Do we still feel CEO's are worth it?

[oneh2obabe]

Let me provide an example:

Instead of 350g of chips in the same sized bag, they give us 340g.

There are 10 major food companies that control food worldwide. Shrinkage in package size is mainly due to 2 factors - 1) price of raw product and 2) consumers balk when prices are increased so the bottom line is reduce the package size and if an increase is necessary, make it as small a possible. If you want to know which company makes store brands, e-mail head office and 9 times out of 10 the buyer will respond with the answer.

[Jonrox]

I'm good with it.

[voice of reason]

lol @ this commie BS

[Terris]

No...

By this standard only soldiers who have killed more than any other should be promoted to General because they have done more to contribute to the success of battle(business). Most Generals know that they need loyal soldiers to get the job done for them.

As it stands, most business CEO's today rotate in and out of CEO positions, in industries and companies that they may be only vaguely qualified for, without really understanding that it's the long term workers who provide them with their grossly over rated salary, whereby they might be paid 100's or even thousands of times the annual wage of the average worker.

This disparity, in the past, would have been grounds for workers to revolt.

Thank god for Victory Gin...

[OKkayak]

Who is allowed to decide one's worth and the value of a job? And how is one going to determine said worth and value?

[Gilchy]

What do you mean by "mainly due to 2 factors"? What are the other factors that aren't the main ones?

So what you are saying is we don't need to pay a CEO strangely high wages...in fact you likely wouldn't need a CEO if packaging and packaging size/weight is purely controlled by the wholesale market of raw goods. You could just hire a manager to manage people. Hell, there is a HUGE increase for shareholders right there...fire the 5-10 million dollar CEO, remove the position, hire a 250k manager, and quit "fooling" us consumers into paying high prices for cheap plastic, or less nutritious food, or less chips in the damned package...

I'm not sure of any good that a typical CEO for consumer goods does for society other than drive inflation.

I don't think you get how small of a proportion of a businesses income is comprised of executive salary. Even if you could magically eliminate the roles, duties and responsibilities of the Executive suite of a company, the impact to shareholders would not be HUGE, it would be virtually insignificant.

Take Apple, for example. Apple's CEO, Tim Cook, earned over $11,000,000 last year in salary (not counting stock incentives). Apple's net income in 2019 was around $55,000,000,000, meaning Tim Cook's salary was 0.02% of Apple's net income. If that salary was eliminated and not replaced, it would be added to shareholder value in theory. Apple has been heavily buying back shares over the last few years, but they still have 4,649,000,000 shares outstanding, meaning the "added value" from eliminating the CEO salary is 0.2 cents ($0.002) per share.

The reason most executive compensation comes in the form of stock options and grants is to align interests - the CEO only gets the majority of their overall comp if the stock and company performs.

[Trīewth]

As it stands, most business CEO's today rotate in and out of CEO positions, in industries and companies that they may be only vaguely qualified for, without really understanding that it's the long term workers who provide them with their grossly over rated salary, whereby they might be paid 100's or even thousands of times the annual wage of the average worker.

Not sure that most people would consider large sums of money to be "over rated" regardless of their position. (Perhaps you meant undeserved?)

Regardless, CEOs transition between industries because the skill-set required to set strategic direction and deal with primarily policy related and industry issues is not the same as carrying out the daily activities of producing whatever the company provides. Companies do not hire executives that are vaguely qualified and I doubt that people in those positions fail to understand that employees are important to success.

[Even Steven]

I could list a million examples but these are just quick ones that upset me the most and make me wonder how this broken system continues without retaliation of the consumers.

Lol you worry about wrong things. Don't like the products don't buy them. Easy as that.

[Trīewth]

It always amazes me that people get bent out of shape by what other people earn. Lionel Messi made $127M US last year, Cristiano Ronaldo $109M and Taylor Swift $185M.

So what? None of this has any impact on the income or lives of anyone except people competing in the same sphere.

There is a relatively tiny number of people with extremely high incomes and if they were all forced to work for $100k/year the impact on everyone else would be nil.

[youjustcomplain]

Think of it from the perspective of a capitalist. And lets face it, all CEO's must be capitalists.

Instead of metal to make a product that will last, they use plastic knowing it's cheaper and will break quicker, bringing the consumer back to purchase another, making more for the company.

Metal costs more than plastic. The product can be built for less with plastic. More profit.

Instead of 350g of chips in the same sized bag, they give us 340g.

They likely do this for one of two reasons. They want to appear to not be as unhealthy as their competition, so same service size for calories, but fewer servings. OR, to remain competitive, they had to make a change to their packaging to lower costs while maintaining the same price.

Selling appliances, which everyone needs, that only last a few years before needing a repair. The new part comes with a 10 year guarantee? Why didn't they just use that part to begin with?

Well, they build appliances with one goal. Profit. If they can save on testing, on parts, on shipping logistics, they will.
They build a fridge that lasts 2 months. they test it and test it and it keeps working fine. they sell it. 3 years later, some of them start to fail due to a faulty part. It's cheaper for them to recall that part, or just fix it, than it is to test each model extensively for 3+ years before selling it.


