Rym will point out the problems but what about a one-time capital gains adjustment tax where all assets that fall under capital gains rules are treated as if sold and bought (gains/losses realized) on the last trading day of the year?
If the owner has a net gain taxes are paid. If a net loss they get to carry it forward. I imagine a good trillion dollars could be collected?
I'm curious to know what the pay disparity is in mid size companies.
If a company has 100 employees and the CEO makes 10x the salary of the average employee that sound fair. Now, what happens if 10 of these companies merge to form a bigger company of 1,000 employees. The existing CEOs become local/subsidiary CEOs and keep their 10x salary but what should the persons above them make for monies? Now you have a CEO of 10 combined companies making the same money as the CEO in charge of a division with only 10% of the people? Should this new CEO make more than 10x? Should the former CEO slots have their pay downgraded?
That's why I'd like to see numbers and data on different size company CEO pays.
My company was bought up by a larger company a few years back. We went from having a CEO who was in charge of everything to a CEO who was in charge of all the same things but now had higher ups to report to. The salary for the job stayed about the same (as did the responsibilities) but the people higher up the totem poll then him make a lot more money.
There's other sources in that paper that point to original sources instead of just meta-analysis, but it's a pretty old paper. I'd be surprised if things have changed THAT much in 6 years though.
I'm curious to know what the pay disparity is in mid size companies.
If a company has 100 employees and the CEO makes 10x the salary of the average employee that sound fair. Now, what happens if 10 of these companies merge to form a bigger company of 1,000 employees. The existing CEOs become local/subsidiary CEOs and keep their 10x salary but what should the persons above them make for monies? Now you have a CEO of 10 combined companies making the same money as the CEO in charge of a division with only 10% of the people? Should this new CEO make more than 10x? Should the former CEO slots have their pay downgraded?
That's why I'd like to see numbers and data on different size company CEO pays.
You might be able to find that information by looking at IRS data, but I'm not sure how much of that stuff is disclosed publicly. I don't think you could look up my tax return, for instance, or the one of the CEO of my company (a mid-size company). I do know his salary though, from other means, and he makes about 20x what I do in salary alone (without any stock options or bonuses figured in, which I don't get).
Where base CEO salaries are concerned, the median for this group was $410,923, a 1 percent increase over the year before. Interestingly, this is lower than the average increase reported in most national surveys for all employees (2.9 percent). In the 43 companies where the same incumbent was in place during the last two years, 24 companies increased base salary in 2010, 16 maintained base salary at the same level, and three actually decreased base salary for the CEO. Among those experiencing the largest increases were Lawrence Cohen at Capital Senior Living (up 48 percent) and George F. Jones Jr. at Texas Bancshares (up 21 percent). It is risky, though, to evaluate just one component of compensation in isolation. For instance, Cohen’s base salary increase was due to eliminating a special quarterly bonus for achieving earnings-per-share goals and implementing a new employment agreement.
Looks like mid-size businesses are much closer to the 10:1 ratio than large ones. Could it be because large business is so large that a 10:1 ratio simply makes no sense?
Hrm, I'm not sure if the CEO would be entitled to making 100x the pay in your scenario, as his bonuses from stock skyrocketing would net him a very tidy amount of money. As well, the average pay may stay the same or even reduce if there are significant redundancies. If 10 companies of 100 employees merged, I'm not sure you'd have 1000 workers all working at the end of the day.
I think the thing to look at would be the differences between why Japanese CEOs are making 10x while American CEOs are making far more. I doubt it's simply because our businesses are bigger. Personally, I think it would end up being cultural differences.
Hrm, I'm not sure if the CEO would be entitled to making 100x the pay in your scenario, as his bonuses from stock skyrocketing would net him a very tidy amount of money. As well, the average pay may stay the same or even reduce if there are significant redundancies. If 10 companies of 100 employees merged, I'm not sure you'd have 1000 workers all working at the end of the day.
True and I wouldn't expect him to make 10x what the manager directly below him makes. Perhaps 1.5 to 2x but certainly not 10x.
Yeah, I also wonder when exactly the total compensation starts making larger jumps. I mean, I don't think my manager makes more than $10-$15k more than I do, which I'm OK with considering she has a decade more in the industry than I do and is good at her job. But does HER boss make 100k more than her a year? Or, total compensation, $400k more? Is that OK, considering that the responsibility is a bit more? And is the responsibility THAT much more?
Or.. does pay stay at a certain rate, maybe +/- 50%, and then when you hit Executive level you start maxing out the bonus points and hitting the big point multipliers?
Comments
If the owner has a net gain taxes are paid. If a net loss they get to carry it forward. I imagine a good trillion dollars could be collected?
Relevant.
Also, when I look at that:
This article (http://thinkprogress.org/economy/2011/06/21/249949/32-corporations-spent-more-compensation-paid-taxes/) says 263:1 up from 30:1 in the 70s, and it sources to here: http://www.ips-dc.org/reports/executive_excess_2010
http://thinkprogress.org/economy/2010/09/01/116858/ceo-compensation-workers/
http://www.aflcio.org/corporatewatch/paywatch/paydisparityratio.cfm
And this compare Japanese to American CEO pay: http://thinkprogress.org/politics/2010/07/08/106536/japanese-ceo-american-sixth/
This one says 301:1 http://www.commondreams.org/news2004/0414-10.htm
EDIT: fixed linkings.
Japan Airline Boss
Anecdotal, though.
If a company has 100 employees and the CEO makes 10x the salary of the average employee that sound fair. Now, what happens if 10 of these companies merge to form a bigger company of 1,000 employees. The existing CEOs become local/subsidiary CEOs and keep their 10x salary but what should the persons above them make for monies? Now you have a CEO of 10 combined companies making the same money as the CEO in charge of a division with only 10% of the people? Should this new CEO make more than 10x? Should the former CEO slots have their pay downgraded?
That's why I'd like to see numbers and data on different size company CEO pays.
My company was bought up by a larger company a few years back. We went from having a CEO who was in charge of everything to a CEO who was in charge of all the same things but now had higher ups to report to. The salary for the job stayed about the same (as did the responsibilities) but the people higher up the totem poll then him make a lot more money.
CEO Pay vs Average Worker
There's other sources in that paper that point to original sources instead of just meta-analysis, but it's a pretty old paper. I'd be surprised if things have changed THAT much in 6 years though.
link http://www.greenwich.com/Greenwich0.5/CMA/campaign_messages/campaign_docs/gr_bus_forum_june_08_sr-exec-compensation.pdf
Looks like mid-size businesses are much closer to the 10:1 ratio than large ones. Could it be because large business is so large that a 10:1 ratio simply makes no sense?
Here is a Harvard Paper on the issue
I think the thing to look at would be the differences between why Japanese CEOs are making 10x while American CEOs are making far more. I doubt it's simply because our businesses are bigger. Personally, I think it would end up being cultural differences.
Or.. does pay stay at a certain rate, maybe +/- 50%, and then when you hit Executive level you start maxing out the bonus points and hitting the big point multipliers?