You surely realize that what employers deduct in taxable compensation, the recipients are taxed on that compensation, right? This is an illustration of a broad concept know as the "tax benefit rule" in play. One taxpayer's deduction is another taxpayer's income, and vice versa. The effective rate of taxation on the multi-million dollar executive's W-2 income is currently higher than the Corporate rate, so this trade should work to the benefit of the Govt.

I understand that the $mil dollar salary is a $mil dollar deduction for the corporation, and then the $mil salary is taxes at a higher W-2 tax rate.

My only point here is that CEO salaries have outpaced worker salaries by a huge ratio and it seems (to me) that this should be a little more equitable. I don't think we can impose salary rates on a free society so my recommendation is to only allow the company a limited tax deduction. In the example above, the company would only be allowed a $100k deduction vs the current $1mil deduction but the CEO will still have to pay tax on the full $1mil.

How much should they make?


As much as someone is willing to pay them, just like anyone else.

Stock prices reflect expected forward cash flow. Having the government suck more taxes out of the same financial construct will reduce stock prices and thus capital gains taxes. Likely also reduce dividends as that is what public companies do with excess cash.

So there is a partial broader financial picture of the intricacies of this subject.

As to the governance aspect, public companies are owned by "the public" IE investors. A high % of those shares are owned by professional investor firms, mutual funds, pension funds, endowment funds, etc They do vote their shares and the directors feel those votes. The annual proxy has the board members certifying as to the reasonableness of the CEO compensation, and the Board members stand for re election every 3 years.

To think that public company board rooms are the regulation free environments of the 1920's is naive.

Which is effectively double taxation. I appreciate the concern around the pay gap, though I don't agree that a solution to this phenomenon can be reverse engineered through tax policy. More likely, such a tax policy would result in those high paying CEO jobs moving out of this country.

You either ban greed in all forms or you live with the results.

Why would anyone care what a CEO, or for that matter a professional athlete, makes?

Don't like their pay structure? Don't give them your business. Don't buy their stock. Don't go to the stadium.

If executive compensation was a serious issue the stock market would reflect it. The reality is that 'excessive' compensation is the norm now, it won't change any time soon.

I thought there already was a limit to how much a CEO's salary (and probably other high level officers) could be deducted as an expense. Possibly $1m. That is why so much of CEO compensation is in the form of stock options etc. McGuire made the vast majority of his money because of the stock price of UHC. Unintended consequences are a b!tch.

As far as the removing the cap on SS taxes, you do realize that the more you pay in, the more you get out. See my comment above about unintended consequences.

https://www.vox.com/2018/8/15/17683022/elizabeth-warren-accountable-capitalism-corporations
http://forums.pelicanparts.com/uploa...1557952447.jpg
It's hard to talk about a topic like this without it getting political.

^I feel like we were pretty a-political so far.

But my curiosity was sparked about this "Codetermination" concept, so I used the Google, and found this:

Codetermination and equality

Finally, as the system of codetermination is also mentioned in the context of “democratic capitalism” and is meant to be an inclusive framework, it seems natural to wonder whether this also shows up in numbers. For obvious reasons, macroeconomic effects are hard to measure seriously. Nevertheless, Vitols (2005) looks at 25 EU countries and finds that countries with stronger worker participation rights perform better in terms of labor productivity, R&D intensity, and had lower strike rates, although this group of countries performed worse in terms of GDP growth. Hörisch (2012) looks at the association between codetermination and income inequality (measured using the Gini index) in OECD countries and finds that it is negative – i.e. higher income equality in countries with codetermination.

LinkCodetermination in Germany – a role model for the UK and the US? | Bruegel

No you started a business because you love doing it.

Did the former CEO of GM "earn what they negotiated"? If so, where do I sign up to get a job where I can destroy the company and still end up a multi millionaire? I'm all in. I don't hate them because they make more than workers do. I dislike them because their piss poor decisions directly effect what workers make. CEO pay isn't based truly on their performance.. but how well it appears the company is performing.

The stock market doesn't give a rats ass what a CEO or the workers make. The stock market cares about profitability.

I'd like to see a source for this. And it seems like you are focused only on the salary and only on the largest corporations.

MANY smaller corporations, the CEO barely makes any salary, only the company profits at the end of the year, if there are any.

I recall reading an article on this subject a while ago that basically said that CEOs in similar industries of the same relative size, etc. were compensated similarly, ie, giant banks to giant banks. The boards of directors are in competition for top talent and the compensation scales up or down accordingly. I'm sure this is just one factor but just like teams compete to crazy levels for the best talent, companies to some degree do the same

That actually makes sense. Thanks Vern

And a heartbeat after some CEO moron makes a bad decision it's reflected in the stock price.

And if a CEO is making bank from increasing stock prices from stock options, that means significant loss of potential income if the CEO makes a bad decision.

I'm sorry, but my real world experiences inside of the pac man banking daze of corporate b$ and then with RJR/Nabisco leads me to my perspective.

I am NOT a bitter peon....retired at 48 from the huge corporate fustercluck....back in '08....no regrets about my career...none.

Life is good...is greed?

That's my point. The compensation is nothing in the big picture.

Nope...doesn't work that way AT ALL...based upon experience :(. That said....Ken Lewis took home 96 million in 2006, BOA stock was approx. $80 per share. My Wachovia stock is worth :).....thank you taxpayers for makin' the top few filthy $$$ :(
...

It's good work, if you can get it....

Ken don't give a $chit what the price is....and at least a dozen more I can name that destroyed profitable entities....I lived it on the "bigger fish" side...greed at the top :(....jmho and MMDV ;).