It's obviously wrong. NBA teams are a good counter-example. Nobody talks about the team's president/CEO/etc when prognosticating which team will be the best.
I think this may be slightly misleading because the owners of the team serve in many ways that a CEO does in a traditional company. And owners make literally billions off their teams.
> At least 44 NBA players are set to earn more than $30 million in salary for the 2023-24 season, according to ESPN, while only 36 S&P 500 CEOs earned more than $30 million in 2022, according to the AFL-CIO’s Executive Paywatch.
If the CEO go on strike and don't come to work for a month, how many cars will not be built, and how money will the company lose?
If the union factory workers go on strike and don't come to work for a month, how many cars will not be built, and how much money will the company lose?
Therefore, who is actually more important to the earnings and success of the company?
That's not an interesting thought experiment at all. The workers in aggregate are clearly more valuable than the CEO alone. That's why their cumulative salary is way higher than the CEO's.
Quick estimation tells me that average ratio amongst the big three is 1:336[0].
Put differently: 336 workers’ per annum amounts to the pay the CEO gets.
There are three CEOs in this case so that’s about 1,000 workers to equal their pay.
If I recall correctly there are about 12,000 workers striking, so their cumulative salary is about 12x that of the cumulative CEOs.
I don’t know why, but that doesn’t feel “way higher” to me. I guess I just expected something along the lines of 100x for some reason.
Also makes me wonder how this scales when you look at C-Suite as a whole v. workers.
Why? No individual assembly line worker has any particular value - so if the aggregate increases then the equation, in your example, is “in check”, whatever that means.
Alternatively, if assembly workers were difficult to effectively replace, they would get paid more. Simply doing some unit of work neither makes that unit of work valuable, nor does it make the person doing it valuable.
I’d argue that no individual CEO has any particular value, or at least no more than an exceptional worker. What they have done instead is effectively organize as a class (Capital owners) to make companies profits accrue to themselves. This is why they also all serve in the boards of each other’s companies.
They obviously mean "valuable" in terms of value to the company, not literal value as a human being.
In any case, yes, if someone wants to smash rocks with a hammer, manually, all day, their work would not be valuable to a company building cars, which is what the parent means. Simply doing some sort of "work" for work's sake has no value if that work is not useful.
The original discussion was about relative change to salary, of which there has been little to no change seen amongst the CEOs in question. How much the salary is in absolute figures really means nothing with respect to discussion.
Now, total compensation is quite variable as it is largely dependent on stock price. While a good CEO theoretically can compel the price of stock higher by building a better business, realistically it is outside of control of the company.
That's just the nature of the work though. If the CEO of a film camera business decided that digital cameras weren't going to be a thing, and refuses to pivot, that'll doom the company, but it'll take decades to realize his mistake. The company will lose all its money all the same. If the CEO of the car company decides not to build any factories to make electric vehicles, that decision's also going to take years to play out. They're both important, in different ways.
Depends on what executive actions only the CEO can perform. I've seen this happen in a microcosm, where the managing director just refused to do things, and due to tasks only he had authority to do, contracts went unsigned.
Obviously large corporation will be more robust, and have things like attorney of power that - so that there's no single point of failure. But, these things happen.
Permanently losing one line worker vs one CEO? You don't have to be a disciple of Ayn Rand to think the latter would have a greater negative impact on productivity.
Not really true. They have the most people beneath them that can take the fall for them. Finance shenanigans? CFO takes the fall. Missed targets? COO or CMO. Major hack? CTO. Etc.
Hold on there chap! How is this obvious?