Class Warfare Blog

January 8, 2018

Pigs at the Private Trough

I have written before about CEO compensation, mainly that it is being manipulated by the CEOs themselves and their hand-picked boards of governors (often made up of other CEOs). This largess isn’t supported by history in this country and now a major study by Bloomberg researchers has driven a stake into any argument that these overpaid CEO’s are worth what they are paid. A post on stated: “The Bloomberg researchers looked worldwide at major corporations of similar size and heft. In all, the researchers examined corporate pay records in 22 nations. In not one of these nations, Bloomberg found, do the executives of top-line firms make anything close to the paychecks of America’s corporate execs.

“In fact, America’s top corporate executives are taking home, on average, quadruple the average CEO pay that comparable top execs in the rest of the world are making.

“If this huge pay difference simply reflected a “marketplace” judgment on the sheer talent of America’s top execs, top U.S. corporations would be totally dominating global markets, outselling their foreign rivals by wide margins in everything from cars to computers.

“U.S. corporations are doing no such thing, of course. In one key global market sector after another, foreign corporations that pay their CEOs much less than U.S. CEOs are running neck and neck with their U.S. counterparts — and often leading the pack.”

CEOs and their cohort (business executives) are the largest growing segment of the 1% and are major drivers in the efforts to establish even greater wealth and pay inequality through manipulations of the government. If they were insects we would not hesitate to spray them out of existence for the pests they are.

I have suggested a way to dial back these bloated CEO salaries. It is relatively simple. If you like your current CEO, renegotiate his contract around a salary 50% of whatever they are currently making. If they say that they will “take their ball and go home,” say “fine.” Go to the Vice-CEO and offer them the job at 50% of what you were paying your current CEO. In all likelihood they will jump at the opportunity to improve their resume, but if they do not, go to the next most senior executive and offer him/her the job. You will find a taker and your company will not suffer much if at all. If you are in favor of a “kinder, gentler” process, you can make the reduction to 75% or whatever you deem appropriate. If the subordinates to your current CEO are also making bloated salaries, the same process should be applied to them. We certainly would not want the top executives making less than their subordinates! (Hey, the top guys used this to ratchet their salaries up, we can use it to ratchet the others’ salaries down.)

The fact the foreign companies that are doing as well or better than our companies are “getting by” with CEO pay one fourth of what we are paying says something. Heck, if you can’t find anyone in your corp who will take the job at 50% of current CEO pay, offer it to one of those foreign executives. To them the job will come with a pay raise.



  1. While I agree with the cure, isn’t that pretty much the same thing that happens to employees every time their overlords decide to sell out, or go in a different direction, or just be inconsiderate assholes in general? So the company makes more money and the CEO’s get bigger bonuses.

    I think it’s a great idea for bloated CEO salaries though. There has to be a day of reckoning for the 1%. What is going on is beyond capitalism and moved into the realm of criminal.


    Comment by shelldigger — January 8, 2018 @ 5:31 pm | Reply

  2. It’s the boards, not the CEOs who “run the show.” You have to penalize them to get true change. So, corps should pay an income inequality tax. AND have their dividends constrained by the same ratio. Of course, you’d want to take the top 5% of paid employees vs the bottom 5% to make it more fair.

    And what about share buy-backs? Got to figure how to nix that nasty habit. Maybe a repurchase where the company gets 1/2 of the shares and the employees get the other half. If you buy-back 1 you have to buy back 1 for every employee too!


    Comment by Anony Mole — January 8, 2018 @ 7:19 pm | Reply

    • Part of the problem is a Clinton era deal to moderate CEO pay, resulting in a loophole for stock options, so more and more CEO’s got stock options for their remuneration and became even more short sighted as managers. If the stock price went up, that was all they wanted, so they would do anything for that. That has to change.

      The solution is to give the employees a set share of the income of the company. If the company does better, so do the employees. If it does worse, everyone gets less. The whole idea of the CEO stock options is to give them a stake in whether the company did well or not. They just chose a poor form of payment.

      Liked by 1 person

      Comment by Steve Ruis — January 8, 2018 @ 9:07 pm | Reply

  3. 1. We need to stop pretending that income isn’t “income” (capital gains, stock dividends, payment in stocks, etc.), and tax it all at the same rate. (With some deduction at the bottom end to protect poorer people who benefit from those things.)

    2. We need a hard-and-fast connection between top-end pay and low-end pay. I read recently that the CEO of JC Penney made something like 1,200 times the salary of his bottom-end employees. Which should be criminal. No one is worth that. I think a 40x rule would be PLENTY. For example: If I make $20,000 a year as the lowest-paid employee at a firm, the CEO would be legally limited to $800,000 a year — including all benefits, stocks, etc. If he wants to get more, he has to first raise MY salary. If you can’t live well on $800,000 a year, you’re an idiot.

    3. Opulence is theft. There is a finite amount of wealth in the world. Owning so much of that wealth that other people can’t eat or pay for shelter or medicine is the CAUSE of starvation, homelessness, and ill-health.

    Liked by 1 person

    Comment by Anderson Connors — January 10, 2018 @ 9:29 am | Reply

    • I tend to think that all would be solved if we just increase the tax rate every $100,000 or so of income. Maybe when we get to people making billions a year we increase it every million or so.

      But making one billion dollars in a year is ridiculous and more than just a few hedge fund managers do just that. To make one billion dollars a year you would have to make a minimum (a minimum!) of $532,000 per hour. Someone doing that makes more money in one afternoon than I made in 40 years of being a college professor. And that is ridiculous.

      On Wed, Jan 10, 2018 at 9:29 AM, Class Warfare Blog wrote:


      Liked by 1 person

      Comment by Steve Ruis — January 10, 2018 @ 1:13 pm | Reply

  4. Steve,
    Thought you might like this:

    “It is an irony of history that Smith’s most famous idea is now usually invoked as a defence of unregulated markets in the face of state interference, so as to protect the interests of private capitalists. For this is roughly the opposite of Smith’s original intention, which was to advocate for restrictions on what groups of merchants could do. When he argued that markets worked remarkably efficiently – because, although each individual ‘intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention’ – this was an appeal to free individuals from the constraints imposed upon them by the monopolies that the merchants had established, and were using state power to uphold. The invisible hand was originally invoked not to draw attention to the problem of state intervention, but of state capture.”


    Comment by Anony Mole — January 16, 2018 @ 2:38 pm | Reply

    • I have read his book and also have a copy of his other book. Smith was a moralist and would be appalled at the cherry-picking of his invisible hand construct.

      On Tue, Jan 16, 2018 at 2:38 PM, Class Warfare Blog wrote:



      Comment by Steve Ruis — February 18, 2018 @ 12:47 pm | Reply

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