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Comment by gretch | Hacker News Reader

I support the workers' decision and negotiating on labor rates is the basis of our economic system. Get what you deserve.

That said, the CEO pay is easily explainable:

> Profits at the struck auto companies increased 92% from 2013 to 2022, totaling $250 billion, according to EPI

> CEO pay at the Big Three has grown 40% in the last decade, according to EPI

If you're the CEO of a company and you increased profits by 92%, I don't know seems pretty fair to me. There's a lot of other businesses that suck and haven't raised their profits in the meanwhile.

I think talking about the CEO pay is the wrong path (though I do admit it's marketable in the mainstream news). Just ask for what you think you deserve and don't work if you don't get it. It's as simple as that.

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> If you're the CEO of a company and you increased profits by 92%

Did you? Attributing all the success a company achieves to the CEO feels shortsighted.

Aside from anything else: if all these companies saw their profits grow by so much surely there’s an external commonality there? “The CEO did it all” would be slightly more plausible if only one company experienced that success.

And that's easy to test. Remove everyone except the CEO, and see how things work out.

Bad argument. I could just as easily say "remove everyone except the ICs and see how things work out."

That would work and leave the company functioning well. Without the talking heads there is little need for management and IC domain experts and IC architects and IC sales and customer service will continue and leadership will naturally come from the rank and file.

It doesn't matter what "the truth" is, as long as the board (aka the owners) believe that the CEO's decision making is what led to the profits. The CEO's compensation is commensurate with this belief of cause and effect.

Maybe. It could well just be the market and luck, but it could be the CEOs decision. On the other hand, it's never because the line workers just started working harder. Think about being an early engineer at Amazon vs the same at another startup that never went anywhere. Those engineers did the same amount of work, but the difference is that Jeff Bezos was telling the Amazon engineers what to build. BTW I'm not making an argument that workers shouldn't share in the gains, just that people at the top are much more likely to be responsible for them.

> Those engineers did the same amount of work, but the difference is that Jeff Bezos was telling the Amazon engineers what to build

Particularly at early stage startups engineers are often responsible for a ton of innovation. It’s rarely exclusively top down instruction. Same goes for pretty much every company I’ve ever worked at. The CEO is not making every decision and coming up with every idea.

> If you're the CEO of a company and you increased profits by 92%

This assumes that the increase in profit is attributable primarily to the CEO. Well, that at least 43% (40/92) of it is.

> Just ask for what you think you deserve and don't work if you don't get it. It's as simple as that.

This only really works with unions. Fortunately, these workers have one.

> Just ask for what you think you deserve and don't work if you don't get it.

This is the most wildly privileged take possible on the issue.

I agree. Someone in the leadership tier can generally get by longer without desperately needing to work; their house is often paid off, they get dividends from shares, etc. Down in the blue collar ranks, many of those people are scrounging to stay on top of rent, or pay a mortgage, or getting hit by rising food costs. Many workers aren't in a position to change jobs on a whim.

It's probably a bit easier if you can collect unemployment for refusing to work, like I hear California is doing.

It's called a strike and it seems to be working. The key is that everybody does it at once.

> The key...

If that were true, the pay of every non-union employee would be minimum wage.

That does not follow in the slightest.

> This assumes that the increase in profit is attributable primarily to the CEO. Well, that at least 43% (40/92) of it is.

The CEO's didn't get 100 billion extra pay, they just got 40% more than before not 40% of all the profits.

It seems erroneous to me to imply that the CEO deserves a bigger pay increase than the workers that actually increased profits by 92%

Doing math like this is always bad and just leads to arguments.

Imagine a chocolate bar factory, making chocolate bars for 50 cents and selling them for $1... 1mio per month, 500k profits per month.

Then a new ceo comes, sees that all the ingredients are vegan, there are nuts inside, making the bars "healthy", slaps on vegan logos, superfood logos, changes the ads to make the chocolate bar seem more high end and raises the price to $2 each... due to new logos, superfood text and ads, even with a price increase, 1mio of chocolate bars are sold, and the profits rise from 500k to 1.5mio per month.

Did the workers make the chocolates that brought in 500k? sure. Did the same workers make the same chocolates that brought in 1.5mio? sure. Did the workers do anything differently than the month before? Change anything? No. Did the ceo make a single chocolate bar? Nope. If the workers did the same as they did the month before, and if the CEO didn't make a single chocolate bar, who 'created' the extra 1mio of profits?

Sure, it sounds intuitive to put dollar values to each person, but reality is more complex than that. In the end, workers want to get the as much as possible money for least work done, and owners want to pay as little as possible for as much as possible work done... and that applies to everything, from workers and owners in a company to average joe buying apples (most apples for least amount of money)

this is a superficial argument that leads to the point that you want it to, rather than determination of the factors such as:

Was there an entire marketing department that was needed for this to be successful? Why aren't we quantifying that?

Why aren't we quantifying the new QA processes to make sure the packaging is correct?

Why aren't we factoring in workers downstream contributing to the success by being able to pivot and be malleable in the job making this possible in the first place?

