlement. The fact that it's technically legal still doesn't make it proper or ethical.
Again, back to the cheating thread a few weeks ago. If you think it's something that needs to be kept a secret, you probably shouldn't do it.
As for the fact that payroll frequently effects the investments...no kidding. Every expense, from employee pay / benefits to material costs to office space effects the investments. Arguing that it doesn't is like arguing that theft is ok as long as it's only a little bit, or that the victim isn't hurt if they don't know.
And usually, though there are rare exceptions, they are offered no less than the mean going rate. This has the natural effect of slowly but surely pushing the salaries every higher over time. Anytime someone takes a compensation package higher than the mean, the mean goes up, and that becomes the new normal for pay.
This has worked wonders for executives, why wouldn't it be beneficial for rank and file employees?
Its a failure of how our state system works, but also one that inevitably happens in a non growing budgetary environment. When budgets are slowly decreasing, no one can or will promote. If your organization is always growing, great! Promotions for everyone. Else, you will see job attrition. This is fairly common in many public sector economies.
I'd be fine with companies just reporting min/mean/max (maybe std dev) for each title in the company, along with a general outline of the experience/etc for each title.
Edit: To fit in with the thread, my gross salary is $80k/yr as a software engineer. My net take-home after taxes, insurance premiums, etc, is probably under $50k.
I should make a GDST about insurance premiums suppressing real salaries. My dad pays a lower annual premium as a retiree than my monthly rate, for similar (if not better) coverage.
And like I said, I suspect that I'm being underpaid, even within the company.
Oh SKFM.
I'd rather have min Q1 med Q3 max myself, but then you get a better sense of the data shape. I don't know how normal salary can be expected to be.
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How are the employees screwed over? They aren't being paid less so the executives can be paid more. Most of the bonuses for executives are based on metrics that relate to financial information that wouldn't be disclosed to the employees. In many cases, executive salary is actually lower than what they made at a prior company to shift it into more desirable performance based pay. That is what the owners normally want, not a shrewd secret way to get paid more. How are the employees harmed if the CEO gets $250k base and a chance at a 100% bonus vs $500k base and no bonus?
The employees and management have to share money from the same company profits, yes? Only so much to go around.
Are you sure?
In a private company owned by institutional investors, these are totally decoupled. The people setting pay for the rank and file are totally seperate from the people setting executive pay.
But before the decoupling they get it from a single source, right? Someone has to figure out x goes to employees and y goes to the management.
Right, and those financial metrics are things like "profitability". If I can drive my costs down by paying my employees less, then my profit goes up, and the executives get a bigger payout. It is literally transferring earnings from your employees to the executives.
No executive is going to take a lower total compensation package when going to a new company. Salary may be lower, but total compensation will be higher.
All other things being equal, the employees are necessarily paid less so the executives can be paid more. This isn't a 'rising tide lifts all boats', there's a limited amount of money that can be paid out - it's got to come from somewhere. That doesn't mean the executive bonus MUST come from employee payroll, but one way or another (reduction in headcount, slashed benefits, lack of investment into employee development, etc) it almost always does. It's not the investors who are shouldering the burden.
As you've already stated, executives are in a strong position to negotiate. All other things being equal, no CEO is going to agree to the $250k + a chance at 100% bonus when they instead can just get $500k base w/o a bonus. It's just stupid to do so - in the best case, you end up in the same position.
Overall though, I really don't care how an executive receives their compensation. What I do care about is a business stating that they have policy A, then secretly violating that policy for the sole betterment of the executives. It may be good business, but it's still a shitty way of doing things.
Yes but shareholders also get some of those profits which is the whole point. It's not just the CEO who's getting transferred that money, but also they shareholders which is why they approved of that payment system in the first place.
Employees are probably getting screwed over, but nothing mentioned in this thread is really going to prevent that.
If certain people really weren't afraid of employees gaining power from knowing how much executives are paid, then they wouldn't be arguing that it was somehow harmful to executives.
Maybe, maybe not. With information like that in the daylight it's going to be easier for it to become a political issue, then things start getting interesting.
I see no reason why their salary being public prevents them from being payed that much.
The problem with this argument is that it assumes employee costs are eating up most of the revenue of the business. That is not the case in a successful business (particularly since compensation is tax deductible, and so is actually a relatively cheap way to allocate money). Also, fixed costs are often excluded from the metrics (they want growth to be organic, not a way to just terminate people). "Profitability" is not common at all as a metric.
I honestly thought most of this information was already publicly available. But it looked like the bill linked at the top of this page just recently got passed. So I guess we'll see how things change once this becomes mandatory for all firms.
This is such a load of garbage. I mean, where do we start?
I know: let's start with Donald Rumsfeld. I've become less and less surprised over the years looking up company histories to find that, yes, old Donnie was head of this one too at some point. The guy is as close to literally useless as a functional human being can be - look up his background, education & CV for yourself. No specialized expertise, no glowing recommendations (aside from his close friends), no history of glowing success (it's not a history full of apocalyptic failure like Bush Jr, but certainly nothing remarkable ever happened under Rumsfeld's 'vision' at any of the perhaps hundreds of companies he's bounced to and from).
There are some people that seem to have an acumen for keeping a ship afloat and even righting it after a subordinate has given it a list (I'd also note that it's very hard to find one of those people that isn't also an expert in their company's field: Jobs, Gates, Iwata, etc) - but the vast & overwhelming majority of executives are people who either grew-up in the Old Boy's Network, knew who to give a blowjob to to break into said network or are matchstick men who did that rare feat of finding the big score before their house of cards fell in. Where there are exceptions to either of the above rules (folks like Buffet, for example), it often comes in the form of an aberration in the system where people who are good at predicting & betting on market trends can become insanely rich despite such a skill set being laughably narrow & useless outside of the context of a specific market set-up.
Nowhere near what they're getting paid, but I guess that's why it's good to be king when you control the pay checks.
Which is all the more reason that people who make a lot of money want to keep their income hidden - no king wants the peasants to know just how big the pile of gold he rolls around on is.
This is not entirely true, nor does it apply to other sectors of the company that don't make the money either.
HR, for example, doesn't sell, market, develop, or promote the products, yet I doubt anyone here would say that they shouldn't be compensated for their work.
Note that I gave special consideration to people who founded their companies based on expertise they have, given that said persons probably do have something of tangible value to offer said company.
I contest your assertion that this represents anywhere near the majority of CEOs.
This is not an informative or helpful sentiment.
Please let's try not to make this thread about a particular person.
Labor is the raw output that generates wealth.
C-level folks are the conductors, making sure that the labor is capable of producing by lining up the resources, contracts, staff, and other elements needed to keep the machine running. In many cases it is their skills, networking and drive that make sure there is work to be done at all.
Saying that C-level people are parasites not generating capital for the company does not line up with my own experience on the topic and it further entrenches an us vs. them mentality.
Let's play Mario Kart or something...
This does not take any actual skill. It's literally just knowing people & having a network.