Especially with GM’s CEO getting the flack she is, I which industry would move to a more modest $250,000 to $500,000 base salary and all other income is based off of performance of the company. That way they have the most Incentive to make the company do good.
Like the Rivian CEO, should be making enough for a nice living situation, but shouldn’t rack up the $$$ until he is able to get the company profitable. I think that is a fair approach and allow for companies to reinvest as much as possible back into them. It also helps us investors in a company, as stock prices should go up.
Glad Tim is getting his beans. While not the most innovative period of Apple, Tim has done a great job with market cap and share prices.
These highly compensated CEO’s compensation packages are set by their individual company’s board of directors, not “the industry.”
Companies compete for CEOs just like sports teams compete for top talent. In fact, some of the compensation packages given to the top sports talent dwarf what top CEOs in challenging industries who consistently deliver results are awarded.
I’d bet that some of the striking workers who are complaining about the size of their CEO’s compensation package have no issues at all with their favorite sports team paying one player more than they pay everyone else on the team combined.
Why do the owners of these sports teams award such massive contracts to one or a few players? Because the owners believe that particular player is going to pull in additional revenue over time that greatly exceeds what they’re paying that player. In some cases the owners may have to increase the customer’s price of their “product” to recoup their investment more quickly, but as long as their customers think the increase in price is worth it, no problem.
The analogy between the best CEOs and superstar sports athletes extends to the performance side of the equation as well. If they meet certain targets they can reap additional bonuses. But if they don’t meet expectations they can be fired. In similar fashion, fired CEOs often have golden parachutes while “fired” sports superstars often get guaranteed money up-front that they get to keep whether or not they play a single game.
If the owners and boards of these businesses and sports teams weren’t benefiting significantly from these compensation arrangements, and if customers weren’t happy with the business paying for the top talent, they would not be doing these deals, well, at least outside of Cleveland.
And yeah, Tim has proven that he is worth every penny they pay him, and then some.
You kicked off with an Ad Hominem fallacy and went down hill from there.
I’d like to see your definition of ad hominem fallacy. I’m very familiar with that fallacy because in the US we see it playing out on a daily basis with a particular ex-president and candidate. The basis of the ad hominem fallacy is to attack the person making an argument or assertion rather than attacking the assertions being made.
“Ad hominem fallacy is a group of argumentation strategies that focus on the person making an argument rather than their viewpoint. ”
The basis of my comment is that the compensation awarded to singularly unique talent in a competitive market is based on ROI expectations made by those who put forth the offers, not some industry established calculation for what compensation should be awarded based on particular roles.
Nowhere in my comment did I question to worthiness of any individual to be compensated in the manner that they are. Those questions are completely within the realm of those who extend the compensation offers to prospective candidates.
"I’d bet that some of the striking workers who are complaining about the size of their CEO’s compensation package have no issues at all with their favorite sports team paying one player more than they pay everyone else on the team combined."
That what your Ad Hominem. You arguing that the striking workers you hypocrites (sans any evidence) and using that to delegitimize their stance. Arguing that a person or persons should be discounted due to their hypocrisy is one of the most common forms of the Ad Hominem attack. A person behind hypocritical doesn't make them wrong, it makes them inconsistent. You went after the person for being inconsistent rather than addressing the substance of what they said. That is a text book Ad Hominem fallacy.
Nothing in my comments were intended to be a personal attack on anyone or any group. My intention was to provide two examples of similarly motivated compensation models that are both driven by very similar business imperatives, which is to increase the revenue of their particular business. One of these instances is very frequently and publicly vilified (highly compensated CEOs) while the other one is openly celebrated (highly compensated sports figures).
