LeX2K

BUYERS. The general public.

geko29

Except....CEOs of major firms like these DON'T pay themselves. Executive compensation is set by the finance committee of the board of directors. They pay what they feel they need to in order to attract and retain the specific talent that they believe will drive results. Same as any job.

My company's recently-retired CEO had $14M in total comp in his final year. But only $450k of that was salary. The overwhelming majority was performance-based pay such as Incentive Stock Options--which expire worthless if you don't drive company success. Since our revenue more than tripled under his leadership (just under 10 years), I'd say he earned his way, and I don't begrudge him the high pricetag.

LeX2K

Not every company is structured this way (for example at my old job).

SW17LS

At your old company the CEO was the owner/founder then and the company was privately held. CEOs work for the company, no employee of a company chooses their own pay. Compensation is always directed by the BOD.

LeX2K

Yes
Is it fair to say the BOD and the CEO are free to set a salary as they see fit within the bounds of the law?

Not that is matters for this discussion, Mary Barra's salary is what 0.02% of company profit? I don't know the exact figure but it's too small to matter.

RNM GS3

The stock options are a poor way to drive results imo as they encourage short term results and buy back of shares. There should be performance metrics that company has to hit for CEO bonuses i.e. Revenue targets, employee retention/satisfaction, profitability growth, new product development etc.

There also should be direct correlation between increases for CEO compensation and average workers for publicly traded companies.

The stagnant wages for past 40-50yrs in US are just not sustainable and will ultimately hurt the overall economy if there is no middle class.

SW17LS

The BOD can set whatever salary they want and think will attract the talent they want. CEO is never going to set their own salary unless they own the company.

I completely agree with you, executive compensation isn’t an issue here.

Stagnant wage growth however like RNM said is a huge issue.

Margate330

Me either.

These are the kind of people that can start their own multi million dollar company.

If you want the talent, have to pay up. IMO

mmarshall

The strike at the Wayne, MI Ford plant, where Rangers and Broncos are built, means that a friend of mine may have to wait a while longer for a new 2024 Ranger Raptor he's recently ordered from that plant. I still support the strike, though.....and I would feel the same way if I myself had ordered a new truck from that plant.

mmarshall

You're putting the cart before the horse. Companies can't sell things to the public if workers don't produce them. Any way you look at it, workers are the backbone of the American economy.

SW17LS

And workers can't produce them if executives haven't designed and marketed a product that consumers want to buy. Companies can easily produce products overseas for less cost.

Workers aren't the backbone of the American economy anymore.

mmarshall

They're still the backbone for products manufactured here. And, vehicles that are built here do not have to be ferried across the ocean in container-ships like vehicles made in China or Korea...that eliminates one major expense with them.

SW17LS

The savings on labor is so huge that shipping them here is a small price to pay.

The American economy is simply not a manufacturing economy anymore, and it becomes less so year after year.

For example, the UAW strike reduces the likelihood I will buy a Grand Cherokee, because it will reduce the rollout of 2024 models and finding a 2023 that has the equipment I want is difficult.

mmarshall

Huge expansion of the strike just announced......from 3 plants to 38 different GM and Stellantis plants. They are giving Ford a break right now, and not targeting any more Ford plants, because Ford has shown more willingness to negotiate than the others.


https://apnews.com/article/uaw-ford-...5af480d6fafa98

situman

Well we had a financial crisis where people simply stopped buying cars. Automakers like Ford and GM can no longer support the expense structure they were saddled with by the unions. Imagine every car you sell, part of the revenue goes to people that is retired? As in you literally pay someone to not work. They had two choices back then. File for bankruptcy and lay off everyone or keep as many people employed as possible. I think the latter worked out pretty well no?