Should the government demand more of corporations?

Question

In my opinion, a coporation is essentially the government excusing a business owner of legal and financial responsibility for the actions of their business. It is essentially Governmental insurance.

I can understand why the government would want to offer the ability to incorporate --- to spur people to creat business that employ it's people --- but shouldn't the government demand certain things in return for this golden dome of protection?

Things I'd like to see:

1) limits to how much an employee of a corporation can make. Not hard limits like "10 M annually" but multipliers, like no more than 300x your lowest paid employee or 15 x your lowest paid contractor.

So Walmart who's lowest paid employee makes say $8 an hour = ~16K a year, could only play their top execs 4.8M a year. If the top execs want a raise, they have to pay their working stiffs more.

2) No more than 30% of your hired or contracted workforce can be foreign.

Opinions?

I am dissappointed with the lack of detail to some answers, but I have no problem with people disagreeing. The crux of the question should be addressed though, "Since the government is giving something of potentially great value away, shouldn't it require at least minimal returns?"

I think corporate employees don't "deserve" anything for climbing the ranks; Sole Propriators do. Sole Proprietors risk everything to make businesses that create jobs and wealth. Corporate Employees profit off others hard work and risks. I have no problem with them, but I don't see any reason the government should be underwriting the salaries of people who risk nothing to generate American wealth.

IMO, if you want to make unlimited weath, take a risk. If you want the government to cover all of your risks, you should deal with accepting govenmental regulation.

"150X" not "15X" = typo.

A lot of clever people with good answers, keep them coming!!!

I do wonder how a Corporation is considered "free enterprise" or "private enterprise". To me a Sole Proprietorship is free enterprise, because in that form you are talking about an individual doing it on his or her own, not with the government offering corporate protection from being individually sued. (If Corps offer no benefits, why incorporate? :))

America has a ton of socialistic ideas already. It always has been a society that mixes the best of both philosophies. Public roads. Public Schools. On and on. To suggest I am suggesting something unamerican is just not very honest.

The idea that government actions have to impede productivity is hard to accept. Does the Fed lowering the interest rate cause businesses to fail? Does goverment military spending hurt? Even restrictions often give birth to industries to address them. A lot of govermental "interference" generates income specifically for American citizens.

I think ONE of the end results of this would be to spur upper management at a lot of companies to start their own businesses where they could make more. I don't have much problem with anything that spurs the creation of new businesses.

Greenspan in his book talks about the destructive power of free enterprise raising inefficient businesses and new more efficient businesses hiring the defunct businesses' employees. I wonder how much of this is being stunted by corporations ability to buy votes and impliment laws to block competition. I haven't dealt with that in this, but I think the increased competition that would likely arise would be one way to get the US back on a more competitive track.

J-P -- A very insightful post. Thank you!

Answer 1

Is this how you propose to let freedom ring?

EDIT: How can you insist on details and specifics when your question is devoid of them. Are you referring to private corporations, not-for-profit (i.e.501C3) corporations, publicly traded corporations, S-Corps, C-Corps or some other kind of corporation known only to you?

What you describe in "your opinion" has no resemblance to any corporate structure or entity I am aware of. I've owned several and own two corporations now. I have no "government insurance" nor am I excused from any legal or financial responsibility for my actions or the actions of my corporation!

You want a detail, I'll give you one... put down the bong for an hour or so and try to focus. The opinions you're putting forward are "pipe dreams". I'm sure you'll get other America haters and dopers to agree with you about taking stuff away from corporations. It's called socialism. Look to current day China as an example!

That detailed enough for you???

Answer 2

The biggest problem with your plan,

Is it leaves out the size of the corporation.

So a company with 20 employees, with the lowest paid making $8.00 an hour, the CEO can make 4.8 mill a year.

But the company With 300,000 employees, with the lowest earner making $8.00 an hour, then the CEO, can still only make 4.8 mill a year.

There is a huge difference from running a 20 person company, to running a 300,000 person company.

And why should the federal government regulate what someone can be paid ?

Would you want the government, to tell you, that your over paid, and force you to take a pay cut ?

I don't think so.

And again, not all corporations have the same margins of profit, on what they manufacture.

So you would be penalizing, the ceo's of manufactures who produce lo margin items, like clothing,consumer electronics etc.

