Top US CEO pay rose 7.7% last year, outpacing inflation, study finds(reuters.com)
reuters.com
Top US CEO pay rose 7.7% last year, outpacing inflation, study finds
https://www.reuters.com/business/top-us-ceo-pay-rose-77-last-year-outpacing-inflation-study-finds-2023-05-03/
60 comments
The average CEO doesn’t even earn close to $1 million annually. According to the Bureau of Labor Statistics, the median CEO pay is $189,520 [1], less than most FAANG software engineers.
What you’re looking at here are CEOs of the top 500 companies..of course they’ll earn much more than the average.
I don’t see anyone complaining that Beyoncé gets millions of dollars per performance while the average musician earns pittance. It’s the same here. It’s news orgs chasing clickbait to make money from the naive and perpetually outraged.
1- https://www.bls.gov/oes/current/oes111011.htm
What you’re looking at here are CEOs of the top 500 companies..of course they’ll earn much more than the average.
I don’t see anyone complaining that Beyoncé gets millions of dollars per performance while the average musician earns pittance. It’s the same here. It’s news orgs chasing clickbait to make money from the naive and perpetually outraged.
1- https://www.bls.gov/oes/current/oes111011.htm
> I don’t see anyone complaining that Beyoncé gets millions of dollars per performance while the average musician earns pittance.
It would be a legitimate position to take. The system sustaining Beyoncé revenue is approximately the same one which is used to justify star CEO revenues.
The interesting question isn’t is it expected that top CEO will earn more than average CEO anyway. It’s why has the gap between the salary of top CEO and their average worker grew so much in the past 50 years. It’s a legitimate question to ask.
It would be a legitimate position to take. The system sustaining Beyoncé revenue is approximately the same one which is used to justify star CEO revenues.
The interesting question isn’t is it expected that top CEO will earn more than average CEO anyway. It’s why has the gap between the salary of top CEO and their average worker grew so much in the past 50 years. It’s a legitimate question to ask.
> It would be a legitimate position to take. The system sustaining Beyoncé revenue is approximately the same one which is used to justify star CEO revenues.
Ah yes. The "system" of buyers (music consumers, corporate boards) choosing to buy or not to buy things at the prices the sellers are willing to sell them at. What is your remedy for this?
Ah yes. The "system" of buyers (music consumers, corporate boards) choosing to buy or not to buy things at the prices the sellers are willing to sell them at. What is your remedy for this?
There is no need for quote here. The entertainment industry works on heavy marketing and over promotion of a few champions at the expense of every other artists. That’s indeed a system. The market is both about what is bought and what is sold.
I personally feel perfectly fine with strongly curbing the free market with legislations. It’s not the be all end all nor is it working particularly well.
Mass media geared towards easy entertainment successfully erased decades of effort into educating the workers and creating structures to give them a voice. I personally view the entertainment industry as fully complicit in a general dumbing down of the population. Should we applaud the opium peddlers in the name of the free market?
I personally feel perfectly fine with strongly curbing the free market with legislations. It’s not the be all end all nor is it working particularly well.
Mass media geared towards easy entertainment successfully erased decades of effort into educating the workers and creating structures to give them a voice. I personally view the entertainment industry as fully complicit in a general dumbing down of the population. Should we applaud the opium peddlers in the name of the free market?
In Germany, the concept called co-determination puts the labor union representative on the board.
I just wish discussion here in the states had inspiration from concepts that work, instead of these false dilemmas we have to pretend to choose between. Well, the saddest part is that you all aren’t pretending, you don’t know other options aren’t being presented.
I just wish discussion here in the states had inspiration from concepts that work, instead of these false dilemmas we have to pretend to choose between. Well, the saddest part is that you all aren’t pretending, you don’t know other options aren’t being presented.
These types of stories lead to comments such as yours which draw a false vision of how things are. According to BLS data there are approximately 200,000 people in the US who hold the position of CEO. Their average compensation is ~4x the average worker.
> Probably because a lot of people here are CEOs (or hope to become one)
I earn a bit above median and have no aspirations even for a lower management position.
I see this stuff and to me it seems like either jealousy or white-knighting. A lot of people protesting these CEO pays seem to want to see the rich make less much more so than they actually want the lower class to make more. And the "it will not end well for the rich" polemic just confirms that assumption to me.
I earn a bit above median and have no aspirations even for a lower management position.
I see this stuff and to me it seems like either jealousy or white-knighting. A lot of people protesting these CEO pays seem to want to see the rich make less much more so than they actually want the lower class to make more. And the "it will not end well for the rich" polemic just confirms that assumption to me.
