While the rest of us were looking for jobs last year, "incentive pay for the chief executive officers of 50 major corporations jumped 30%", as quoted from the article. The reason? Their companies' stock prices rose considerably.
Blogger Gandel notes that stock prices are usually indicators of nothing at all whatsoever. And I agree. Weren't stock prices rising through the roof earlier due to "good decisions"? Where are we now? And right now, I say that stocks are not up simply because of any particularly good decision making the CEOs did, but simply because consumer confidence rose. When people start getting work again, when people start getting salaries again, when people start buying again, obviously stock prices will go up, unless the CEO really is a bonehead. Honestly, the CEO could just make sure that the company didn't die, the goods and services provided were of good quality, and the stock prices would go up. The stock market only shows effects of decisions in the short-term. The long-term stock market trend is a bubble made not by CEOs, but by investors.
Maybe that bonus should go to the workers for keeping the business operable and reliable. A business's stocks would fall if its workers were unreliable. Quite unfortunate when workers get nearly no bonuses at all.
Sunday, March 20, 2011
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6 comments:
I think that the post is somewhat misleading in that it says the executives are giving themselves a pay raise, even if an executive's salary goes up because the overall stock goes up. However i believe that part of that overall prosperity should be attributed to the "workers", but unfortunately, thats not how businesses operate.
The employee is the backbone of the company, and its a shame that a company's success doesn' trickle back down to the workers.
As I've always said, private corporations do not exist to serve its employees. It's there so that those in charge can make a lot of money. They never professed to be a company by of and for the people. Point being, I don't think they have an obligation to give pay raises to their employees. If the employees don't like the company's ethic, work somewhere else, otherwise, be thankful for the fact that you HAVE a job in the first place. And who do you have to thank for that? Those evil greedy CEO's. Now I'm not saying there is NO moral issue at hand by CEO's taking a fat payraise while their employees don't have any, but like I said, they are not in the business of being moral. They're in the business of, well, being in business.
I don't think that the CEO's need more money. Although their stocks do increase in price, I don't believe that the CEO should take the money. They already have enough. According to the reading "The rich, the poor and the growing gap between them", the typical chief executive earns 300 times more than the average wage, which is ten times more than what CEOs made in 1970. That is already an ample amount of income, and adding more income on top of that is pointless. That money should be going to the workers and people who don't have as much excessive income.
As stated before, the CEOs of these large companies definitely do not need these raises. They make more money than they could spend, while there are more than a million homeless people living in the streets in America. Now, I'm not saying large corporations should give out handouts to these homeless, but money could be directed toward some charitable organizations. This issue relates to the topic of inequality of wealth which we are discussing in class right now. The rich may get richer, while the poor will stay right where they are.
Management is needed in order for a company to prosper; you could have the most skilled workers but if they have no sense in direction then the company will fail. So management deserves raises if a company does well, which includes the CEO. And like what Bryce said, someone else gave them the raises.
I also agree with Bryce and Jason when they daid that the employees are everything to a company yet they aren't the ones to get the huge raises and they probably never will. That is just how business workers. An executive knows going into the job that they can allot themselves huge pay raises and get away with it. They don't open up a business just for their employees to make money, but also for themselves to be able to make big bucks. It's a shame.
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