Forbes - Shareholder economies create poverty

[AshG]

At McDonald's, for example, CEO Stephen Easterbrook's compensation was $21,761,052 last year, up from $15,355,746 in 2016 and $7,909,296 in 2015. According to the company's proxy statement, the median employee was a part-time restaurant crew worker in Poland who made $7,017. The ratio was 3,101 to 1. In other words, it would take that employee 3,101 years to match Easterbrook's 2017 compensation.

Last year the average S&P 500 CEO made 361 times more than the average U.S. worker. Compare that to pay ratios in Europe, where a CEO-equivalent in the U.K. makes 94 times the compensation of the average employ, and that's the high end. In Sweden, home to some large companies, the ratio is 40.

We do know that CEOs make a lot of money at publicly-held companies. Pay disclosure has been mandatory for many years. There are also multiple studies to show that corporate financial performance doesn't correlate to CEO pay. Pushing more money at the CEO, as we've learned time and again, doesn't mean the company will do better.

How Many Workers Must Live In Poverty For McDonald's CEO To Make $21.8 Million?

No, this is not a call for greater taxation or government redistribution of wealth. We can probably already think of a handful of posters who are probably going to crap all over this thread thinking its some liberal plea for redistribution of wealth. It's not. Watch them thread-crap anyway

America has thrived under several forms of capitalism during its existence. The two most prevalent forms have been shareholder capitalism and stakeholder capitalism.

Henry Ford is commonly thought of as the progenitor of stakeholder capitalism in the US. He believed that it was important to make a quality product that would encourage buyer loyalty and pair it with wages and benefits to ensure employee loyalty. Workers at Ford Automotive were paid enough to support their families and also own one of Henry Ford's cars, a luxury at the time. This was the type of economic framework our country thrived under and resulted in the expansive growth of the middle class and a clear path out of poverty for the most people.

We currently live under a predominantly shareholder system. Those who profit most from corporate earnings are not the workers, but those who had enough money to buy into partial ownership of the company. These people have little to no influence outside of their voting power on the day to day operations, yet profits are diverted from those who produce the product to increase the shareholders' return on investment. This system relies on cheap labor, cheaper production, and little regard for loyalty in either direction. It is under this system that the middle class has begun to shrink and the left has increased its cries for government involvement in the economy.

The economist describes a two-track economy with on the one hand 20 per cent of the population that is educated and enjoys good jobs and supportive social networks.

On the other hand, the remaining 80 per cent, he said, are part of the US’ low-wage sector, where the world of possibility has shrunk and people are burdened with debts and anxious about job security.

US has regressed to developing nation status, MIT economist warns

The question we should be asking is how to move out of shareholder capitalism and back towards stakeholder capitalism with as little government intervention as possible. Are we ok with an economic strategy that rewards those who can invest and punishes those who cannot? Is it not the most conservative thing to reward hard work and loyalty over grab-and-go proxy profiteering?

 

[McDad]

How Many Workers Must Live In Poverty For McDonald's CEO To Make $21.8 Million?

No, this is not a call for greater taxation or government redistribution of wealth. We can probably already think of a handful of posters who are probably going to crap all over this thread thinking its some liberal plea for redistribution of wealth. It's not. Watch them thread-crap anyway

America has thrived under several forms of capitalism during its existence. The two most prevalent forms have been shareholder capitalism and stakeholder capitalism.

Henry Ford is commonly thought of as the progenitor of stakeholder capitalism in the US. He believed that it was important to make a quality product that would encourage buyer loyalty and pair it with wages and benefits to ensure employee loyalty. Workers at Ford Automotive were paid enough to support their families and also own one of Henry Ford's cars, a luxury at the time. This was the type of economic framework our country thrived under and resulted in the expansive growth of the middle class and a clear path out of poverty for the most people.

We currently live under a predominantly shareholder system. Those who profit most from corporate earnings are not the workers, but those who had enough money to buy into partial ownership of the company. These people have little to no influence outside of their voting power on the day to day operations, yet profits are diverted from those who produce the product to increase the shareholders' return on investment. This system relies on cheap labor, cheaper production, and little regard for loyalty in either direction. It is under this system that the middle class has begun to shrink and the left has increased its cries for government involvement in the economy.



