Comments on: China's new weapon: Low executive pay

Factory workers make less in China than in the U.S., and so do CEOs. But the impact on the market remains unclear.

[arluthier]

Trickles down... whatever!

Big US companies send jobs and plants overseas because they can get their product created cheaper, hire cheaper engineers, hire cheaper execs, no healthcare, etc... and then complain that US citizens wont do the jobs.

If this was the case, you would assume that the prices for the goods created would DROP. Which in turn would mean that US citizens could afford to make less (i.e. cost of living goes down). But NOOOOOooo the big companies just keep raising prices, and pocketing the difference. All the while telling the world that the US is complacent with overpaying jobs.

[sal-magnone]

Funny

Compare an outsourced economy to an non-outsourced economy anywhere in the world: which one is buying more consumer goods?

Savings come in allot forms ... Unless you think we can make HD plasma screens in Boise for the same price as Southern Asia?

[Commander_Spock]

Who make the "better" mouse trap!

The this is--in that you are saying "Big US companies send jobs and plants overseas because they can get their product created cheaper, hire cheaper engineers, hire cheaper execs, no healthcare, etc... and then complain that US citizens wont do the jobs..."; but, the question that lingers is who can make a "better" mouse trap (although you offer your "real" and "legal" tender $$$)? Have you tried some from China lately!

[Penguinisto]

...so, how much did your computer cost?

I ask that because I remember paying nearly $3,000 (in 1993 dollars) for a 286 with 2MB of RAM, a CGA monitor, a 20MB hard disk, two floppy drives (a 3-1/2 and a 5-1/4), and a dot-matrix printer thrown in.

Now, I can plop over to Pricewatch, and shell out less than $500 for a machine that'll perform 95% of the tasks I need/want it to. For an extra $500, I can have one that does 99.9% of 'em.

Not counting inflation, computer prices have dropped to 1/3 of what they once went for. Counting Inflation, I'd say it dropped to only 25% of what they once went for.

--

We can also look at general electronics: A DVD player once ran for hundreds upon hundreds of dollars. Now you can pick one up at the local megastore for $30 or so.

Surround Sound systems? Sure, you could prolly buy a tuned Bose rig for a grand or two, but you can also get something with ~90% of the sound quality for less than 200 bucks.

Everybody ******* about globalization, but it has brought down prices greatly in areas where the products aren't protected by heavy tariff and/or VAT, or other local protectionist means.

/P

[wayne1231]

Go For it!

I say go for it! Outsource all of management. They all stand around on the unemployment line and tell each other it's for the best of the company.

Right now they all think that there's something unique about their positions that can't be filled overseas. Truth is that a Chinese MBA is probably just as good as an American one. As far as I know there's a good change they're in NYU like me. :)

[FutureGuy]

this is called shooting your own foot..

The CEO of company XYZ outsourced all manufacturing, know how and R&D to give a short term boost to their bottom line (and the CEO's bonus). They realized they don't really need XYZ or its greedy CEO, start competing directly against XYZ (now that they have the know how and expertise that the XYZ transfered to them), XYZ goes down and the CEO gets fired. This is how American enterprise will end.

[Macsaresafer]

American corporations have ended.

They're all publicly traded, and their stock is bought and sold by
people all around the world. None of them are American any more,
which is why we have so much outsourcing. We've been beaten at
our own game, but most of us don't know it yet.

[NoVista]

Case example

Some years back, Alloy Computer Products did an outsource deal on their crappy tape drives. The SE Asia mfr. would handle the trade only in SE Asia with a rebadged drive.

Supposedly the main 'western' markets would be controlled by the head office in Boston.

Lo and behold, here in Australia, the rebadged units started turning up for warranty repair. Say what? And in Europe too. Ha.

A few months later, the CEO was in shirtsleeves in the factory packaging product in hopes of trading out of Chapter 11. Nup. R.I.P.

Outsourcing and offshoring can definitely bite ya in the arse.

[mossman07]

China and kick backs

The executives salaries are small but the kickback are huge!!! This article is poorly research, its known fact that if do business in China that suitcase full of cash is need to do business. Who gets that $$? hmmm,let's see, the low paid executives?

[theitdude]

Welcome to America

I've just been through a year where many of our USA jobs went to China. We pretty much offshored everything to save money, except the Exec pay.

Even though our sales suck this year, the Execs got big bonuses due to the cost savings to offshore.

All the jobs are in retail now, selling goods for Communist China at the Lowes, Home Depot and Walmart.

[ChrisLang]

You are comparing apples to oranges...

If most Chinese CEOs make no more than $200,000 it's because the it is equivilent to what it can buy in China.