The reasons why these two instances of the same business behavior are viewed in far different lights is anyone's guess. My guess, my opinion, is that a lot of people have not considered the similarities that exist between different business instances executing very similar compensation strategies. When each instance is viewed in isolation and with a lack of awareness of the commonality, the common rationale behind the decisions never enters into the conversation. Here's how I see it:
1. Ask someone about their opinion on CEO compensation
2. Ask someone about their opinion of a star sports figure
3. Explain the commonality between the two from a business perspective
4. Ask someone if the commonality or business rationale changes their opinion on either CEOs or star sports figures
My comment regarding workers who are upset about their CEOs pay and comfortable with a star sports figures pay gets us to step 2. You have two isolated data points. Anything beyond step 2 is pure conjecture. If you're of the opinion that regardless of the argument made in step 3, an individual would still say that a highly compensated CEO is unfair while a highly compensated athlete is totally fair, then you could possibly form an opinion that the individual is being hypocritical. That would be an overly harsh statement because you don't really know the rationale for the seeming inconsistency. My entire comment was all about step 3. I have no mechanism or desire to perform step 4. That's an exercise left for the reader. But I neither made nor inferred anything related to calling anyone a hypocrite.
Even if I had done the exercise left for the reader part and questioned the judgement, inconsistency, or limited perspective of some unnamed person or group based on my own presumptive responses to steps 1 and 2, that still would not make it ad hominem attack. People don't always see things through the same lens that I do. Everyone is entitled to their own opinion. In liberal societies people are free to state their own opinions publicly and to disagree publicly with other people's opinions.
Finally, I'm not taking a side, picking on sports, or even weighing in on whether any highly compensated business person, athlete, college president, doctor, lawyer, actor, or whatever is "worth" what they are getting paid. That's the polar opposite of what I want to do. I respect that the people who are making compensation decisions for these very special, highly compensated individuals in any business have very legitimate, rational, and defensible reasons for doing so. I don't want to fall into the trap of assuming that popular sentiment expressed in the media is warranted. I don't believe that CEOs, athletes, or any other highly compensated person whose compensation package is the result of a business decision and agreement established by others should be publicly challenged to justify their own pay. Ask the board of directors or whomever put together the package. As other commenters have clearly stated, the bottom line compensation numbers for senior executives in publicly traded companies is public knowledge.
“ My comment regarding workers who are upset about their CEOs pay and comfortable with a star sports figures pay gets us to step 2.”
Right, I understood that. That is why I said you started with an Ad Hominem, because that is what you did. I also said you went downhill from there because you used the Ad Hominem to transition to a False Analogy Fallacy. Striking auto workers complaints are about how workers are compensated for their contributions. Athletes are workers not CEOs. It’s a profoundly flawed analogy. At best the analogy works against the point you are trying to make. You are arguing workers (the athletes) deserve to be paid well because the contribute to overall success. That is exactly what the auto workers are saying.
Lastly, you are misrepresenting the auto workers complaint, it isn’t that the CEO makes a lot of money, it’s that the CEO has seen year over year pay raises north of 30% and their wages have been stagnant. At no point have they said the CEO shouldn’t make what she makes. They have simply asked for the contributions to be recognized. So in addition to the two above fallacies you have committed a Straw man fallacy as well.
I kindly suggest you look into a class in Logic at local university or college. It will help with understanding formal and informal fallacies as well with structuring arguments.
Comments
Right, I understood that. That is why I said you started with an Ad Hominem, because that is what you did. I also said you went downhill from there because you used the Ad Hominem to transition to a False Analogy Fallacy. Striking auto workers complaints are about how workers are compensated for their contributions. Athletes are workers not CEOs. It’s a profoundly flawed analogy. At best the analogy works against the point you are trying to make. You are arguing workers (the athletes) deserve to be paid well because the contribute to overall success. That is exactly what the auto workers are saying.
Lastly, you are misrepresenting the auto workers complaint, it isn’t that the CEO makes a lot of money, it’s that the CEO has seen year over year pay raises north of 30% and their wages have been stagnant. At no point have they said the CEO shouldn’t make what she makes. They have simply asked for the contributions to be recognized. So in addition to the two above fallacies you have committed a Straw man fallacy as well.
I kindly suggest you look into a class in Logic at local university or college. It will help with understanding formal and informal fallacies as well with structuring arguments.