Why do CEOs in the US make 400% more than the average employee who can hardly afford a decent life?

Question

Shouldn't US based companies start considering out-sourcing their CEO's as they have done to many front-line jobs?

European and Asian CEOs make an average 60x more than their average employees, whereas their American (US) counterparts have to make 400% more is sound to you?....and outsourcing my job when and if congress passes that law?...they have already done that...slowly and on the sidelines.

That an athlete or an actor makes millions per gig is just due to the law of supply and demand. e.g. There is only one Brad Pitt, and Kobe Bryant's talent on the court remains unmatched.
Sure the CEOs job entails a great deal of stress, like you said, 4x as much as your average worker, but not 400 times, as the gap in pay reflects. Gone are the carefree days of making $20/hr for them, and replaced by their daily dosage of scotch. These feelings are surely not reserved for CEOs alone, many of us come home battling our own share of demons while trying to figure out how to make ends meet and how we will manage the coming weeks' expenses.

I beg to be corrected...I do mean 400 times.

Answer 1

we need to work together to stop the capitalist propaganda machine that feeds off the peoples wants, desires and lusts,..stop buying their product if it is not food, shelter, or basic necessities such as hygiene material and clothing,..watch all the mass produced goods sit idle in the warehouses and as the supply outweighs demand these unnecessary ceos will become obselete and compete for jobs that actually require a little blood, sweat and tears,..we need to march onto the governments steps and demand reforms,..but in a unified front,..look at history and how people in villages worked together for the prosperity of the village and put that into a modern context and take action,..should not the u s based employee start considering ways to level the field,..our current two party system of government is fundamentally flawed where the big company money makes policy as the two parties pander to the people and then do not follow through,..the government is supposed to work for the people,..it should be able to compete with foreign countries and the big corporate entities in providing for its citizenry,..

i e a e,..
unificationist,..

Answer 2

Because, without the people who actually co-ordinate, plan, and operate a business, there would -be- no business and the employee would have zero income.

And what makes you think that a CEO's job isn't 4 times as difficult and demanding as a line workers job? As one who has been there, I can tell you for a fact that there are days when it's nearly impossible to get home and not scream at the kids, backhand the ol' lady, and kick the dog. And when you're going through 3 or 4 bottles of Scotch a week, and you have to spend 20 minutes in the mirror every morning getting yourself 'psyched up' to go in to work, you start fondly remembering the 'good old days' when you were only making $20 an hour but you were enjoying it a helluva lot more.

And, if you want to b|tch about something, why is it that a professional sports player should make $120 million over a 5 year contract? Or an actor be paid $25 million to do a movie?

Doug

Answer 3

You need to so some research.

The Bureau of Labor Statistics reports the average annual wages in the U.S. as $36,764 for 2002. More recently, the White House reports that the average hourly earnings of nonsupervisory workers was $15.54 in March 2004. The White House also gets its information from the Bureau of Labor Statistics, which states that in that same month, the average wage for workers in the private sector was around $520 a week.

"Can't afford a decent life?" Hey, on $36k the family isn't sipping cocktails with John Kerry or visiting the Kennedy Compound, but if they manage their money they aren't starving.

CEO's don't get paid what they do because of the stress or the workload. There are single moms who have as much or more stress and work to do. What you get paid has little if any relationship to how hard you work. In the real world you get paid based on what sort of value you create for your employer.

CEOs get paid that much because of the responsibility of the postiton, and the value they create. Look at what Lee Iacocca did a Crysler, or Herb Kelleher did at Southwest, Steve Ballmer and Bill Gates did at Microsoft, or Lawrence J. Ellison did at Oracle. Those companies would not exist without those guys. That is why those guys get paid so much. They take home millions or hundreds of millions, but but they bring BILLIONS into the pockets of the company.

Despite the class warfare, envy the rich stuff you have been taught, a CEO who can run a company well is just as much in demand as a pro baseball player with .410 batting average, and just as rare. They don't sit around smoking cigars all day.

Jobs that don't require a lot of skill or education can be outsourced, or done by robots. CEO jobs do not fall into that category.

Are there bad CEOs? Yes. (Look at almost any airline except SWA). Are some overpayed... yes, look at t the New York Times stock price over the past 5 years.... their CEO should be fired.

But your question isn't based on reality, it is based on political slogans that just aren't true.

Answer 4

The job of the CEO is to make money for the stockholders, not the average employee. The pay of the CEO is set by the company board of directors which is a close knit group. I suggest outsourcing the Senate is a better choice as the immigration amnesty bill being discussed next week will drastically increase the average worker's taxes as he will have to pay for adding 12-20 million new low income social security and medicare beneficiaries. Also under this proposed law, these CEO's can select foreign employees from an international database to take your job and pay them less than you...

Answer 5

Here's an idea - if being a CEO is such a good deal, why don't you start your own company and become one? Or go to New York and see if any major company will hire you as one.

CEOs get the big money for the same reason film stars do - because they can. I wouldn't pay someone $18million to hit a ball around a park either, but they can command that type of salary because they have unique ablities. They all know they have unique skills that are in short supply and high demand.

Answer 6

because they can -many CEO start the companies that create wealth in communities and jobs- people make choices about how they work and what they do with those resources - yes there are bad apples -but there are many companies that have created millionaire employees- Microsoft, Dell, Starbucks, Apple - to name a few - when you look at other data you will find problems with people understanding and using their resources effectively - often living beyond their means through credit and not re-investing in themselves through education and training- or being aware that the world is dynamic economically and people must be flexible (the Average US citizen changes jobs/careers 5-7 time in their lifetime) 50% of the best jobs now will not exist in 15 years -they will be replaced by jobs and titles that don't even exist yet - people need to become proactive in their lives and not reactive - to do well - that's just not in the US

Answer 7

Sometimes they do actually deserve it. But when that CEO is running the company into the ground, and still getting a huge payoff, that's when it makes me sick.

BTW, did you mean 400 times the average employee's salary, because 400% isn't that big a deal, if you think about it.

Answer 8

Sven's got the idea!

You have to understand (and come to appreciate) what it takes to be a CEO in today business climate. You are risking your (and probably your entire family's) well-being on the decisions made by you and your team on a daily basis. There is a concept of risk-reward in America. Thanks to Enron and WorldCom, one slip-up by yourself or anyone that works for you amd the CEO is not only out of a job, but likely headed to prison.

I like your spirit, but think you should try seeing things from the other side of the fence.

Answer 9

Because CEOs create wealth.

Employees and CEOs cannot be compared to one another.

If an Employee doesn't like his or her situation, then the employee should start his or her own business and try creating wealth themselves.

The opportunities are boundless. Try it!

Answer 10

Capitalism puts buisnesses under private ownership. There is no law against an individual obtaining as many assets as they can.