The pay gap between the average employee and that of the CEO has always been large, but it has been widening significantly over the years.
Union group AFL-CIO recently published some statistics that show that in 1980 the average CEO made 42 times as much as their employees, a number that has grown to 380 times as much in 2011. And as we remember, 2011 was the year where the Dow Jones index ended up 5.5%, the S&P 500 finished flat, and the NASDAQ was down .3%, hardly an impressive performance.
To add to that, after a recent rejection by Citigroup shareholders over the compensation package for CEO Vikram Pandit and other company executives, a shareholder filed a lawsuit against Vik and the board of directors for awarding the executive management large pay packages.
I am sure that most of you are aware that most analyst/associate level employees from across finance have received such low compensation packages that they and other perspective students are starting to reconsider the long hours and grueling work that is required by the banks.
Do you think that the pay at the lower levels will improve soon? Perhaps the hours and lifestyle are worth it to try to make it to the executive management level where you are compensated well? Or are you reconsidering the industry all together?
There are a few things that I would like to know before making comments:
1) How many people from entry level make it to CEO level? 1 out of 100,000? 2) Who determine CEO compensation? Shareholders? I am assuming that compensation is determined through a company like Mercer who put together market research on how CEOs are being paid industry wide. 3) Would hiring the right CEO which probably make either 10MM more or save 10MM more for the company, at an increase of let's say 2MM in total compensation? Is there any studies being done on that front?
1) it depends on size of company obviously, but for most fortune 500 the average is probably in the 100k ballpark. 2) for large public companies the executive compensation is determined by the compensation committee which is housed within the board of directors. 3) not sure, but from what I understand the Citi issue is that the plaintiff does not feel that Citi performed to par with what the compensation was, (even though the Citi stock went from $4.90 on January 3rd 2011 to $26.31 on Dec 30 2011, so there has to be more intricacies to the suit). But also it is worth taking into account that Vik made $1 in 2009 and approximately $150,000 in 2010. So I do not see why the complaint. Maybe the Plaintiff is Evelyn Davis hah.
Performed to par? you mean that reverse stock split in March? so what is the stock really worth now? Vikles got $80m last year from the sale of his hf... he is ok, not worth 15m in salary for last year. i think this is the point of the shareholders.. not that the sale should impact his comp.
Lloyd Blankfein made $13MM last year. Tiger Woods made ~$100MM last year.
I'm tired of people giving CEOs shit for all the hard work they put into their careers and the responsibilities they have. If you're gonna wine about people who make more money than you do, at least wine about those who work less for more pay.
^^^ That was exactly the point that I wanted to make. Thank you.
Red or white?
^^ Woods is 1 in billion. Blankfein 1 in million. So you cant make that argument.
http://www.youtube.com/embed/jTmXHvGZiSY
hahaha u win with austin powers logic
lol at the video
Back in 1980, it was impractical to give CEOs high pay packages. The CEO would make $1 million per year, and 70% of every dollar beyond ~$500K would go to taxes, so that last $500K would only net him $150K.
Today, CEOs salaries are taxed at half that rate.
I think CEOs deserve more than they were paid in 1980 if they're indeed creating economic value rather than running their companies into the ground, but I also believe that the country's obsession with money is destroying us. Money doesn't make you happy. In fact, obsessing about money makes you especially unhappy. Defining yourself in terms of money makes you even unhappier.
We need a federal law that allows states to ban expensive personal vehicles from public roads for a few years. The problem is that they're unsafe and uninsurable for other drivers only carrying $25K of liability insurance.
Flaunting wealth makes the people around you unhappy, and it doesn't make you any happier.
Oh well, back to my rusty honda.
Just make sure you're up to date on your tetanus shots.
"Of course he's not happy. Nobody's happy in this town except for the losers. Look at me, I'm miserable... that's why I'm rich."
I hope IlliniProgrammer doesn't turn this into another "OWS is back" thread. T.T
The issue here isnt CEO pay on its own. Its about relativity. Unless company performance hasnt improved, why is a CEO entitled to more pay? We've got interns working 100hrs for free and CEOs earning more than ever. Something's not right.
My ex-employer slashed employee salaries by over 30% while management got themselves new company rides. Board said management was too crucial to not reward. A lot of us young & talented quit & the firm's been in red ever since. If exec pay is skyrocketing then I want a piece of that fucking pie.
I know a lot of you on WSO dont want to hear this but CEOs get money because they determnine their own packages. Fuck all that compensation committee shyt you read in your textbooks. CEOs rule the board rooms and where they dont, they are close buddies with those that do. Now think....who wouldnt see their pay blow up if it was up to them or their golfing buddy?
Issue 2: high packages for failed CEOs who destroyed shareholder value. http://www.nytimes.com/2011/10/01/business/lets-stop-rewarding-failed-c…
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