US has regressed to developing nation status, MIT economist warns

The question we should be asking is how to move out of shareholder capitalism and back towards stakeholder capitalism with as little government intervention as possible. Are we ok with an economic strategy that rewards those who can invest and punishes those who cannot? Is it not the most conservative thing to reward hard work and loyalty over grab-and-go proxy profiteering?

If "stakeholder capitalism" is better, it will win out. No need to muddle with the evolutionary path.

 

[AshG]

If "stakeholder capitalism" is better, it will win out. No need to muddle with the evolutionary path.

Better for who, though?

 

[McDad]

Better for who, though?

Those who participate in the market as employees, employers, and consumers.

 

[DancingOutlaw]

So if we said the CEO “deserves” $1M, and we give the rest to the 235,000 other employees, they would all get a life changing $88 a year. That’ll fix it.

 

[McDad]

So if we said the CEO “deserves” $1M, and we give the rest to the 235,000 other employees, they would all get a life changing $88 a year. That’ll fix it.

I think AshG's message is that all executives would scale back proportionally this providing more for employees. He may also want to do away with investing / dividends which would also increase wages slightly.

 

[SpaceCoastVol]

I think AshG's message is that all executives would scale back proportionally this providing more for employees. He may also want to do away with investing / dividends which would also increase wages slightly.

However, as an 'owner' of several companies, I would like to receive a return on my investment in the company. I like my dividends.

Also, Henry Ford could afford to pay better wages and benefits in the day because his competition was... well, God because He made horses and Americans wanted gas burning cars. I highly doubt that Mr Ford would be doing the same thing today when he is being outbid by Mexican autoworkers making pennies on the dollar by comparison to US workers. The article is typical wealth envy, although I do agree that C suite pay is out of whack. However, doing something about it will have zero effect on the hourly workers' pay and bennies.

 

[McDad]

This nugget:
"Henry Ford is commonly thought of as the progenitor of stakeholder capitalism in the US. He believed that it was important to make a quality product that would encourage buyer loyalty and pair it with wages and benefits to ensure employee loyalty."

I've heard this is revisionist PR by FMC to clean up Henry's legacy. I heard he was forced to provide higher wages to get folks off the farm to work in his horrible factories.

 

[McDad]

However, as an 'owner' of several companies, I would like to receive a return on my investment in the company. I like my dividends.

Agreed. You should.

McDonald's employees need to move to other more lucrative employment opportunities.

 

[1972 Grad]

So if we said the CEO “deserves” $1M, and we give the rest to the 235,000 other employees, they would all get a life changing $88 a year. That’ll fix it.

It's even better than that. McDonald's has 35,000 locations in over 100 countries, and 1,900,000 employees. Give the head guy one million, and distribute the other $20.9 million to the remaining 1.9 million employees, and they get $11 more every year. That amounts to 1/2 cent per hour raise for each person, based on a 40 hour work week.

 

[McDad]

It's even better than that. McDonald's has 35,000 locations in over 100 countries, and 1,900,000 employees. Give the head guy one million, and distribute the other $20.9 million to the remaining 1.9 million employees, and they get $11 more every year. That amounts to 1/2 cent per hour raise for each person, based on a 40 hour work week.

Lol. And there will be much rejoicing by employees.

 

[NorthDallas40]

Better for who, though?

Those who actually own the company.

Ford was a visionary and a maverick. It’s really hard to use him as the bar. He was also isolationist and naive on world politics but that’s a different debate. I honestly believe the shareholders of FMC would throw him to the curb in today’s environment.

Public companies answer really to one group. Their share holders. That’s the rub. If you want business owners to rule absolutely then they have to be private.

 

[AshG]

I think AshG's message is that all executives would scale back proportionally this providing more for employees. He may also want to do away with investing / dividends which would also increase wages slightly.

I don't know what my preferred solution is, hence the questioning nature of the post. Discussion is good (well, most of the time; just don't go in any thread about Trump if you want intelligent discourse).

We talk like it's easy to just wave goodbye to McDonald's and walk right into a better job. I wish that was the case, but so much of it depends on geography and portability. Even McDonald's own budgeting guide for its employees recommended getting a second job.

