1) "the very real problem of wealth inequality" is driven by envy and a sense of fairness, not an objective assessment of the relative contributions of each person to the final corporate income.
2) the real issue around great disparities in overall wealth is not how much someone can spend, at least in a democratic constitutional republic, but how much political power can they (and do they) wield because they are super wealthy? A partial solution to that would be more open and transparent reporting on lobbyists visits to our politicos and the respective contributions to a given legislator or other public figure's PAC or other account (both pre and post passage of the desired law). Who were involved? What was discussed? etc. As "public servants" they should have a more open exposure than private sector transactions. Some protections for national security and related sensitive issues could still be allowed.
3) we also have issues of ownership and incentives (or disincentives) in play, although I suppose most people favoring this type of Mark Cuban pay and tax scheme would say the players like Bill Gates, Jeff Bezos, Larry Ellison, et al. are so well compensated they have moved beyond returns on their contributions and are now just in the mode of seeking to be "top man on the mountain" relative to the other mountain climbers (Musk, Opera Winfrey, Taylor Swift, etc.)
4) the real test of these schemes should have an assessment stage after a few years to determine if actually providing more distributed payouts (stock options, increased 401K matches, etc.) to the custodians, dock workers, accountants, engineers, sales force, et al. below the top executive levels actually has increased net sales and value for the business. If not, you may have paid a few folks more than they were originally valued in the marketplace, but penalized all of their actual or potential customers.
5) getting a little away from this issue of relative wealth, but some of the largish payouts these business leaders and innovators get is because they have been first or best at meeting a network* based function (such as internet of things or communications or whatever), where a semi-monopoly position is essential for success. The folks behind Substack as a business would probably be pretty happy to be the sole source of information for the populace, outshining all of the current or past MSM.
*I think there is a term for this, but I don't recall just what it is -- "network something" -- but it is something that really only works well after a large number of nodes have been added to the network.
1) How would you determine the relative contributions of each person to the final corporate income? I would argue that salaries are how we do that right now. We are deciding that that's how much value that employee brings to the company because that's what we are willing to pay them. So base equity off of salaries and you will base compensation off the value they bring to the company. (Not on "fairness")
2) I used to feel this way—that the only problem with wealth inequality is that we give the wealthy too much power, and that curbing wealthy access to power would curb the negative effects of wealth inequality. We have to do that, but we also have to acknowledge that no societies have successfully separated wealth from power. Those with wealth continue to find ways to use it to get power. And there are much more negative social effects than just their access to power!
3) My husband just moved from working from an American company to a European company. In sales for the American company, the goal was to make as much money as he could for himself because that was what their incentive structure was based on. At the European company, their goals are as a team, so the entire sales team works together to make the company as much money as they can. This inherently does what you ask for here: Change the incentives so we're all in together, instead of all out for our own personal gain!
4) No doubt we should try a bunch of things and then see if they work!! I'm all for laboratories of this idea.
5) Yep. This is one of the additional societal effects of wealth inequality beyond lack of power—those with wealth don't just have all the power, they have all the stock, they buy up all the assets (real estate, businesses), their kids are better educated and have access to the right network for getting them into schools, businesses, investments, etc. The rest are at a disadvatnage because of lack of access to this network etc!
1B) I’ve met a fair number of CEOs and most arguably contribute nothing to their companies except pep talks—the archetypal “business idiot” that Ed Zitron is starting to coin. Today’s situation doesn’t reflect contributions as much as it reflects how much sway and control CEOs have over the corporate boards that are supposed to oversee them.
I applaud both Cuban and Sanders for their ideas on how to address the very real problem of wealth inequality. Income taxes and/or tax incentives are clearly good tools to use, and I think estate taxes are another tool which should be used to limit how much wealth can be passed on to future generations.
I don’t believe any CEO is worth more than 100x their median employee compensation. In fact, one can easily argue it should be only 20-50x.
If a board of directors truly wants to drive their company’s business (and their stock price), they should engage all their employees by incentivizing them along the same lines as the C-suite personnel.
This means significant equity, profit sharing, incentives, bonuses, competitive salary, and attractive benefits (sabbaticals) for all employees. This will align all employees with the company mission and goals. Turnover and training costs will be significantly reduced, and profitability & efficiency will soar with everyone rowing in the same direction.