Answer 3

In grade school, high school and college, athletes make nothing, but if they are at the top of their game they might go onto professional sports and make several million a year, for playing a game. That's not really hard work, a lot of it has to do with naturally having a body that's capable of doing it. But that's why they get paid so much: because they are at the top of their game.

A lot of CEOs feel the same way, they want celebrity status through education. They work hard for many years, and they want to keep moving up in payroll. So who are you to cap their salaries? If you do that you only take away incentive for them to keep wanting to move up. Why would you put a ceiling on what a company is willing to pay a CEO or other upper level management? Why would you declare an ending point? Why would CEOs or upper management work any harder if they've already topped out what they can make? What they would do is squeeze whatever perks they could out of the company to make whatever money they otherwise would have had their been no cap in place.

I do think that many CEOs are overpaid and they under perform, but the shareholders can ditch that CEO at will, and they occasionally do. Bush did have a talk with many Fortune 500 CEOs concerning lavish salaries, but they didn't want to hear him talking about voluntary salary caps.

Answer 4

I agree with you 100%. Corporations and executives take and take and take.

Don't give me that guff about how executives "worked" and "went to school" to get where they are. Most of them got into top schools because that's where their daddies went, and they got good jobs right out of school when their daddies pulled strings for them. It's called "the old boys network" and it's affirmative action for rich white males. Executives don't really "work" once they're on the job, either. All they do is play golf and eat lunch at restaurants, under the pretense of "making deals" or "making decisions." The only way they ever make money for a company is by doing things that hurt the employees and hurt the customers.

And corporations have WAY too many rights. Yes, they're legally considered a person. Well, any individual person who behaved like the average corporation would be rotting in jail for the rest of his natural life.

If you want power and money, etc., it's only fair that some pretty heavy responsibilities go with it. Otherwise, you're getting a free ride on the backs of all the average people who work harder, longer hours for less pay and fewer benefits.

Answer 5

With imaginitive accounting, agencies be in a position to dream up suggestion on the thank you to get money to executives with the help of strategies the SEC and different companies can't save up with, because of the fact Congressional investment for enforcement is a comedian tale. The inventory marketplace is nearly a playing on line casino ... we attempt to take a place in agencies that have reliable ability ... a lot of human beings lose money. Are you announcing that the individuals who lose money there could be compensated with the help of the government putting a difficulty on the individuals who make money on the inventory marketplace? suitable now, a organization it somewhat is included in India could purchase a US organization and replace maximum of its paintings rigidity with human beings imported from India, on a similar time as a organization included interior the u . s . a . can deliver the paintings to Mexico or China. Any varieties of regulations that is imposed with the help of one u . s . a . on use of foreign places workers may well be declared to be in violation of international regulations with the help of the WTO ... i think of the challenge rather could be fairness, not quotas.

Answer 6

Government impedes productivity. It is not their place to regulate, mandate, nor impose anything on anyone. Do you drive a car? Do you eat fast food? Own an ipod? Play video games? Have any name brand clothing? To engage in anything predominantly America sounds like a direct conflict for your ideals because everything you do and your participation on yahoo answers is a direct accepting, involvement, and propagation of free-market, laissez-faire, good ol' American capitalism - products and consequences of a socioeconomic structure that was born of and grew out of freedom of markets. Keep government out of it!

Board of Directors and the stockholders can decide on how they wish to allocate salaries and pay grades. Private enterprise does this well enough on their own!

Happy Holidays!

Answer 7

I love reading questions from people who do not know how business works.

Look at it from the other side, if you got offered a job that paid 20 million or 30 million and say it is 1000 times what the average employee makes, would you turn it down? Judging by your question, it would be hypocritical of you to accept right?

Answer 8

I think I've read that Britain has a law like that. CEOs can only make 300 or so times more than their lowest payed employee. Or maybe it was another country.

Corporations are given many of the same rights of individuals. They should also be held to certain responsibilities.

Answer 9

i own a production company and i pay my employees what they deserve for the work they do and they love working for me , never ask for raises or complain about hours , i set it up so they get a cost of living increase every yr and they get bonuses for a job well done

Answer 10

If the "working stiffs" want better paying jobs they can go find one. They can go to a trade school or vocational school of some sort and learn how to do a trade. From there look into a better job. Or find a way to get into college, do whatever field they want, and go from there as well. There are many ways one can get better jobs, thing is, what are they going to do about it?

Why punish the top execs when many of them worked their way from the bottom up.