Comments on: The great overpaid CEO debate

Think you're underpaid compared to your CEO? PayScale exec Fred Whittlesey says the data may tell a different story.

[cranberrydancer]

"Stop CEO-ing"?

The suggestion that "good CEOs would stop CEO-ing" just because they could only make 100 times (instead of 500 times) what "the average worker" makes is ludicrous.

If he's in it for the money, what else is he going to do that'll make him more money? And if he's not, then it won't matter anyway.

Give me a break. These guys are obscenely overpaid.

[twolf2919]

flawed arguments in favor of CEO pay

The author makes several arguments that are either irrelevant or don't hold much water:

"...And the average CEO pay has been earned by more than a few average technology company workers who had stock options in the right company at the right time..." How is this relevant? These one time windfalls have no relationship to the continually overpaid CEOs. It's like saying "I know of quite a few people winning 200 million in the lottery and CEOs don't make any more than that." What hogwash!

"...Most CEOs I've dealt with are highly intelligent....come from top schools...work 70+ hours per week...even if not CEOs they'd get paid much more than the average person." Many of the people I've met come from top schools and work 70+ hours per week (and these 70+ hours don't include visits to golf courses, board meetings in tropical locales, etc.), and they do indeed earn more than the average person. But their extra earnings is measured in percentage points rather than orders of magnitude!

"...Comparing CEO pay to average worker is as meaningless as comparing an engineer's salary to a postal worker's." This argument is ridiculous for many reasons: first, a CEOs pay is often compared to the average worker at their own company! The author, comparing engineers to postal workers, is comparing entirely different professions AND at different companies. Not same thing. And even then, the difference is, what 20%...50%? A far cry from 100-200 TIMES more! Furthermore, no one doubts that someone with additional responsibilities/educational backgrounds should be paid more than those without those responsibilities and qualifications - what is being questioned is whether CEOs responsibilities and qualifications are so vastly greater that they warrant the vastly greater compensation (and, again, we're talking about orders of magnitude differences!) No one in their right mind (except those involved in negotiating CEO pay or the CEOs themselves) could believe such a thing.

"...secretary earning double market because she has been there....no pay cap in these professions." More pointless rethoric. First off, how many instances of secretaries getting paid double market rates can the author quote? Is she making double what all the other secretaries are making AT THE SAME COMPANY? The author claims CEO pay relative to average worker is comparing apples to oranges...and then proceeds to make apples to oranges comparisons.....but even if he found that this secretary made double what the others in her firm made. Big deal! Relatively speaking, CEOS make obscenely more money than this secretary.

The argument could be made that CEOs get paid what the market will bear. But that is not so in reality: individual share holders of a company cannot vote on CEO compensation issues - that is usually approved by the board of directors....and guess who is usually on these boards? The CEO's buddies from the golf course who are, frequently executives themselves - and this CEO may be sitting on their board approving their future pay packages! One hand washes the other. It's a very corrupt system.

CEOs have great responsibility. They frequently, but not always, have stellar educational backgrounds. Sometimes their leadership is obviously responsible for the company's success (e.g. Steve Jobs at Apple.) More often than not, however, they're just as replacable as the average worker within a company (to wit, there are numerous examples of changes at fortune 500 companies without much difference in the fortunes of that company.) Now, with the exception of those very few CEOs that single-handedly created a company or brought it back from the brink of disaster, how could any CEO claim to be worth 100s of times more than the average worker at HIS company? It's a ridiculous thought...only people with a vested interest could think otherwise.

[mattmchugh.com]

U2 / Motley Crue + CEO = BS

Of the many strains of astoundingly chowder-headed,
overprivledged rich-white-guy disinformation that constitutes
Fred Whittlesey's op-ed on CEO pay, the one the item that most
amuses and annoys is his anecdotal comparison of a CEOs
personal compensation package to a touring rock band's "gross
receipts" (which pay an army of roadies, security, support staff,
etc.). Bono ain't pocketing no $1 million bucks a show, folks.
And even if he was, he'd just use most of it to pay off African
debt (at least that's what he'd say he'd should do with it).

CEOs are grossly overpaid in the U.S. Do a smidge of research
and that becomes patently obvious. Smart, Ivy League guy
heads up a multi-billion-dollar company and makes a few
million a year? OK. Sounds fair. What? You say he's making
tens of millions a year, all while the stock price has declined, the
pension fund has been frozen, and 20% of workers have been
laid off? Indefensible. Plain and simple.

How much you get paid to sling this hash, Mr. Whittlesey? And,
if we stop paying you, will you stop?

- mattmchugh.com

[rockosmodurnlife]

Like any of you wouldn't take the money.

Somebody offers theses CEOs the contract and the CEOs sign it. Saying they are overpaid is the equivalent of pulling clothes out of the washer and asking why they are so wet?

Don't blame the people who accept the contracts, blame the people who offer it to them and don't write it clauses based on performance and any other variable their hearts desire.

[qwerty75]

They are overpaid

It is more then obscence when a CEO slashes jobs and then accepts a bonus greater then the combined income of all the people he just fired over several years.

IMO, the problem is not just because people who get MBA's are greedy, lazy and unintelligent(after all if they were not lazy and dumb they would have worked for a real degree and not just one that requires a heartbeat), it is the shortsighted policies of concern over shareholders.

Serve your customers properly and everything else will fall into place.

[gap1234gap]

Typical red herrings

This article intentionally confuses possibility with probability. Yes I know some people in the tech workplace who made lots of money on stock. However, on the average non-CEOs don't make much money in salary or stock. A much better argument would be to base the discussion on the difference in the median salaries, which eliminates the really exceptional cases. Unfortunately the salary difference is pervasive when using median salaries as a quick google search will show.

[broke&used]

overpaid ceo

someone at the top should be able to remember life at the bottom ,If he or she started there, but isn"t that the problem, most are handed their positions, if they had worked there way up as their grandfathers had to, america would still have strong leaders in industry and government not educated idiots with no ethics or morals

[atlarge1]

The great overpaid CEO debate

Fred, you may not be an apologist for the CEO's, but you sound like one. Your analogy concerning U2 and Motley Crue is weak at best. One could argue they are self-employed, private contractors. They earn market wages.

And the Overpaid CEO's are usually employees of large, publicly traded, corporations. They are overpaid because they establish the terms of their own compensation package (manipulate the market). Then they profit even more by offshoring the jobs of workers and supply contracts that had been fulfilled by domestic vendors,

You also declare we need to focus on the real problem, apply pressure to fix it, but then fail to state the problem or where the pressure should be applied.

I think you are afraid to touch the hand that feeds you.

[krait]

One wonders if a field worker made any of the gross mistakes that many of our vastly overpaid CEOs have made lately what he/she could look forward to.How about a large pink slip

[jeremy_baca]

Show me a CEO who will work for 250,000 a year instead of the 10 to 15 million and I will start to believe in the system. I would never take a position for a company for millions of dollars a year. I believe that those who do live eat and breath for the company. 70 hours a week, shoot, that is no life. Money cannot buy happiness. Nice things that perish is about it.