How Many Workers Can You Hire for the Price of One CEO?

[marmar]

....(snip)....


CVS Caremark (CVS)
Thomas M. Ryan: $30.4 million (2009 Compensation)
Starting Cashier: $8/hour, $20,800/year
One CEO = 1,461 entry-level employees

AT&T (T)
Randall Stephenson: $29.2 million (2009 Compensation)
Starting Sales Associate: $10/hour, $26,000/year
One CEO = 1,123 entry-level employees

The Walt Disney Co. (DIS)
Robert Iger: $29 million (2009 Compensation)
Disneyland Hotel Housekeeper: $10/hour, $26,000/year
One CEO = 1,115 entry-level employees

McDonald's (MCD)
James A. Skinner: $17.6 million (2009 Compensation)
Starting Cashier: $7.25/hour, $18,850/year
One CEO = 933 entry-level employees

Target (TGT)
Gregg W. Steinhafel: $16.1 million (2009 Compensation)
Starting Cashier: $8.50/hour, $22,100/year
One CEO = 728 entry-level employees

Cablevision (CVC)
Founder and Chairman Charles F. Dolan: $15 million (2009 Compensation)
James L. Dolan: $17 million (2009 Compensation)
Customer Service Representative: $13/hour, $33,800/year
One CEO = 505 entry-level employees

Starbucks (SBUX)
Founder Howard Schultz: $9.9 million (2009 Compensation)
Entry-level Barista: $9/hour, $23,400/year
One CEO = 423 entry-level employees

Wal-Mart Stores (WMT)
Michael T. Duke: $8.5 million (2009 Compensation)
Starting Sales Associate: $9.75/hour, $25,350/year
One CEO = 335 entry-level employees

Nike (NKE)
Mark G. Parker: $7.3 million (2009 Compensation)
Starting Sales Associate, NYC Store: $9/hour, $23,400/year
One CEO = 311 entry-level employees

Time Warner Cable (TWC)
Glenn A. Britt $15.9 million (2009 Compensation)
Cable Installer: $20/hour, $52,000/year
One CEO = 305 employees

AMR (American Airlines, Inc.) (AMR)
Gerard J. Arpey: $5.6 million (2009 Compensation)
Entry-level Flight Attendant, flying minimum domestic hours: $20.24/hour, $21,252/year
One CEO = 263 entry-level employees

FedEx (FDX)
Founder Frederick W. Smith: $8.48 million (2009 compensation)
Handler: $13/hour, $33,800/year
One CEO = 251 entry-level employees

Costco (COST)
James D. Sinegal: $2.3 million (2009 Compensation)
Starting Sales Associate: $11/hour, $28,600/year
One CEO = 115 entry-level employees

JPMorgan Chase & Co. (JPM)
James Dimon: $1.3 million (2009 Compensation)
Bank teller: $12/hour, $31,200/year
One CEO = 41 entry-level employees

See full article from DailyFinance: http://srph.it/bxw0Og

[notadmblnd]

1. Between 300 and 500

on average they make between 300 and 500 times the average little person.

[TreasonousBastard]

2. So what? We know executives are highly paid, but even if...

you convinced the company to reduce the pay and put it into hiring people, what is the justification for hiring them?

Is there work for them, or do they get hired just because they need jobs?

Continuing the line of thought, though, what could be done with the saved money if a certain basketball player made only a lousy 2 million a year?

[Abq_Sarah]

3. Or if

Certain actors made $20.00 per hour?

[Hannah Bell]

6. funny -- the question isn't of interest where highly paid management is concerned, only where

highly paid worker (basketball player) is concerned.

[TreasonousBastard]

7. Nonsense-- the original question was about CEO pay. I brought up...

sports stars simply to expand the discussion.

It's become great sport to bash executive pay lately, but while everyone has an opinion on how they are overpaid, few have any idea what they should be paid.

Most paychecks are derived from the person's value to the enterprise. It gets tricky calculating value with nonprofits and government jobs, and they tend to look at competing private sector jobs, if they can. Most jobs are in the private, for-profit sector, though, and and it's not that difficult to calculate one's value.

