"I think there is a balance to be met and it starts with executive wages being no more than say, a multiple of 15 times the median wage of their workers? Some say it is up to 50 in some companies. The other philosophy is for less bonuses that drive problematic behaviour. See the former Beoing CEO for the worst case of bonuses driving literal bloody-minded carnage."
The wages of executives in the private sector are set by the owners of private sector enterprises, i.e., the shareholders. If I, as a shareholder, think an executive of my company is worth XYZ dollars, on what basis does anyone deem that to be inappropriate remuneration?
Why does anyone other than the owners of businesses get to say what those owners pay the people they select to manage their businesses? If executives get paid more than they are worth (which is not uncommon), the shareholders, and no one else, bear that waste.
The other philosophy is for less bonuses that drive problematic behaviour. See the former Beoing CEO for the worst case of bonuses driving literal bloody-minded carnage."
A few outlier data points don't constitute a truism. Now do all the vast number of cases where bonus incentives have led to extraordinary shareholder value creation.
The market for executive labour clears where it clears; it is simply a matter of supply of executive talent vs demand for it.
Similarly for lower-level employees; no one is an indentured servant these days. People are free to take their labour where they believe they will obtain the optimal financial, social and physical return for it. So the market for working class labour also clears where it does, albeit it comes with a legislated collar support in the form of a minimum wage, which is set by the government (which is a good thing to protect lower grade workers from being exploited).
But to say that the setting of executive remuneration should occur by an arbitrary mechanism outside of the say of company shareholders smacks rather like centrally planned economic management.
COL Price at posting:
$18.89 Sentiment: Hold Disclosure: Held
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