Are Bankers Paid Too Much? Are Technology CEOs? 712
DavidHumus writes with this excerpt from a New York Times article: "Big paydays on Wall Street often come under laserlike scrutiny, while Silicon Valley gets a pass on its own compensation excesses. Why the double standard? The typical director at a Standard & Poor's 500 company was paid $251,000 in 2012, according to Bloomberg News. Mr. Schmidt [Google's CEO] is above that range by over $100 million. ...The latest was the criticism of Jamie Dimon's pay for 2013, given the many regulatory travails of his bank, JPMorgan Chase. The bank's board awarded Mr. Dimon $20 million in pay for 2013, $18.5 million of which was in restricted stock that vests over three years. ...For one, the outsize pay for Mr. Schmidt doesn't square with Google's performance. Putting aside the fact that he is not even the chief executive, Google had net income of $12.9 billion last year. JPMorgan was higher at $17.9 billion...."
DavidHumus notes "Maybe the bigger question is why is CEO pay so entirely disconnected from company performance?"
tl;dr (Score:5, Informative)
Yes
Is that a rhetorical question? (Score:1, Informative)
Re:tl;dr (Score:5, Informative)
I find having a bank account very handy for handling my money. Banks do contribute to society.
Bear in mind that investment banks and savings banks used to have huge firewalls between them, so that the one you find useful wasn't the one taking huge risks (it is, or was, also the smaller banks that typically extend credit to local businesses, not the huge investment banks)
Re:They are all paid too much (Score:5, Informative)
It would distort the free market and no one would take the risk or the very hard work like 70 hour work weeks, MBAs, and other things for dozens of years without the compensation.
Huh? People do work very hard for 70 hours a week without making 20 million dollars for it. It happens all the time. Sometimes because they have to, and sometimes because they enjoy their jobs. And getting MBAs? Do people actually need to get MBAs?
If someone is paid too much the market takes care of that with something called a firing.
Are you sure about that?
the shareholders need a return and who is the shareholder? Your elderly mom, YOU, etc.
Except often they're not, at least not to a meaningful degree. Your elderly mom probably has a 401k that gives her a 0.001% share in the company without knowing it. Mostly "the shareholders" are rich people.
The sky is the limit and the CEO didn't start out like this overnight. It was not luck. Even company founders are poor. It took Zuckerberg 10 years before he became very wealthy.
You're conflating some different issues here. The sky is the theoretical limit, in abstract, but not really so much for everyone. Zuckerberg did not start off poor. He started out upper-middle class. And he was lucky. He found himself with a good idea at the right place and at the right time and with the right help. Any number of things could have gone against him, resulting in Facebook never becoming the company that it is today.
So while it wouldn't be fair to claim that Zuckerberg sat around doing nothing and just happened across success, like finding the winning lottery ticket, it's also not fair to everyone else to paint the picture as though Zuckerberg created his own success through pure brilliance and hard work. He made smart decisions and worked hard, but others made equally smart decisions and worked equally hard without ever making a million dollars.
Re:tl;dr (Score:3, Informative)
Why don't they bitch about the high salaries professional athletes bring down? Famous rock stars? Movie stars?
My thing is, why do we complain at all about who makes how much?
I mean, it isn't really a zero sum game. A CEO or basketball star making millions of dollars a year, doesn't take money out of someone doing another job that make significantly less.
The salary of the vice president at McD's isn't taking money meant for the burger flippers pocket....
Re:tl;dr (Score:4, Informative)
The salary of the vice president at McD's isn't taking money meant for the burger flippers pocket....
Um, yes... yes, he is. That's exactly the point.