"seem to want to see the rich make less much more so than they actually want the lower class to make more"
and you are saying that would be a bad thing? Seems hard to say that would't make for a better society.
and you are saying that would be a bad thing? Seems hard to say that would't make for a better society.
Wanting other people to not have things is the definition of jealousy. A spiteful society? No thanks.
There are many people out there with the fixed pie fallacy who think thay if someone earns more money, it leads to others earning less money. This is how people think that kneecapping "the rich" will make the world a better place, and it can lead people to prioritize ensuring others do not become rich over ensuring that people grow the economy and make everyone better off. There are many people out there who lump producers, builders, and growers in with thieves and robbers because of this fallacy. If I grab dirt from the ground and a tomato seed from a discarded tomato and sell $5 worth of tomatoes I grow, they will think that I "stole" the $5. This does not make them bad people imo, I know many good people who have integrity and who I love who had this fallacy until I pointed it out to them.
> This is the only social media site where it seems like the majority of people actually think CEOs deserve their inflated salaries.
I never got that impression, but articles i read could differ from those you read here, of course, giving different impressions.
I never got that impression, but articles i read could differ from those you read here, of course, giving different impressions.
'Top CEO', not 'Average CEO'. How much does LeBron James make in salary/endorsements/etc vs the average NBA player or Ronaldo vs the average professional soccer player?
How much should CEOs be paid?
They should get what they fucking deserve jk of course
CEO compensation is determined by board of directors, which are largely comprised of other CEOs, who are usually nominated by the CEO and rubber stamped. It's very incestuous. Corporate governance is a joke.
The biggest problem is that corporate ownership is both divided among many stockholders and also fleeting, with stock constantly changing hands. This allows the executives to dominate control of publicly owned corporations.
The biggest problem is that corporate ownership is both divided among many stockholders and also fleeting, with stock constantly changing hands. This allows the executives to dominate control of publicly owned corporations.
I'd hope at the very minimum our leaders are insulated against inflation. Maybe other more important jobs in the sector should also be insulated against it, but what can you do?
Must be nice to be paid to do little.
Most the CEOs I’ve met work every day of the week and often till 8-11pm. It’s non stop work with little to no time for family. There’s a reason CEOs often have “broken” households and other health challenges.
Which for any CEO that's in a corporation (the only ones that would fall into the "top CEOs" list) their work is entirely public or private meetings, phone calls, golf outings, or lunches with clients.
And they can decide when and how long to take a break, and what to delegate to which underling, because there's no one above them. Let's not pretend it's the same type of work here.
I could probably work 8am to 11pm every day if that was all I was doing.
And they can decide when and how long to take a break, and what to delegate to which underling, because there's no one above them. Let's not pretend it's the same type of work here.
I could probably work 8am to 11pm every day if that was all I was doing.
Counterpoint, quite a few CEOs hold that title at multiple companies. If the job was so hard and required so much work then they wouldn't be able to swing this.
Many people have to do the same or more just to survive, not because they freely choose to do so. How many single parents can spend almost no time with their family because they have multiple jobs? The CEO can always step down, the single parent has no choice.
But won't you think about the poor CEO! They must cry themselves to sleep every night on their huge piles of cash
It's not that they do little, it's just that they don't deserve this when the people under them effectively foot the bill in lack of pay raises.
why should a CEO get a bonus if they just fired people?
Probably because they could potentially be saving the company money.
I will probably get downvoted for this but companies don't care about people. They might make it seem like they care but they don't. If a company decides they can perform same or better by improving efficiency and cutting 10% of jobs that is a huge WIN for the business. CEOs are not there to make friends and be kind. Their job is to plan for the future of the company, not Bob slinging code in the back.
I will probably get downvoted for this but companies don't care about people. They might make it seem like they care but they don't. If a company decides they can perform same or better by improving efficiency and cutting 10% of jobs that is a huge WIN for the business. CEOs are not there to make friends and be kind. Their job is to plan for the future of the company, not Bob slinging code in the back.
but didn't they steer the ship int he wrong direction in the first place? And if your the size of Amazon aren't you able to find things for them to do? Wouldn't more training help? I'm not talking about let someone go for cause.
Retraining takes time and money. People are not always easy to retrain. People will be unhappy about any pay cuts. Sometimes it is best to let them go.
CEO often cannot predict exactly what the economy will do and what the clients will do. Their decisions can be based on data but it doesn't mean they can predict the future.