1) "the very real problem of wealth inequality" is driven by envy and a sense of fairness, not an objective assessment of the relative contributions of each person to the final corporate income.
2) the real issue around great disparities in overall wealth is not how much someone can spend, at least in a democratic constitutional republic, but how much political power can they (and do they) wield because they are super wealthy? A partial solution to that would be more open and transparent reporting on lobbyists visits to our politicos and the respective contributions to a given legislator or other public figure's PAC or other account (both pre and post passage of the desired law). Who were involved? What was discussed? etc. As "public servants" they should have a more open exposure than private sector transactions. Some protections for national security and related sensitive issues could still be allowed.
3) we also have issues of ownership and incentives (or disincentives) in play, although I suppose most people favoring this type of Mark Cuban pay and tax scheme would say the players like Bill Gates, Jeff Bezos, Larry Ellison, et al. are so well compensated they have moved beyond returns on their contributions and are now just in the mode of seeking to be "top man on the mountain" relative to the other mountain climbers (Musk, Opera Winfrey, Taylor Swift, etc.)
4) the real test of these schemes should have an assessment stage after a few years to determine if actually providing more distributed payouts (stock options, increased 401K matches, etc.) to the custodians, dock workers, accountants, engineers, sales force, et al. below the top executive levels actually has increased net sales and value for the business. If not, you may have paid a few folks more than they were originally valued in the marketplace, but penalized all of their actual or potential customers.
5) getting a little away from this issue of relative wealth, but some of the largish payouts these business leaders and innovators get is because they have been first or best at meeting a network* based function (such as internet of things or communications or whatever), where a semi-monopoly position is essential for success. The folks behind Substack as a business would probably be pretty happy to be the sole source of information for the populace, outshining all of the current or past MSM.
*I think there is a term for this, but I don't recall just what it is -- "network something" -- but it is something that really only works well after a large number of nodes have been added to the network.
1) How would you determine the relative contributions of each person to the final corporate income? I would argue that salaries are how we do that right now. We are deciding that that's how much value that employee brings to the company because that's what we are willing to pay them. So base equity off of salaries and you will base compensation off the value they bring to the company. (Not on "fairness")
2) I used to feel this way—that the only problem with wealth inequality is that we give the wealthy too much power, and that curbing wealthy access to power would curb the negative effects of wealth inequality. We have to do that, but we also have to acknowledge that no societies have successfully separated wealth from power. Those with wealth continue to find ways to use it to get power. And there are much more negative social effects than just their access to power!
3) My husband just moved from working from an American company to a European company. In sales for the American company, the goal was to make as much money as he could for himself because that was what their incentive structure was based on. At the European company, their goals are as a team, so the entire sales team works together to make the company as much money as they can. This inherently does what you ask for here: Change the incentives so we're all in together, instead of all out for our own personal gain!
4) No doubt we should try a bunch of things and then see if they work!! I'm all for laboratories of this idea.
5) Yep. This is one of the additional societal effects of wealth inequality beyond lack of power—those with wealth don't just have all the power, they have all the stock, they buy up all the assets (real estate, businesses), their kids are better educated and have access to the right network for getting them into schools, businesses, investments, etc. The rest are at a disadvatnage because of lack of access to this network etc!
1B) I’ve met a fair number of CEOs and most arguably contribute nothing to their companies except pep talks—the archetypal “business idiot” that Ed Zitron is starting to coin. Today’s situation doesn’t reflect contributions as much as it reflects how much sway and control CEOs have over the corporate boards that are supposed to oversee them.
Exactly.
I applaud both Cuban and Sanders for their ideas on how to address the very real problem of wealth inequality. Income taxes and/or tax incentives are clearly good tools to use, and I think estate taxes are another tool which should be used to limit how much wealth can be passed on to future generations.
I don’t believe any CEO is worth more than 100x their median employee compensation. In fact, one can easily argue it should be only 20-50x.
If a board of directors truly wants to drive their company’s business (and their stock price), they should engage all their employees by incentivizing them along the same lines as the C-suite personnel.
This means significant equity, profit sharing, incentives, bonuses, competitive salary, and attractive benefits (sabbaticals) for all employees. This will align all employees with the company mission and goals. Turnover and training costs will be significantly reduced, and profitability & efficiency will soar with everyone rowing in the same direction.
I'm definitely with you here!
If you haven’t already, I can also highly recommend Ingrid Robeyns’ Limitarianism in this same vein!