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The reported compensation is before taxes, so this comment is nonsense.
If anything, lower tax rates would tend to reduce compensation since the employee gets to keep more of what they earn, and therefore would be willing to accept any given job at a lower gross salary.
This is circular logic. What you are saying is that CEO's pay themselves less than they might when tax rates were higher?
Sorry, but the facts do not support your assertion. You can start your research HERE
Think about it for a minute. Let's say you made 100,000 per year as a CEO in 1950, good money back then. Depending upon the number of tax brackets and the width of each, as much as 90,000 might be taxed at the highest bracket, meaning that 81,000 is handed over to the government. (yes I know there are deductions and such, but I'm keeping things simple so you understand the principle.)
Therefore you take a lower salary, and keep more money in the business, because it does you little good to be highly paid when 90% of your pay is taxed away.
But when lower marginal rates occurred, it becomes more worthwhile to pay yourself more, because less of the money received is taxed away.
We began seeing the real upsurge in CEO pay during the Reagan Administration, when the highest rate fell from 72% (IIRC) to 50%. That is an historical fact.
And the CEO pay continued to surge in the Bush Jr Administration when the highest rate fell to 36% or so.
That is basic human behavior. When rates are high, you take less pay because it does no good to pay yourself more - the government ends up getting most of it. When rates are reduced, you pay yourself more because because you can keep more of it.
One reason for the huge percentage in compensation (different than pay) in stock options for CEO's is that the capital gains tax of 35% applies, and this rate is lower than the marginal rate of 36% on salary. In the 80's the cap gains tax was also at 35% and the marginal rate for pay was 50% so there even more of an incentive. Also, IIRC stock options are not taxable as income until they are exercised, IIRC.
Another area of interest with this argument is in our Federal Government. There's a blank check for them to continually write themselves more and more pay and vacations and less workload. So I would argue that the public sector mirrors the private sector in many ways when it comes to the rich getting richer.
For example, look at the Veteran's Administration. Top people get bonuses? A bonus is something paid to all employees of the company as a reward for their part in helping to create profits and prosperity for that company.
By definition, government cannot and does not create profits and prosperity for itself. Besides, whatever happened to getting paid to do your job?
Um...don't the Board of Directors determine the pay?
Moderator cut: against Great Debates guidelines Boards are usually made up of the major shareholders or their proxies. Also, one doesn't need to be on the Board of Directors to influence a company's decision making, see Carl Icahn.
For example, look at the Veteran's Administration. Top people get bonuses? A bonus is something paid to all employees of the company as a reward for their part in helping to create profits and prosperity for that company.
By definition, government cannot and does not create profits and prosperity for itself. Besides, whatever happened to getting paid to do your job?
Just about every large government agency is guilty at some point of holding a "Convention" somewhere that includes lavish hotel rooms is a vacation city and meals etc all paid for by tax payers. I have yet to see any legislation put into place to check these spending sprees down a bit, or eliminate them altogether. This to me is just a criminal as a CEO wanting to give himself a raise, or fly in a corporate jet for instance.
If you want CEO pay, simple, become a CEO. Ah, suddenly things aren't so easy right?
In the USA, anyone can become a CEO and anyone can become wealthy, that is a fact. Start your own business, it can be done with a single dollar.
The problem with people complaining about compensation is that complaining is easy, doing something to better yourself, create a market for your services is a bit more difficult.
Anyone can start a business, anyone. Then make yourself CEO and create as much wealth as you want. The trick is having the skills, knowledge and attitude necessary to do that. That however, isn't anyone else's problem, it is your own and if you can't figure out how to do that, it is simply too bad, life isn't fair and not everyone is equal in capability. Everyone does however, have the same equal opportunity as everyone else and if you don't think so, you've already created your own barrier to success.
What about the group of investigative journalists who found that most CEOs, government officials, bankers, etc have been hiding their money overseas. So basically they are taking billions in tax breaks, not paying taxes at all, hiding assets, then blaming the guy making $7 who is a taxes at a higher percentage than any of them.
If you want CEO pay, simple, become a CEO. Ah, suddenly things aren't so easy right?
In the USA, anyone can become a CEO and anyone can become wealthy, that is a fact. Start your own business, it can be done with a single dollar.
The problem with people complaining about compensation is that complaining is easy, doing something to better yourself, create a market for your services is a bit more difficult.
Anyone can start a business, anyone. Then make yourself CEO and create as much wealth as you want. The trick is having the skills, knowledge and attitude necessary to do that. That however, isn't anyone else's problem, it is your own and if you can't figure out how to do that, it is simply too bad, life isn't fair and not everyone is equal in capability. Everyone does however, have the same equal opportunity as everyone else and if you don't think so, you've already created your own barrier to success.
If you're in a footrace with someone who starts off half the distance to the finish line, would you say you had equal opportunity to win the race because either of you could win if you ran fast enough?
For example, look at the Veteran's Administration. Top people get bonuses? A bonus is something paid to all employees of the company as a reward for their part in helping to create profits and prosperity for that company.
By definition, government cannot and does not create profits and prosperity for itself. Besides, whatever happened to getting paid to do your job?
Bonuses are part of the compensation given. When applying for a position, bonuses are part of the total compensation package that a person expects to receive. So receiving a bonus is part of the total compensation awarded.
Unlike salary and some benefits like medical, the bonuses along with benefits like student loan repayment and transportation subsidy are contingent on agency funding. So an agency can not pay out any bonus if there are no funds.
The bonus is suppose to be performance based, thus someone with low performance gets none, someone with outstanding performance may get 5%. However, as we see, it does not always work this way. It does not always work this way in the private sector either.
people are worth whatever people are willing to pay them
i see CEO 2 ways
you have the type that is some dude that was appointed to that position...some knew all the right people and made it to that job somehow, some are useless and destroys companies and still gets millions of dollars. of course i';m not happy when someone making enormous amounts of money who destroys companies and still gets bonuses and whatnot
the other ceo is someone that starts a business and becomes quite successful and one day is able to make alot of money and become filthy rich... why one earth would anyone begrudge this person and why would there even need to be a comparison of what they make vs. the janitor or secretary or other "average worker"
like i said, if someone wants to pay me millions whether i do a good job or not then i am worth the money
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