Why is it so anathema to people that everyone can share in the profits? Its not like we're saying only pay CEOs 100K per year or something. 1:25 ratio pegged to the lowest paid worker use to be the norm, for decades, and CEOs were plenty happy with that too.

You cannot calculate stuff like this... you just can't.

If they earn so much more, should they pay contractors more too? Does your plumber ask how much do you earn before he fixes your toilet?

What about other supplies? Should they pay more for cocoa? For sugar? Do you pay more for bread in your local store than someone who earns minimal wage?

You do none of that... you try to get the lowest price when you're paying (even if the plumber has 8 kids to feed at home) and get as much as possible when you're the one getting paid. Same with workers.. you pay enough to have them stay and they do as little as work as possible to stay employed.

I agree that some workers should be paid more, and that's why they're striking and hopefully they'll succeed... but taking out a calculator and saying that someone made X more so someone else should get paid more too by the same ratio is stupid. In my country, there's a huge shortage of contractors (electricians, plumbers, painters, tile-layers etc.) and the good ones earn as much as doctors... and due to a shortage, large companies have problems getting eg. electricians (because contracting pays more and gives more freedom), so their pay is going up... does that mean that accountants pay should go up too? (there's no shortage of accountants)

>You cannot calculate stuff like this... you just can't.

Then why assign the cause of the increase to the CEO?

The owners brought in a new CEO, and your company earned 1 mio more due to his decisions. The owners could've chosen a cheaper CEO, or a more expensive one, if the ceo made the company earn 1mio more, they probably made a good choice. Starting a company is easy and cheap, and anyone can be a CEO... making million(s) per month is hard.

you're saying that you can't calculate how everyone in the company can share in the success of the company?

Literally used to be called profit sharing.

CEO pay has gone up pretty much across the board, significantly outpacing workers for several decades, even at companies that have not done well.

> If you're the CEO of a company and you increased profits by 92%,

If it's a company of one than I agree. In any other scenario the CEO led the company to a 92% increase. The CEO didn't do this alone. They maybe managed that increase and had a part in it but others most likely did the vast majority of all the work.

Now, how do you feel if the CEO fired 50% of the workers and maybe the remaining work twice as much to make up the slack. This leads to a 92% increase in profits and the CEO deserves the vast rewards?

There is a big difference between "CEO responsible for increasing profits" and "CEO while profits increased", and it's not at all clear that this is one or the other. (Although in fact, if all competitors in an industry all had their profits grow, I think that's actually likely excellent proof that the CEOs weren't responsible at all.)

The workers also contributed to that 92% increase in profit.

And they got 18.1% for it.

The effort is to close that gap. Can’t build cars without workers. Elon famously tried and failed.

https://techcrunch.com/2018/04/13/elon-musk-says-humans-are-... (“Elon Musk says ‘humans are underrated,’ calls Tesla’s ‘excessive automation’ a ‘mistake’”)

Tangent: This is a mathematically muddled discussion that turns out to be about right anyway.

If profits went from $5 per year to 10, they increased by 100%, but that doesn't mean that you have room for a 100% increase in everybody's salaries.

A much better way to have this discussion would be to look at the dollar value increase in profits versus salaries.

Profits are forecast to be about $32b in 2023, up from about $19b in 2013. At about 240k total employees, and an average union pay of about $30/hr - call that about $90k year fully burdened per employee - a 40% increase would cost the company about $8.6B, or about 2/3 of the growth in profits. That may be overestimating the costs, as there are only 146k workers in the union, in which case the $5.2b increase in employee costs is... 40% of the profit growth, which seems like an entirely reasonable split of employee vs shareholder gains.

That's assuming that the CEO has anything to do with the growth in profits. Average US GDP looks to have grown by ~66% in the past decade. Do some spreadsheet shenanigans and it wouldn't take much to drastically outperform that number.

Who's to say that the various attempts to "chart a new course" and change business strategy for the shareholder's benefit during that time didn't actually make these corporations underperform vs locking the executives in the boardroom and cutting off all their decision making ability for the same time period?

So ceo and boards increased profits by screwing workers out of pay and in return ceos got pay raises.

If a ceo grew front line employ pay and also profits at the same rate, the ceo pay should naturally follow that rate.

On the other hand, if they grow profits by suppressing wages, then they should eat the same pudding they served everyone else.

> If you're the CEO of a company and you increased profits by 92%

YOU, the CEO, didn't single-handedly increase profits by even a single percentage point. One employee out of 1 million, take your millionth of a cut of the profits, that's still $150K.

the CEO has quite a bit more influence over the company financials than ICs do, however good they are.

Good leaders are able to make other people more profitable. If someone was able to make 500k people more profitable that is worth a lot.

gross growth should be less important than relative growth.

From 2013 to 2023 GM was beat in innovation by both Tesla (Model s,X , Y, and 3) and Ford (aluminum f150 and electric f150, mustang mach e) and has only recently been producing vehicles that look like their 2030 lineup - on the competitor's charging network technologies.

GM was even particularly slow on ice adoption of things like independent rear suspension. Or, the Corvette - where they basically pulled a Nissan and bought the competitor's engine.

Slow to innovate, early to fail (Volt/bolt), purchase from the competition is not what we should define as a good CEO.

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