Purpose of any Company is Profits - screw the workers

[Bullitt]

Originally Posted by sugarpop

The way I look at is this, if the wage disparity is addressed as a % of what the top can earn over the bottom, then the majority of the workforce would actually enjoy higher pay. The only ones who would suffer, if you can even call it that, are the ones who are making really, really high salaries. I honestly believe if the company shared the wealth more evenly with the workforce, they would have a happier, more loyal workforce who would be willing to work harder to make good things happen. A happy, respected, well-paid employee is a GOOD employee. And unhappy, disrespected, under-paid employees, not so much.

Severe wage disparity is a real issue to contend with for sure. It is irresponsible for a company to force workers into low wages that are not at all proportional with the cost of living. Greed at the top can be astronomical and at times has resulted in the loss of thousands of jobs, homes, and cause undue stress and harm to countless families. However, it is just as irresponsible to assume every company, every executive, is this way and to call for artificial caps on all executive salaries because of the misdeeds of some, not all. There are moral and immoral people on every rung of the socio-economic ladder, executives and janitors alike. One thing to keep in mind is the exponentially increased responsibilities, not necessarily in terms of number but also weight, that come with many executive positions. I hate to use anecdotal evidence, but I can't help it in this case to at least just use a particular man as an example of an executive who does not at all fit this perceived mold of the greedy, money loving executive pig that lives off the work of others, in no way deserving of large salaries. My father is vice-president of sales & marketing and also head of the automotive division of the skin care company he works for. He is responsible for millions of dollars of sales a year, as well as product development and continued growth for the automotive division. He earns a tidy sum for his work, but he does in fact earn every penny of it. Our family enjoys upper-middle class wealth because of the hard work he puts in at the office every day and more often than not at home every weekend. He is constantly pouring over data, making reports, keeping up with market trends, staying in touch with distributors, clients, and keeping tabs on potential areas for growth as well as the competition. No he does not do the manual labor, drive the warehouse forklift, or come home dirty and sweaty like many of the workers at the plant do. But in no way does that reflect on the amount of time and effort he puts into his work, sometimes at the expense of time with the family because that's what his job requires.

What I am saying is that though he is compensated very well for his work, and there are undoubtedly some in this country who would like to see executives like him not make as much as they do just because of the principle of wage disparity, he is compensated in a manner that is proportional to his value to the company as a whole. His responsibilities and decisions weigh heavily on the direction and success of the entire company. He has acquired specific skills and experience over the years working his way up the corporate ladder that make him the right tool for the requirements of his job. It would be extremely unfair to him to cut his salary just to diminish wage disparity. Of course a company should reward its employees generously, including everyone at the bottom. But I find fault in allowing that mindset to blind a person to the fact that many executives actually deserve high pay. Not all of course, there are many that will bleed a company dry for their own personal benefit and toss its employees around with no regard for their income needs. But not every executive is like that, and I object to any sweeping assertion that every executive in corporate America should have an artificial wage cap. My father may make almost 6 times what the average worker in the plant does, but he again earns every penny of it. To artificially deny him that fair compensation, dictated by the head of the company, is greed in the opposite direction. Greed by those who think his work is just making powerpoint presentations and playing golf all day. Greed by those who assume an executive's job is among the easiest professions in the world, and because of that executives owe everyone below them a piece of their salary pie. I assure you, there are highly paid executives of some companies that deserve the pay they are rewarded.

The company my father works for is doing very well through this economic crisis, and they see no reason that it would not continue to do so for the foreseeable future. He is an instrumental part of keeping this healthy company afloat and moving amid the economic wreckage littering the corporate landscape in America. One may look at the fact that he makes 6 times the average plant worker (15 times what I made there as a summer intern a few years back) and shout "capitalist pig!", but the company is healthy and growing while others are in decline or failing completely because of the smart strategy and decision making by those at the top of the company.

My parents are both children of divorced households, alcoholic parents, and very poor socio-economic environments. One grew up in the ghetto of San Diego, running around barefoot eating only plain white toast for breakfast everyday and a single egg for lunch for years. The other grew up with the weight of being among the poorest kids at school, 12 years old walking home from swim practice alone at night while dad is drunk in a bar downtown and who eventually wrote him out of his will because he didn't want to keep working at the failing family radiator repair shop in the desert. My parents know what it is like to work dead-end jobs and have worked their way up the ladder of prosperity through determination so they could provide a better environment for their children than they had growing up. And they succeeded. I say all this because my father is a real person, my parents are real people, and he is not some evil corporate menace that feeds off the backs of the poor and the uneducated. My parents give generously to charity because they believe in helping other people through tough times, because they know exactly what it is like; they experienced it at the worst possible time in life. Anyone who says that my father's salary is unfair, he should have his pay capped and the difference spread thinly amongst the general employees can straight go to hell in my book. He is a man if integrity and does not "hoard his wealth from the masses". He gives and gives because he was once on the receiving end of that kind of giving.

Painting all executives with this biased brush of "they make 6 times as much as the factory worker so they must just be greedy pigs, lets take their income and give it to everyone else" is not only incredibly cold and selfish, but it is also a misguided and over correctional attempt for a perceived wrongdoing represented by the executives' high salaries. I'll say it again once more: many executives, especially of healthy companies, do much more work that the average American does not see. And it is this hard work, these weighty decisions, this forward thinking and progressive mindset towards growth for the entire company, that grants many (not all) executives salaries, though they are large, that are actually proportional to the work done and the value of the results of said work obtained by the company from the efforts of those executives.