To be frank, I am not saying this is right or wrong. This is reality of business.
CEO often cannot predict exactly what the economy will do and what the clients will do. Their decisions can be based on data but it doesn't mean they can predict the future.
To be frank, I am not saying this is right or wrong. This is reality of business.
CEOs should get a bonus because they fired people when it was necessary. Otherwise a CEO would make the easy choice and not fire anyone and you end up with a corporate culture like Japan, where people are rarely ever fired and there are hoards of people glued to a job doing unproductive work.
Firing people is a way to avoid a company's workforce from stagnating. It lets unproductive people in one environment find a new environment where they can meaningfully contribute. One should never avoid firing someone, instead what's important is ensuring that when someone gets fired that they aren't left destitute or desperate and that there's a path available to them to find new gainful employment.
Firing people is a way to avoid a company's workforce from stagnating. It lets unproductive people in one environment find a new environment where they can meaningfully contribute. One should never avoid firing someone, instead what's important is ensuring that when someone gets fired that they aren't left destitute or desperate and that there's a path available to them to find new gainful employment.
Actually CEOs or VPs get something called golden parachute when they leave a company. That is usually a lot of money.
Not defending CEOs but I think a lot of folks misinterpret that CEOs are 'done' after an 8/10 hour shift, when in reality they're on the clock their entire lives.
I would argue so are doctors but they don't get CEO pay, so there ya go.
I would argue so are doctors but they don't get CEO pay, so there ya go.
Thinking CEOs do little is rather naive. On average they work same number of hours but the amount of stress they’re under is much higher than average.
than like a firefighter or a cop or a soldier?
Most people aren't saying that CEOs don't deserve more pay than the average worker but the rich continuing to get richer hasn't ever really worked out for the rich in the long run.
The bottom line is how much wealth/income inequality does a society want to accept. You have 2 paths ignore it and it will get more extreme or try to steer the ship towards a more equitable society. not a completely equitable society because that's impossible and people don't seem to work that well under that system, but there should be a goal in the middle somewhere.
Most people aren't saying that CEOs don't deserve more pay than the average worker but the rich continuing to get richer hasn't ever really worked out for the rich in the long run.
The bottom line is how much wealth/income inequality does a society want to accept. You have 2 paths ignore it and it will get more extreme or try to steer the ship towards a more equitable society. not a completely equitable society because that's impossible and people don't seem to work that well under that system, but there should be a goal in the middle somewhere.
you are arguing so many things i didnt bring up
No, they're making a counterpoint to your comment about amount of time worked and stress levels. You can't just say "oh I don't like that argument, everything I didn't mention therefore has nothing to do with this"
You should also be aware the number of hours worked has nothing to do with actual output or value
You should also be aware the number of hours worked has nothing to do with actual output or value
Nah, this just reads like raging redditor stuff actually. Honestly, go back to Reddit. I thought this was an entrepreneurial site? The people here are distinctly familiar with how insane the workload and stress levels are for starting and running successful companies. You know, the reality of it.
People can also be familiar with the insane work load of trying to support a family on three part time jobs as a single parent that don't provide insurance
yea those jobs require negative competence compared to being a CEO
So being a CEO requires someone to be 7000 times as competent? I highly doubt that
Do you honestly think that someone working a minimum wage job doesn't deserve to be able to afford to live just by working one? Do you think that if someone isn't as competent as you would like them to be, they should just die? If you genuinely believe that, you should be ashamed of yourself
Worker's pay needs to come up or CEO pay needs to go way down. Preferably both
Do you honestly think that someone working a minimum wage job doesn't deserve to be able to afford to live just by working one? Do you think that if someone isn't as competent as you would like them to be, they should just die? If you genuinely believe that, you should be ashamed of yourself
Worker's pay needs to come up or CEO pay needs to go way down. Preferably both
As opposed to whom? Which same hours are you suggesting they work? I'm a little confused by your comment here.
I'm hoping you read the first result, which was AI generated.
https://hbr.org/2018/07/how-ceos-manage-time
62.5 hours a week average is what's being toted in this article.
https://hbr.org/2018/07/how-ceos-manage-time
62.5 hours a week average is what's being toted in this article.
It may outpace the official inflation rate. But I do not trust those numbers. Maybe the CEOs have a better knowledge of it, and the 7.7% are nearer to the true value?
I'm sure that's right. If there's one thing US CEOs are focused on, it's making certain their pay increases track the inflation rate precisely.
"100 highest paid CEOs" means this is a flawed study.