 

[GoVolsDR]

How Many Workers Must Live In Poverty For McDonald's CEO To Make $21.8 Million?

No, this is not a call for greater taxation or government redistribution of wealth. We can probably already think of a handful of posters who are probably going to crap all over this thread thinking its some liberal plea for redistribution of wealth. It's not. Watch them thread-crap anyway

America has thrived under several forms of capitalism during its existence. The two most prevalent forms have been shareholder capitalism and stakeholder capitalism.

Henry Ford is commonly thought of as the progenitor of stakeholder capitalism in the US. He believed that it was important to make a quality product that would encourage buyer loyalty and pair it with wages and benefits to ensure employee loyalty. Workers at Ford Automotive were paid enough to support their families and also own one of Henry Ford's cars, a luxury at the time. This was the type of economic framework our country thrived under and resulted in the expansive growth of the middle class and a clear path out of poverty for the most people.

We currently live under a predominantly shareholder system. Those who profit most from corporate earnings are not the workers, but those who had enough money to buy into partial ownership of the company. These people have little to no influence outside of their voting power on the day to day operations, yet profits are diverted from those who produce the product to increase the shareholders' return on investment. This system relies on cheap labor, cheaper production, and little regard for loyalty in either direction. It is under this system that the middle class has begun to shrink and the left has increased its cries for government involvement in the economy.



US has regressed to developing nation status, MIT economist warns

The question we should be asking is how to move out of shareholder capitalism and back towards stakeholder capitalism with as little government intervention as possible. Are we ok with an economic strategy that rewards those who can invest and punishes those who cannot? Is it not the most conservative thing to reward hard work and loyalty over grab-and-go proxy profiteering?

$21.8 million is literally a drop in the bucket when you look at the value created by a CEO's leadership. Just in Q1 alone, over $2.5 billion was returned to shareholders in stock buybacks and dividends. That's the value that a CEO brings to a publicly traded company.

Now quantify the value that a part time crew member in Poland brings. Now you have your answer on the disparity in compensation.

 

[NorthDallas40]

I don't know what my preferred solution is, hence the questioning nature of the post. Discussion is good (well, most of the time; just don't go in any thread about Trump if you want intelligent discourse).

We talk like it's easy to just wave goodbye to McDonald's and walk right into a better job. I wish that was the case, but so much of it depends on geography and portability. Even McDonald's own budgeting guide for its employees recommended getting a second job.

Have you looked at the educational assistance MacDonalds provides to their employees? I’d argue they know exactly where their jobs fit in the grand scheme and gladly help their employees find better careers where it makes more sense.

McDonald's Triples Crew Tuition Assistance for Restaurant Employees, Lowers Eligibility Requirement to 90 Days | McDonald's Corporation

 

[LouderVol]

How Many Workers Must Live In Poverty For McDonald's CEO To Make $21.8 Million?

No, this is not a call for greater taxation or government redistribution of wealth. We can probably already think of a handful of posters who are probably going to crap all over this thread thinking its some liberal plea for redistribution of wealth. It's not. Watch them thread-crap anyway

America has thrived under several forms of capitalism during its existence. The two most prevalent forms have been shareholder capitalism and stakeholder capitalism.

Henry Ford is commonly thought of as the progenitor of stakeholder capitalism in the US. He believed that it was important to make a quality product that would encourage buyer loyalty and pair it with wages and benefits to ensure employee loyalty. Workers at Ford Automotive were paid enough to support their families and also own one of Henry Ford's cars, a luxury at the time. This was the type of economic framework our country thrived under and resulted in the expansive growth of the middle class and a clear path out of poverty for the most people.

We currently live under a predominantly shareholder system. Those who profit most from corporate earnings are not the workers, but those who had enough money to buy into partial ownership of the company. These people have little to no influence outside of their voting power on the day to day operations, yet profits are diverted from those who produce the product to increase the shareholders' return on investment. This system relies on cheap labor, cheaper production, and little regard for loyalty in either direction. It is under this system that the middle class has begun to shrink and the left has increased its cries for government involvement in the economy.



