I decided to look up some numbers and do some math.
So the CEO earns 362x the average employee at GM. Basically if they took the CEO’s pay and redidsteubuted it, they could double the pay of 362 lucky workers at GM. Or take twice as many workers as that and increase their pay by 50%.
But how many workers are there and how far will this CEO’s pay go?
GM has 167,000 employees. Collectively, their pay totals 167,000x the salary of the average employee. Very basic.
Now let’s add the CEO’s pay to that sum: we are now up to a sum of money equal to 167,362x the average salary.
And if we distribute that amongst all the employees, that’s:
167,362/167,000
Get out your calculator and you’ll see that this would fund a two-tenths of one percent raise for all employees. That’s 0.002%
The pay is very unfair. But we should be realistic that the CEO is one person and their fat salary doesn’t actually go very far in terms of worker raises.
Let’s do the math in reverse: to give all GM employees just a 2% raise would cost 9.2x the CEO’s salary. And the workers want a 40% raise over 4 years.
I hope they get it. I believe that money is there and currently going to the entire executive layer, the board, and shareholders. But when anyone tries to oversimplify and it make it all about the CEO’s salary, I cringe a bit because it really isn’t that meaningful a sum of money, unfair as it may be.
We should be looking at profit or better EBITDA and showing how easily it could be used to raise worker pay.
Did basic digging, no idea where the tweet's numbers come from.
Ford CEO Jim Farley received ~$21mil in total compensation in 2022, mostly in stock awards. Source
Average salary of Ford employee: ~$67k a year, derived from $37k in the bottom 10th percentile and $120k in the top 90th. Source
Which gives a ratio more like 313 to 1.
365x the average workers salary divided by 150,000 workers.
Like the math is written out.
The company can pay more for sure, but Reich should know enough to look at these publicly traded companies' cash-on-hand.
As an example:
According to Ford's latest financial reports the company has $42.82 B in cash and cash equivalents.
CEO pay needs a cap but not because workers are paid less. CEO pay is not that big a drain on these companies' resources.
If we took the 29 million the GM CEO was paid in 2021 and broke that up equally across the roughly 167,000 employees they each get an extra $173-174 dollars for the year.
They are getting paid too much but their salary isn't enough to correct the shortages in worker pay. There are other places that need to be looked at in addition to CEO pay to find the money workers deserve.
"We don't have the money, because I want the money."
This is every corporation in America.
It's gross
Meanwhile small IT buisness: 1-2
