The twinkie thread

[j2k4]

Sorry if i'm ranting here...

No you aren't.

[IPD]

No you aren't.

no i'm not ranting, or no i'm not sorry?

[UTRacerX9]

The problem with going to a 50x rule (besides having to craft a law that is the equivalent of the government telling people how much they can make!) for top management is that most of the CEO's and board members aren't pulling in a huge salary, they make good money, but salary isn't the problem. The main problem is all the stock options, deferred payouts, and pension benefits they get. In most cases, that is what is truly excessive, the "golden parachute" type stuff, not annual salaries, and that would be extremely hard for any government regulator to keep track of, especially in the case of options where several years have to go by before they are allowed to be exercised.

[j2k4]

No you aren't.

no i'm not ranting, or no i'm not sorry?

You're always ranting, Thadd.

[green-lantern]

paul, that is why i favor the 50x rule and abolishing the minimum wage. 50x was the ratio of CEO/top-exec pay to the wages of the lowest-paid employees back as recently as 1980. Clearly it's not an unreasonable ratio for the top management. Recently though, the fortune 500 has been averaging 380x ratio:

Average Fortune 500 CEO Now Paid 380 Times As Much As The Average Worker | ThinkProgress

By eliminating minimum wage, you allow small businesses to pay virtually whatever wages they desire--because the Owner can't possibly be collecting 50x that in in annual income; but they still have to offer something of market-value, or no one will work for them. On the other hand, by tying total CEO compensation to 50x, any CEO who wants a raise has to improve the bottom line for his company employees. This means that Wal-Mart will have to pay more than $7.25/hr. if it wants to pay it's CEO over $725,000 in TOTAL compensation annually (2000 working hours). By contrast, Michael Duke took home over 18 MILLION last year--well over 20 times that amount.

Currently, the only "system" which maintains the 50x rule is the US government (at least theoretically), as the President's compensation is well below $725,000...even including his allowances.

Sorry if i'm ranting here, but to me these types of problems are very, very simple if we just eliminated the BS regulation and went with 50x. Max CEO pay on a grunt pay of 50k is 2.5 million annually. It's simple math, and there's relatively nothing left to quibble over. Superfluous funds either go towards employee benefits, infrastructure, or dividends.

/rant

Interesting, I honestly haven't heard of it....I don't think.

The problem with going to a 50x rule (besides having to craft a law that is the equivalent of the government telling people how much they can make!) for top management is that most of the CEO's and board members aren't pulling in a huge salary, they make good money, but salary isn't the problem. The main problem is all the stock options, deferred payouts, and pension benefits they get. In most cases, that is what is truly excessive, the "golden parachute" type stuff, not annual salaries, and that would be extremely hard for any government regulator to keep track of, especially in the case of options where several years have to go by before they are allowed to be exercised.

Good point

You're always ranting, Thadd.

and never sorry

[green-lantern]

Oh and I really don't care what they pay the CEO or whoever. I'm not one of these guys that cry about athletes getting paid more than teachers BUT it's hard to blame the union about closing the doors when you are saying you cant afford to say open after your 300% raise. I know why they did it but they can't say the union was the last nail in the coffin.

[IPD]

The problem with going to a 50x rule (besides having to craft a law that is the equivalent of the government telling people how much they can make!) for top management is that most of the CEO's and board members aren't pulling in a huge salary, they make good money, but salary isn't the problem. The main problem is all the stock options, deferred payouts, and pension benefits they get. In most cases, that is what is truly excessive, the "golden parachute" type stuff, not annual salaries, and that would be extremely hard for any government regulator to keep track of, especially in the case of options where several years have to go by before they are allowed to be exercised.

it all falls under compensation package. and i'm sure you aren't the only one who would be quick to voice dissent. besides, the government already tells people how much they can make; $7.25/hr. 50x just lets the free-market decide what is fair, rather than relying on arbitrary government numbers. it also gives economic incentive for companies to base employment in states where the economy is poorer, because wages are acceptably lower there. i'd expect WV--among others--to benefit greatly.

[NickS VR4]

Like I've said, and no one seems to address...

If the management bought new machines and replaced the ones from the "1920s", and combined shipments to allow wonderbread AND hostess snacks to ship on the same trucks... how many employees would be laid off, and would the unions allow that?

The upper management probably saw that the company was going down and then took it for all its worth.

Now I think the company will be bought, the new machines will be bought, the deliveries will be on the same trucks, and it will only require 1/2 the work force... becoming profitable. I think demand certainly wasn't growing for twinkies, but unions probably were preventing the restructuring (lay offs) and while not 100% at fault, they certainly hold some blame.

[UTRacerX9]

I think the spirit of the idea is good Thadd, in fact I've said in the past that the average CEO in the 60's and 70's followed this "50x rule" and our economy as a whole was a lot healthier. However... there was never actually a "rule" to begin with... that was just about the maximum of what constituted an acceptable salary for a CEO/Chairman. Unfortunately, greed has increased exponentially among those who can award themselves higher salaries over the past 30 years.

A good idea, but probably impossible to actually put into practice. If it could be done, I'd be all for it, but I don't think it's realistic.

[NickS VR4]

Btw, I think rather than limit CEO pay, raises in minimum wage may be better.