US has regressed to developing nation status, MIT economist warns

The question we should be asking is how to move out of shareholder capitalism and back towards stakeholder capitalism with as little government intervention as possible. Are we ok with an economic strategy that rewards those who can invest and punishes those who cannot? Is it not the most conservative thing to reward hard work and loyalty over grab-and-go proxy profiteering?

what is this thread then if it isn't bashing the current system and looking to redistribute wealth?

and as 72 pointed out, what the CEO makes largely doesn't effect what the average employee makes. even taking the 20 million and dividing it over the 35000 stores would be less than 600 bucks a store. wouldnt really be an investment back in the workforce at that rate.

 

[McDad]

I don't know what my preferred solution is, hence the questioning nature of the post. Discussion is good (well, most of the time; just don't go in any thread about Trump if you want intelligent discourse).

We talk like it's easy to just wave goodbye to McDonald's and walk right into a better job. I wish that was the case, but so much of it depends on geography and portability. Even McDonald's own budgeting guide for its employees recommended getting a second job.

The balance point on the human resource side is at some point of increased wages, humans are replaced by machines. I favor that FTR.

Unless we want modern day Luddites, the employees who have difficulty finding other work for the reasons you mentioned are forced out of a job once replaced by automation.

 

[Septic]

Those who actually own the company.

Ford was a visionary and a maverick. It’s really hard to use him as the bar. He was also isolationist and naive on world politics but that’s a different debate. I honestly believe the shareholders of FMC would throw him to the curb in today’s environment.

Public companies answer really to one group. Their share holders. That’s the rub. If you want business owners to rule absolutely then they have to be private.

Side note: If you're going to talk about Ford's worldview, he was a radical antisemite that almost certainly sympathized with the Nazi's. Hitler was a big fan.

 

[McDad]

Side note: If you're going to talk about Ford's worldview, he was a radical antisemite that almost certainly sympathized with the Nazi's. Hitler was a big fan.

Hence his legacy repair by Ford Corp.

 

[LouderVol]

The balance point on the human resource side is at some point of increased wages, humans are replaced by machines. I favor that FTR.

Unless we want modern day Luddites, the employees who have difficulty finding other work for the reasons you mentioned are forced out of a job once replaced by automation.

funnily enough as much as they bring up Ford for paying people good money he was also replacing jobs with machines and efficiency. calling up the ghost of Ford won't help the minimum wage earner.

 

[NorthDallas40]

Side note: If you're going to talk about Ford's worldview, he was a radical antisemite that almost certainly sympathized with the Nazi's. Hitler was a big fan.

Yep. I was eluding to that. He truly was visionary in his manufacturing methods. He owes a good deal of the early car design success to the Dodge brothers but his manufacturing line concept was pure innovation.

Edsel tried to move the company forward and worked diligently to bring FMCs vast capabilities to bear in WWII despite Henry’s views. I wonder where the company would have gone had he lived longer.

 

[McDad]

Yep. I was eluding to that. He truly was visionary in his manufacturing methods. He owes a good deal of the early car design success to the Dodge brothers but his manufacturing line concept was pure innovation.

Edsel tried to move the company forward and worked diligently to bring FMCs vast capabilities to bear in WWII despite Henry’s views. I wonder where the company would have gone had he lived longer.

Alluding.

*hat tip to '72.

 

[NorthDallas40]

Alluding.

*hat tip to '72.

Lol... fine.

 

[McDad]

funnily enough as much as they bring up Ford for paying people good money he was also replacing jobs with machines and efficiency. calling up the ghost of Ford won't help the minimum wage earner.

Very true.

I've been thinking about pizza chains lately. Overhead is about 90%. Pizza sizes are relatively uniform and toppings are limited. Oven cooks on conveyor.

Some smart cookie should invent an automated pizza store. Assembly line pizza production with a robot and minimum employees.

 

[TheDeeble]

I think AshG's message is that all executives would scale back proportionally this providing more for employees. He may also want to do away with investing / dividends which would also increase wages slightly.

This is their goal. They just haven't stated it publicly.

Earnings caps for executive/mgmt compensation. "You make too much money. You already make "x" dollars. You don't need more than that." It sounds like something Bernie would say.

They've failed to redistribute wealth after the money has been paid out, so they'll eventually just try to take it before it goes to anyone that works above hourly paid status.