200 grand is the minimum yearly allowance for a family of four in the US, but what is it worth in China?

[cfwx]

Chinese living is cheaper

I am a Chinese engineer.My month salary is about $900. It is high than average.
In Shanghai,A family of three at least need $400.

[dmm]

200 grand???!!!

What planet are you on? I make "only" 100 grand per year, in an expensive metro area in the U.S., and my family of 7 is much better off than a lot of families I know. We're not rich, but we are well off.

Guess what ChrisLang? You don't need any of the following: new cars, expensive vacations, lawn service, maid service, coffee from Starbucks, private schooling, separate bedrooms for every child, Ivy League degrees, cable TV, high-speed internet, 5 PCs and 4 game machines, granite countertops, meals at restaurants, gym memberships, movie tickets, golf greens fees, or early retirement. These are all LUXURIES, not entitlements.

[mwfontan]

WRONG!

While I agree Chinese CEOs have alot more buying power with 200k than they do in the USA, it is still a paltry amount compared to the millions in base salary plus stock options, retirement plans, free healthcare, prepaid countryclub memberships, free use of luxury condos in major cities, and the golden parachute separation plans that typify the USA CEO compensation plan. Get real!

I've been waiting a long time for this day. All the USA CEOs will probably try to use the same reasons the labor unions use to say why outsourcing their jobs is so bad. Turnabout is fair play!

[suyts]

Crack is not

an entitlement. I'm comfortable with 50. Please understand the difference between NEED and WANT.

[georgescott]

Greed at the top hurts the entire company

CEO's making mega-millions while companies are performing badly hurt the company and the United States further by sending American jobs overseas so they can maintain there high salary even while sales are falling.

[chuck_whealton]

They do...

You're absolutely correct.

Even if sales are good, executive compensation is way out of control. They know they can get away with it because you'll never see stockholders get organized enough to do anything about it.

Charles R. Whealton
Charles Whealton @ pleaedontspam.com

[bluerain44]

GREAT POST!

It seems the only way to cut down overpaid executives is with Chinese executives.

Those would be a few H1-B visas I'd sponsor!

[Commander_Spock]

When....

... will there be legislation outlawing the outsourcing of jobs from the United States to other countries just for the sake of outsourcing them; and, (since we are in an computing age...) when are there going to be some real economic figures to justify some of these actions by some American companies vis-a-vis--product, service quality et cetera, et cetera!

[suyts]

Given the pace

of congress, when it is way too late.

[DecliningUSDollar]

Politicians

It would also be a good idea to offshore Senators and Representatives as well.

Dealing with China is going to be very, very interesting in the coming decades. US high schools need to be teaching Chinese in addition to math and science.

Additionally, something has to be done about IP theft and open piracy of software. Imagine opening a "branch office" in China - steal IP, set up your office with $5 copies of Windows and Office - all while you have 12 year olds cranking out your widget for nothing, and with your currency having a "floating peg" set to be lower than the US dollar, such that your goods are always a bargain. Who wouldn't want to do business in China?

[ss02906]

What IP

did you forget, almost every modern technology has its roots in China, ice-cream, silk, weapons, missiles ... all Chinese IP stolen for last 3000 years.. which country will be honest enough to pay for that?

One has to just look themselves in mirror, and be honest, before passing judgments about something you think you know.

[jaggedpath]

Doesn't make sense

'...with your currency having a "floating peg" set to be lower than the US dollar...'

What does this mean? How would you then set a "floating peg" to be "higher than the US dollar"?

You mean the US Dollar is a fixed constant?

[asdf]

yes yes oh yes

PLEASE let it happen that the coke snorting dirtbags that run these companies finally get what's coming to them. As a shareholder, I DEMAND that the company find the CEO who will take the LOWEST salary and provide the MOST value.

Kiss your fat white ***** goodbye.. and that prostitute you call an executive secretary? She's going to be telling someone else they're the best she's ever had now....

[human4us]

Who will be on top in ten years?

Within human social corporate hierarchies, certain individuals residing at the top of the economic pyramids make millions of 'imperial power coupons' otherwise known as: dollars or Yen, etc, while those at the bottom do the heavy work.
Government leaders and top corporate executives use imperial power coupons to motivate other human beings to do the hard labor, but if human industrial greed continues to create planetary global warming, the only temporary survivers will be the few people who can do creative hard labor fast enough...for themselves.

[Quixotic115]

evading taxes?

How do we know that what they report as their income is really true? Isn't it more likely that they reported a lower income and hide a lot of it to keep it from being taxed? Plus the GDP is in the trillions...the money's gotta be going somewhere. Either a lot of them are lying or there are just way too many executives.