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The Pay's the Thing

CEOs make too much money... is an eternal complaint, regardless of what industry, market, company, country or time period that statement might bring to mind. So, it might come as a surprise that the SEC is finally trying to do something about it.

Earlier this month, the Securities and Exchange Commission (SEC) approved a CEO pay ratio rule calling for public companies to disclose the ratio of their CEOs' pay relative to the median employee pay in their companies.

We'll leave you to the NYT story linked above as you consider whether this could actually lead to great fairness in CEO pay or is more of a well-meaning but toothless measure. In any case, the new rule makes it good timing to take a look at the most highly compensated CEOs across the Light Reading vendor community.

To read the Prime Reading feature, see Vendor CEO Comp: Cashing In, Cashing Out.

Did these vendors get what they paid for? The first one on the list, maybe not so much. But, while we're asking questions, did your employer get a fair return on what it paid you last year? No, really...

— Dan O'Shea, Managing Editor, Light Reading

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Joe Stanganelli 8/24/2015 | 4:38:22 PM
But then what? It's worth mentioning that it's not like employee pay would necessarily automatically go up if CEO compensation was cut.  More than likely, that money would go to the shareholders.
MikeP688 8/31/2015 | 5:01:55 AM
Re: But then what? Why can't there be some reasonable sense of rationality, though?   Isn't that the key driving force--if the CEO can deliver, sure that CEO has to be rewarded.  But there needs to be some reason behind it.    
Joe Stanganelli 8/31/2015 | 11:07:05 PM
Re: But then what? Economic demand is reason enough.  Demand for top executives is sufficiently high (whether right or wrong) that compensation packages have risen dramatically to keep competitive.
MikeP688 9/1/2015 | 11:53:37 AM
Re: But then what? Happy First day of September @Joe.  But Economics also teaches rationality, right?  When things become irrational, then we have a bigger challenge.   How much is enough?   
Ariella 9/1/2015 | 12:50:15 PM
Re: But then what? @Mike I'm not sure I'd say that economics teaches rationality. It rather assumes rational behavior with its own definition of what that would be. However, as people like Dan Ariely who apply economic principles to actual behavior point our, people do often tend to irrational behavior. As he explains in https://hbr.org/2009/07/the-end-of-rational-economics

Drawing on aspects of both psychology and economics, the operating assumption of behavioral economics is that cognitive biases often prevent people from making rational decisions, despite their best efforts. (If humans were comic book characters, we'd be more closely related to Homer Simpson than to Superman.) Behavioral economics eschews the broad tenets of standard economics, long taught as guiding principles in business schools, and examines the real decisions people make—how much to spend on a cup of coffee, whether or not to save for retirement, deciding whether to cheat and by how much, whether to make healthy choices in diet or sex, and so on. 
MikeP688 9/1/2015 | 12:57:56 PM
Re: But then what? @Ariella:  I am well aware of the reality and the irrationality amongst us today is evidence of it.   However, that should not preclude us from embracing a true sense of purpose and a realistic assessment--which also includes what we here deliberate on a daily basis.   How much more digitized do we want to be?   How much is enough?   I was thinking about this as reports from the FAA noted increased sightings by drones.....will sanity truly prevail or not?   
Ariella 9/1/2015 | 1:09:55 PM
Re: But then what? Does sanity usually prevail? I'm rather cynical about the answer. 
MikeP688 9/1/2015 | 2:02:35 PM
Re: But then what? We must never be cynical.  We have to truly have an open mind--that's key.  It is not easy especially as Economics is known as the "Dismal Science".    
Ariella 9/1/2015 | 2:06:57 PM
Re: But then what? Dismal, indeed, @Mike, especially in light of the stock market tumble of late. Crashes are nothing new, of course. It occurred to me that there would a lot more stability if there were no selling short, but that bit of financial fiction has been around for over a century.
MikeP688 9/1/2015 | 2:10:51 PM
Re: But then what? I remember a long time ago Robert Reich equate the stock market to a Las Vegas Roulette Table.    Today proved it ever so.    The good thing about tech is that there is always an eye towards the long-term.   Google has taught us that--hasn't it? 
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