As a CEO id be stupid to get a salary. Dividends and stocks are much better tax-wise. Well maybe id get a smaller salary for the advantages in retirement and tax-free accounts and everything, but not much more than whats needed.
Stock grants are taxed as regular income.
Edit: downvotes from people who have no idea how stock, compensation, or taxes work, apparently.
I thought founders usually get all their shares upon founding the company when it’s worth next to nothing. Is that not how it works?
Yeah people don’t seem to understand taxes wrt stock at all. RSUs are definitely taxed!
Only thing I can think of is they’re thinking of options? Afaik those can be advantageous, tax-wise, because you are taxed when you exercise, not when they’re granted or when they vest (this is my understanding — I could be wrong).
Low res graphic
This isn’t a useful metric as it’s obviously bad for retail and service industries, and good for tech simply because of their business models. The median wages are really high when you outsource most of your labor and your actual “employees” are a handful of high level engineers. Spectrum for insurance is scummy but you can’t just hire people in China to do service calls or upkeep infrastructure, ya know?
Also it doesn’t include ownership. 1:1 with AirBnb is misleading for instance as it’s probably mostly their execs on the team and their compensation is in stake at the company. Their business model also counts everyone as contractors, so there’s that too.
Shouldn’t it be no more than ten or something?
Savateev suggests(for director to teacher pay ratio in his education system reform), if I remember correctly, no more than 3 times lowest paid worker in top 80% of highest-paid workers.
He is a mathematician and a youtuber(lectures, solving math problems). He is, uh, not without quirks: says he is religious and says that he thinks current goverment is able to reform education. Either because he doesn’t want to fall from window or because he really thinks so.
You probably won’t find many references to him on english-speaking sites.
The ratio between lowest paid and highest paid employee, in all forms of payment and benefits, to all employees (including contractors), should be capped. I’m thinking a ratio somewhere around 1:5 or so.
Have an employee paid only 20k per year? Congrats on your 100k salary Mr. CEO.
I think 5 is maybe an over-ambitious goal.
I don’t really mind a 50:1 cap, or even a 100:1 cap. I can understand how experienced leadership of a large scale multinational corporation should be compensated more than 5x the amount of a 16 year old part time cashier in a town of 2200 people.
Even think about it from an age demographic/experience point of view. How much more should someone make doing the same job for 40 years than the new hire with no experience? In a lot of fields, I don’t feel like it would be unfair for that scale to go 4:1. Now factor that into the consideration of the varying different positions, the ratio has got to be higher.
And in the face of abhorrent 2100:1 ratios, I think a 100:1 ratio is low enough to make a meaningful difference and high enough that no one can sensibly argue against it.
I think 5 is maybe an over-ambitious goal.
Maybe, but I’m OK with being ambitious.
I can understand how experienced leadership of a large scale multinational corporation should be compensated more than 5x the amount of a 16 year old part time cashier in a town of 2200 people.
I can’t. Large scale multination corporations shouldn’t exist. But that’s a separate issue ultimately.
How much more should someone make doing the same job for 40 years than the new hire with no experience? In a lot of fields, I don’t feel like it would be unfair for that scale to go 4:1.
A company hiring somebody with 40 years of experience should be paying towards the higher end of the 1:5 ratio. It would ensure far more of the wealth goes to those who actually provide value.
Agreed. Btw it is “paid”. “Payed” is a different word entirely. English is weird.
to all employees (including contractors)
Might aswell just make it a multiple of the minimum wage, because somewhere in the chain there will always be someone scrubbing toilets earning next to nothing. Or you end up incentivizing complex structures that try to avoid this cap somehow.
That said i don’t think this is the right solution anyways, since it only targets income and not wealth. As long as profit gets made it has to end up somewhere. And i feel like it is much more likely to end up in the owners pockets, than resulting in higher wages. It’s similar to how the salaries of successful actors/athletes are obscene, but the alternative would be that the studio/club just makes more profit.
So the more important issue would be to improve mechanisms that redistribute money, from whereever large amounts of wealth accumulate. Like a wealth tax or higher inheritance taxes (or just closing all loopholes that help avoid/reduce it).
However i would definitely also support a higher maximum taxation rate for the super high earners.
Or you end up incentivizing complex structures that try to avoid this cap somehow.
They already do that with hiring employees as contractors, which is why I mentioned it. Any employee they hire gets counted.
That said i don’t think this is the right solution anyways, since it only targets income and not wealth.
Hence why I said payment in any form. That includes benefits, PTO, stocks, everything. The rich still have other shenanigans they pull, sure. But this would at least solve the problem on a salary level.
And i feel like it is much more likely to end up in the owners pockets, than resulting in higher wages.
Agreed, which is why the stock market needs to end. It’s the primary means by which they rob the working class.
So the more important issue would be to improve mechanisms that redistribute money, from whereever large amounts of wealth accumulate. Like a wealth tax or higher inheritance taxes (or just closing all loopholes that help avoid/reduce it).
I’d recommend looking into a land value tax system.
The government could incentivize this by a tax formula. Highest paid employee divided by lowest paid employee sets the payroll tax rate for the whole business.
They could, but a lot of idiot children decided not to support the party that would have done that because unnamed randos on the interwebs told them not to. So that’s not going to happen. Again.
Not sure exactly which country you’re referring to, but in the USA the Democratic Party absolutely would not do that, which is precisely why they lost. If they had accepted the popularity of Bernie Sanders in 2016, maybe. But the party decided not to go that direction.
Their next presidential nominee is probably Gavin Newsom, who grew up in private school and best friends with Oil money billionaires - the Getty family.