Ok I'm done now.

[tw]

Originally Posted by Bullitt

One may look at the fact that he makes 6 times the average plant worker

Which means he is not relevant to this topic. When executives were properly compensated, it was 17 times the average employee's salary. Today executives reap 50, 300, and higher times that average. Where the company is not productive, that number is highest.

Working hard says nothing. Sculley did same hard work for Apple Computer. Therefore Apple went into major decline.

Executives do not oversee $multimillion operations. Executives provide attitude and knowledge for those who oversee those $millions. That actual overseeing of those $millions are by the salesmen, production people, human resources coordinators, and other smaller people who actually do the overseeing. That is where real talent lies in a productive company.

[Bullitt]

The "6 times" was off the top of my head, can't give you precise wage statistics because I don't work for them anymore I'm in college. But the fact remains that he makes many times more than the average employee, but he does the work and has the responsibilities to deserve high pay as such.

You can call him whatever you want, executive or not doesn't matter one lick to me. I used the term executive because it is often thrown out there as a blanket label of highly paid white-collar professionals. I know what his job entails and he is a key part of determining the direction of the company, directing people and resources, making decisions that greatly affect the future of the company, not some goofball salesman in a plaid suit pitching ideas to a board. That's the way this company is structured, he manages a number of salespeople, market research folks, product prototype developers, etc., and uses these resources in collusion with other "executives" or whatever you want to call them, to make decisions about how the company should be run and where it is going. The point is, he is an example of a white-collar worker whose salary, purely due to it's size, is something of a target by people with an obsession to demonize anyone associated with those at or near the top of a large company. Lower vs. higher class, haves and have not's, however one wants to phrase it that is how these people see this wage disparity and wish to impose artificial caps on large salaries just because they are large.

"Who cares about what it takes to steer the direction of an international, multimillion-dollar company, can't be as hard as those suits who are off in Cabo/Greece/Napa Valley say it is". These people don't fully appreciate the responsibility that comes with many higher positions in large companies like my father's, and thus large salaries, because they have been jaded by the "robber barons" of the past and the Fannie Mae's of today. Pick apart the details of what I'm saying as much as you want, but that's what it boils down to: an over generalization of white-collar workers in upper division, high paying positions within large companies that none of them deserve to make what they do.

Simple as that.

[tw]

Originally Posted by Bullitt

I know what his job entails and he is a key part of determining the direction of the company, directing people and resources, making decisions that greatly affect the future of the company, not some goofball salesman in a plaid suit pitching ideas to a board. That's the way this company is structured, he manages a number of salespeople, market research folks, product prototype developers, etc., and uses these resources in collusion with other "executives" or whatever you want to call them, to make decisions about how the company should be run and where it is going. The point is, he is an example of a white-collar worker whose salary, purely due to it's size, is something of a target by people with an obsession to demonize anyone associated with those at or near the top of a large company.

Which is why CEOs once earned a massive 17 times more than the average employee.

How did companies (ie Ford) get productive? 1981 Ford was taught by Deming that the executive's job is "attitude and knowledge". Not decision making. That means providing direction - the strategic objective - then spending time verifying that employees are properly managing the accounts and properly trained to do so.

How was pre-1981 Ford fixed? Ford went from 48 levels of management (all who worked very hard) to 5 levels. Suddenly employees were empowered to do their job - and therefore did work better. Suddenly bosses no longer made so many decisions. Suddenly bosses provided attitude and knowledge by working for the employees. Suddenly Ford went from record losses to record profits in nine years. Why? Executives were no longer so important. The "too many white collar" problem was diminished. What did change? Decisions were made at lower levels where decisions are best made by the little people.

Again - Apollo 13 - the hero was never the big executive. If top executives are making heroic decisions, then communism exists. The hero was the little guy who did not even have a name. Executives do not make success. Executives only make success possible. As a result, the CEO deserves a massive 17 times more money - and no more.

[sugarpop]

Originally Posted by Bullitt

... It would be extremely unfair to him to cut his salary just to diminish wage disparity. Of course a company should reward its employees generously, including everyone at the bottom. But I find fault in allowing that mindset to blind a person to the fact that many executives actually deserve high pay. Not all of course, there are many that will bleed a company dry for their own personal benefit and toss its employees around with no regard for their income needs. But not every executive is like that, and I object to any sweeping assertion that every executive in corporate America should have an artificial wage cap. My father may make almost 6 times what the average worker in the plant does, but he again earns every penny of it. To artificially deny him that fair compensation, dictated by the head of the company, is greed in the opposite direction. Greed by those who think his work is just making powerpoint presentations and playing golf all day. Greed by those who assume an executive's job is among the easiest professions in the world, and because of that executives owe everyone below them a piece of their salary pie. I assure you, there are highly paid executives of some companies that deserve the pay they are rewarded...

Bullitt, kudos to your dad. You said he earned 6x what the average employee earns. That is in no way out of balance. I'm talking about the executives that earn hundreds x more. On average, a CEO makes close to 500x more than what the average employee earns. THAT is what I'm talking about. By the standards that I would apply, your dad would probably earn more, not less.

And ftr, I am demonizing ALL executives. I am only demonizing the greedy ones.