And lets face it, none of these issues are CEO's fault. It's not the company who produces the products fault either. It's us. It's you and me. When we go to the store, or we go on amazon or look through a flyer or ad on TV, we're looking at a product and trying to determine value. We usually look for the product we want and decide if it's "worth it". That's pretty subjective, so all companies can do is lower prices to make their product more attractive to us. We end up with cheap garbage that is often made in a sweatshop in China. Then, while on our high horse, we think it's deplorable that countries like China have poor working conditions. Now we complain that people are making money making decisions that benefit the shareholders they're accountable to. It's a strange level of thinking we get trapped in.

For interest sake
1972 pricing compared to today
http://www.thepeoplehistory.com/70selectrical.html

Look at the range and fridge. 40 years later, those appliance still sell for the same price. How is that even possible? Well, those fridges from 1972 still work. They're ugly, expensive to run and impossible to get parts for. Lots has changed over the years, including inflation. Things cost more to make now, so they must use cheaper materials and pay staff lower wages just so that we can continue to pay the same price. Then we get all bent out of shape that our salesperson is an idiot. Well, they are getting minimum wage selling cheap junk to us.

[Trīewth]

And lets face it, none of these issues are CEO's fault. It's not the company who produces the products fault either. It's us. It's you and me. When we go to the store, or we go on amazon or look through a flyer or ad on TV, we're looking at a product and trying to determine value. We usually look for the product we want and decide if it's "worth it". That's pretty subjective, so all companies can do is lower prices to make their product more attractive to us. We end up with cheap garbage that is often made in a sweatshop in China. Then, while on our high horse, we think it's deplorable that countries like China have poor working conditions. Now we complain that people are making money making decisions that benefit the shareholders they're accountable to. It's a strange level of thinking we get trapped in.

I can't agree with everything you assert in your post, but this part hits the nail on the head. Companies cheapen the products they produce and reduce the quality in large part because the consumer has become so focused on price and simply will no longer pay the prices required to get better stuff. Companies do what companies always do - respond to the market.

And still people buy the cheapest alternative they can find and expect it to last as long as a more expensive version. Unfortunately, it is getting harder to find better stuff.

There is also the ever increasing impact of government regulations imposing added costs.

[DetectivePikachu]

If it was not worth it the position would not pay as much as it does.

[DarbyD]

And lets face it, none of these issues are CEO's fault. It's not the company who produces the products fault either. It's us. It's you and me. When we go to the store, or we go on amazon or look through a flyer or ad on TV, we're looking at a product and trying to determine value. We usually look for the product we want and decide if it's "worth it". That's pretty subjective, so all companies can do is lower prices to make their product more attractive to us. We end up with cheap garbage that is often made in a sweatshop in China. Then, while on our high horse, we think it's deplorable that countries like China have poor working conditions. Now we complain that people are making money making decisions that benefit the shareholders they're accountable to. It's a strange level of thinking we get trapped in.

I can't agree with everything you assert in your post, but this part hits the nail on the head. Companies cheapen the products they produce and reduce the quality in large part because the consumer has become so focused on price and simply will no longer pay the prices required to get better stuff. Companies do what companies always do - respond to the market.

And still people buy the cheapest alternative they can find and expect it to last as long as a more expensive version. Unfortunately, it is getting harder to find better stuff.

There is also the ever increasing impact of government regulations imposing added costs.

Some of this is said tongue in cheek, but nonetheless true:
In the distant past all products were made with care and craftsmanship to last "eons". Then it became clear replacing product was the only way to maintain sustain the business ... so "end of life" has been built into many products, roofing material, paint, appliances, electronics, actually most everything. It's not a matter of consumers buying the cheapest product and so not getting a long lived product ... shortness of life is built into all products. Which also has led to another product being sold, insurance to maintain your product which has a built in "self destruct" which is often cheapness of a few key materials that can be fixed or replaced with a bit of know how. There was a CBC documentary on this awhile ago, I'll see if I can locate it.

Are CEOs worth high wages for thinking this up? Only for the company, not for society as a whole.

[Jonrox]

CEO's... still totally worth their pay.

Also, what are you guys buying that breaks down all the time? Hardly anything I buy ever breaks.

[AlienSoldier]

Some CEO's are worth their pay as they have vision, foresight and support their workers. Its not easy leading a large company (or even a small one at that). Although I am not sure how people would manage this, but pay should somewhat be associated with the current and future success of the business. Otherwise you get the issues that we see with GE. Past CEO's made large acquisitions that led to high payouts for them and later (10 years) we face the repercussions of their actions. GE is now quickly selling its businesses at a loss to try and stop the financial bleeding.

I believe the CEO that helped turn Boeing around about 10 to 15 years ago is a good example. He helped keep jobs in NA by asking the workers to find ways to cut costs and focused on what was important to Boeing which is engineering and training. He then went on to fix Ford. The current CEO that was just fired at Boeing is a great example of a person who focused on cost cutting (current benefit for future loss) with no thought as to how it would affect the product or the future.