It's not the same CEOs year to year, it's just the highest paid, and since CEO pay is mostly equity, it's probably the CEOs of the top performing companies last year.
So if CEO #1 was on the list last year, and the company did worse this year, they likely aren't on the list, saw a compensation drop, but hey, that doesn't make headlines to say "Top paid CEOs from 2022 saw a compensation drop of 10% this year".
It's not the same CEOs year to year, it's just the highest paid, and since CEO pay is mostly equity, it's probably the CEOs of the top performing companies last year.
So if CEO #1 was on the list last year, and the company did worse this year, they likely aren't on the list, saw a compensation drop, but hey, that doesn't make headlines to say "Top paid CEOs from 2022 saw a compensation drop of 10% this year".
> it's probably the CEOs of the top performing companies last year.
Citation needed. For Jefferies', one of those cited:
"Revenue Growth (Quarterly YoY) -8.35
Revenue Growth Rate (5Y) 8.06"
doesn't look stellar to me.
Citation needed. For Jefferies', one of those cited:
"Revenue Growth (Quarterly YoY) -8.35
Revenue Growth Rate (5Y) 8.06"
doesn't look stellar to me.
CEOs don’t get paid based on quarterly YOY results.
“Jefferies' 2022 total investment banking revenues, while down 38% from an off-the-charts 2021, represented our second-best year ever and were substantially above 2019 levels”
“Jefferies' 2022 total investment banking revenues, while down 38% from an off-the-charts 2021, represented our second-best year ever and were substantially above 2019 levels”
I assume the "top" percentiles for most fields will have reported above average earnings. It would have been a more interesting article if they also looked at the pay for top 100 doctors, athletes, or other salaries positions as a point of comparison.
That's kind of not what this shows. They're taking the top paid CEOs of companies that are worth >$1Bn, and then looked at their pay YoY. Your comparison doesn't really apply, because they're not looking at the 100 people who go the biggest pay rises, they're looking at the best paid. So most likely what's happening here is you have a bunch of CEOs of top companies in 2021/22 and they were paid like they were great, and this year they're being paid even more - even though last year they were already being valued like they were rockstars. It's not a great metric, but it just sort of highlights that CEO pay continues to just sky rocket away from normal pay.
I think the question to ask is: Look at these companies, did their CEO do: (a) better than expected this year, (b) as expected this year or (c) worse than expected this year. What seems to consistently come out of these articles is that CEOs who fit (a) get paid a lot more YoY, CEOs who fit (b) get paid a lot more YoY, and CEOs who fit (c) get paid a lot more YoY.
And of course, some of it is richly ironic, one of the companies listed is equilar - a company whose raison d'etre is suppressing employee pay, they're a legal version of a cartel.
I think the question to ask is: Look at these companies, did their CEO do: (a) better than expected this year, (b) as expected this year or (c) worse than expected this year. What seems to consistently come out of these articles is that CEOs who fit (a) get paid a lot more YoY, CEOs who fit (b) get paid a lot more YoY, and CEOs who fit (c) get paid a lot more YoY.
And of course, some of it is richly ironic, one of the companies listed is equilar - a company whose raison d'etre is suppressing employee pay, they're a legal version of a cartel.
Surely, if you get to the position of running a multi-billion dollar company on some level you should know what you're doing? No one is taking a rookie kart racing driver and putting them straight into Formula 1.
>Surely, if you get to the position of running a multi-billion dollar company on some level you should know what you're doing?
They probably know somewhat more than a recent MBA grad, but they aren't special geniuses, they made the right political decisions and have good connections. That meme, "your network is your networth," is very true.
They probably know somewhat more than a recent MBA grad, but they aren't special geniuses, they made the right political decisions and have good connections. That meme, "your network is your networth," is very true.
if CEOs don't do much, why aren't better people, with their supposedly better management skills, growing faster?
Networking. Knowing the whos who, and the whats what. Johnny off the street isn't going to be CEO by working hard. He gets to the top by knowing something or someone.
Nepotism is the key factor here, don't be fooled otherwise.
Nepotism is the key factor here, don't be fooled otherwise.
The best paid CEOs are not the most connected, though
Being connected is about who you know AND how well you exploit those relationships.
I agree. Management skills isn’t just about the company, but about your relationships and network.
Which ones are you referring to?
the key skill of a ceo isn't management, it's social connections
Sure, the boss of bosses should make more that the average worker, but 300x-500x more? Rationalize about "bringing value" as much as you want, but if this class division continues it will not end well for the rich.