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rradina

join:2000-08-08
Chesterfield, MO

Why Transfer Wealth?

Why do so many attack executive compensation as the root cause of increased prices? Why is the answer paying them less and using that money to make the product better or reduce prices? Unless it's a very small company, dividing a million by 1,000 employees is only $1,000. That's only a $20/week increase and I don't think it's enough to motivate higher quality or more productivity. Likewise, removing $1M from COGS probably doesn't move the price needle.

While there's no doubt that when reviewing the history of executive compensation vs. the average worker's pay, change is afoot. But I'd rather argue that it seems typical to compensate executives regardless of performance. Granted, there are always performance-based bonuses but even if they make a horrible decision, they still make more money in a year than most in a lifetime. If the average worker makes a horrible decision, they'll get fired and they instantly become one of the millions without health insurance.

Just like the argument to keep the commercial skip feature is that folks can leave the room or just use fast-forward to not watch the commercial, I believe there are better arguments when citing overpaid executives.