Managers just tend to be more valuable to the enterprise. They carry more responsibility and have more of an effect on the workings of the business. The question isn't whether they should be paid more, but how much more. Admittedly, some companies have let the managers appoint the "independent" compensation committees who make the recommendations to the board, but few Western governments want to get into the business of micromanaging compensation.

Anyone who sells tickets (or anything else) be it a basketball player, singer, actor, or commissioned salesman gets paid on the basis of sales, sometimes making their pay insane. A corporate manager gets paid on performance, too (theoretically, at least) but for some reason we consider it OK to shove millions down the throats of pop singers while it being terrible public policy to pay managers who do a good job.

[jp11]

13. The difference is you have individuals who are solely

responsible or are very much the driving force behind success and profits such as singers/actors/sports stars and they stand alone as the 'face' so to speak of the product. CEO's aren't a face they sit behind the shadows and if 'good' have the will to try new and innovative things green lighting the creative and intelligent people under them, they don't design or build really anything they manage and take a chance on a kind of approach so to speak. When they do bad they ship jobs overseas, cut wages, cut benefits, close plants, etc to increase profits coming in by squeezing their costs more. They make so much more money than say 95%+ of the people working under them and their approach or policy is reliant on all the people under them doing their jobs and a small group of people being creative or innovative, yet they reap nearly all the rewards for success.

The 'stars' have people supporting them but it is they who sell the product as the face, they deliver a performance that is often over valued in several fields like films or music where the writers or people developing the visual effects are just as important as the face if not more so. Athletes also have people supporting them in the rest of the team but by and large they are viewed as expendable, it is the superstar everyone hero worships and wants to see win or make it to the finals etc. So teams will pay huge sums to lure the superstar over so they can benefit from the cash cow, CEO's don't carry that kind of potential for profit in themselves they rely on others in a way much different than most 'stars'.


To your original point, the goal shouldn't be to just hire more people to hire more people it should be to pay people a living wage, not $8-15, more money for working normal people means they can spend more and that is good for everyone. The shortsighted approach to bringing in more profit per dollar spent just robs people of the ability to spend as they have less money or have to work extra jobs and can afford to buy less. Then you need to bring in cheaper goods, how, by driving wages down more and looking for cheaper labor, as in importing cheaper goods. How long can we keep making things cheaper as people are made poorer and poorer?

[TreasonousBastard]

15. Wait a minnit! You're saying managers never do any work and have no...

responsibility or input into the enterprise's success? That's absurd at the outset, even before bringing in the entrepreneurs who started businesses.

I'm quite well aware of the problem of workers not sharing in productivity gains and staying behind inflation in their wages. It's always been arguable how to divide productivity between owners and workers but they are getting the shaft more lately thanks to the race to the bottom in wages. Unfortunately, I don't have an easy answer to the problem.

[Hannah Bell]

14. "a good job" isn't a requirement for ceos. and ceos & basketball players have nothing in common.

basketball players are highly paid workers, & will be riffed by MANAGEMENT/OWNERS as soon as they fail to perform.

but without the players, there's no game, and no profits for the management/owners.

CEO's operate under a different rulebook.

[TreasonousBastard]

16. Since when isn't job performance required for managers or owners? Just because...

some have rigged the system doesn't mean they don't have performance standards to meet.

The problem is more likely that you don't like those standards, which have more to do with profitability and stock price than social action.

[MrsBrady]

4. 8 dollars an hour is not 20K for the year - if you take

an hourly salary...you can basically double it to find the yearly salary (give-er-take)

8 dollars an hour is about 16K gross for the year.
Where are they getting the 20,800 number, in the CVS example?

[TreasonousBastard]

9. All of the numbers are off-- I suspect they are including...

basic benefits, payroll taxes, and other additional costs. I always assumed that would be an additional 25% over base pay, but that's just a starting assumption.

[old mark]

5. Yeah, but them CEO's are IMPORTANT! nt

[Catshrink]

8. Here's another source

http://www.aflcio.org/corporatewatch/paywatch/ceou/database.cfm

Starbucks:

How many workers could be supported by Howard Schultz's pay package?

Howard Schultz made $12,109,792, which is equal to:

7 Nobel prize winners
30 average university presidents
30 U.S. presidents
44 AFL-CIO presidents
64 Chairmen of the Joint Chiefs of Staff
377 average workers
803 minimum-wage earners

Petsmart:

How many workers could be supported by Philip L. Francis's pay package?

Philip L. Francis made $3,569,635, which is equal to:

2 Nobel prize winners
8 average university presidents
8 U.S. presidents
13 AFL-CIO presidents
19 Chairmen of the Joint Chiefs of Staff
111 average workers
236 minimum-wage earners

[Cal33]

10. Have the CEOs' annual bonuses been taken into account? nt

[DireStrike]

11. This is all thanks to our stock system.

CEOs do not need to be paid this much. It gets better at the bottom of the list... but I wonder if they are leaving certain forms of compensation out. It might be just raw salary with no stock options or benefits included.

Somebody mentioned that they dont want to get into the habit of "micromanaging" compensation. Why the hell not? Every other cost in a business is slashed to the bone, and then slashed some more. It is a miracle some places continue to keep working, through the hard efforts of the underpaid little workers.

CEO compensation on the other hand is inflated as large as it can be. This is because nobody with an interest is in charge of monitoring their pay. Stockholders either have too few shares (and no time after working at their $10 an hour job for 40 or 50 hours) to try and affect company policy... or worse, they are investing through mutual funds or pension plans/401ks which leaves them absolutely no means to exercise their rights as shareholders. The same people sit on all the boards of directors and work as CEOs themselves. The foxes guarding the henhouse. Our investment system is responsible for many of the problems in our society.

[unhappycamper]

12. Another question we could ask - How many CEOs could we hire for one of these:

Thomas M. Ryan: $30.4 million (2009 Compensation)
One F-35 = 7.99 CEO jobs at $30.4 million

Randall Stephenson: $29.2 million (2009 Compensation)
One F-35 = 8.32 CEO jobs at $29.2 million

Robert Iger: $29 million (2009 Compensation)
One F-35 = 8.37 CEO jobs at $29 million

James A. Skinner: $17.6 million (2009 Compensation)
One F-35 = 13.8 CEO jobs at $17.6 million

Gregg W. Steinhafel: $16.1 million (2009 Compensation)
One F-35 = 15.09 CEO jobs at $16.1 million

James L. Dolan: $17 million (2009 Compensation)
One F-35 = 14.29 CEO jobs at $29.2 million

Founder Howard Schultz: $9.9 million (2009 Compensation)
One F-35 = 24.54 CEO jobs at $17 million

Michael T. Duke: $8.5 million (2009 Compensation)
One F-35 = 29.59 CEO jobs at $8.5 million

Mark G. Parker: $7.3 million (2009 Compensation)
One F-35 = 33.29 CEO jobs at $7.3 million

Glenn A. Britt $15.9 million (2009 Compensation)
One F-35 = 15.28 CEO jobs at $15.9 million

Gerard J. Arpey: $5.6 million (2009 Compensation)
One F-35 = 43.39 CEO jobs at $5.6 million

Founder Frederick W. Smith: $8.48 million (2009 compensation)
One F-35 = 28.65 CEO jobs at $8.48 million

James D. Sinegal: $2.3 million (2009 Compensation)
One F-35 = 105.65 CEO jobs at $2.3 million

James Dimon: $1.3 million (2009 Compensation)
One F-35 = 810 CEO jobs at $1.3 million

[treestar]

17. It's a question of the market value

Admittedly without the people at the top, the jobs on the bottom would not exist. There's no point in complaining about this. Simply tax them.

[cbdo2007]

18. Hmmm, and how good would those companies do with an entry level person making executive decisions?

Some may do ok....most will go out of business and everyone would lose their jobs.

[DireStrike]

19. Gimme a break - there are thousands of people who could do their jobs just as well.

[bemildred]

20. So, fundamentally, we got nothing to lose by making the change. nt