The MAXIMUM Wage Law

[Johnfromokc]

Forget the minimum wage. The Maximum Wage might solve many of our pay and taxation problems.

Peter Drucker, a busness management legend supports this notion. A little about Drucker for those not familiar:

During his long consulting career, Drucker worked with many major corporations, including General Electric, Coca-Cola,[21] Citicorp, IBM, and Intel. He consulted with notable business leaders such as GE’s Jack Welch;[22] Procter & Gamble’s A.G. Lafley;[23] Intel’s Andy Grove;[23] Edward Jones’ John Bachmann;[24] Shoichiro Toyoda, the honorary chairman of Toyota Motor Corp.; and Masatoshi Ito, the honorary chairman of the Ito-Yokado Group, the second largest retailing organization in the world.[25] Although he helped many corporate executives succeed, he was appalled when the level of Fortune 500 CEO pay in America ballooned to hundreds of times that of the average worker. He argued in a 1984 essay that CEO compensation should be no more than 20 times what the rank and file make — especially at companies where thousands of employees are being laid off. “This is morally and socially unforgivable,” Drucker wrote, “and we will pay a heavy price for it.”[3]

We are now paying the heavy price that Peter Drucker predicted back in 1984.

In a nutshell, the Maximum Wage works like this:

CEO pay would be limited to 25 times the pay of the lowest paid worker in any corporation. For example, if the lowest paid worker earned the U.S. minimum wage of $7.25 per hour, or $15,080, the maximum CEO pay for that corporation would then be $377,000. The only way the CEO and other management would get a raise, is if the pay of the lowest employee was increased.

Current average CEO pay is currently 343 times that of the average worker, and some CEO's are paid more than 1,000 time the average worker. Seriously - how can that be justified?

What say you to the Maximum Wage, OTz members?

 

[pjbleek]

Forget the minimum wage. The Maximum Wage might solve many of our pay and taxation problems.

Peter Drucker, a busness management legend supports this notion. A little about Drucker for those not familiar:



We are now paying the heavy price that Peter Drucker predicted back in 1984.

In a nutshell, the Maximum Wage works like this:

CEO pay would be limited to 25 times the pay of the lowest paid worker in any corporation. For example, if the lowest paid worker earned the U.S. minimum wage of $7.25 per hour, or $15,080, the maximum CEO pay for that corporation would then be $377,000. The only way the CEO and other management would get a raise, is if the pay of the lowest employee was increased.

Current average CEO pay is currently 343 times that of the average worker, and some CEO's are paid more than 1,000 time the average worker. Seriously - how can that be justified?

What say you to the Maximum Wage, OTz members?

how about instead giving money back to the citizens and jobs for all?
been unemployed for the past two years and have gone on many too many interviews, resume drops, etc...
my wife was also an officer at her last job and I really do not think putting a cap on salary of any officer of any business is going to make things better.

 

[Alien Allen]

sounds like another anti capitalism wealthy envy socialist drivel

 

[Kyle B]

This is reactionary towards the bad economy and a product of the resentment that most people have towards corporations. I bet when the economy is in good shape again you won't be hearing suggestions like this.

The problem is, if you cap a CEO's salary, where does it stop? Soon we'll be capping the salaries of anyone who makes "too much" in the opinion of the general public, which changes a lot. This isn't limited to people who make millions of dollars a year.

 

[Zorak]

By capping executive pay, there's a real danger of discouraging both domestic entrepreneurial interests and foreign investment. Both of these are vital for the creation of jobs.

 

[Johnfromokc]

This is reactionary towards the bad economy and a product of the resentment that most people have towards corporations. I bet when the economy is in good shape again you won't be hearing suggestions like this.

Had you read the entire post, you would have noted that Peter Drucker championed this idea in 1984 - that was 27 years ago.

You do know who Peter Drucker was don't you?

The problem is, if you cap a CEO's salary, where does it stop? Soon we'll be capping the salaries of anyone who makes "too much" in the opinion of the general public, which changes a lot. This isn't limited to people who make millions of dollars a year.

If a CEO's salary is capped at 25 times that of the lowest paid worker, it is not really capped completely is it? A 10% raise for the lowest paid employee = a 10% raise for the CEO. That is more than fair to the CEO. 10% of minimum wage = $1,508 annually, while for the CEO it equals $37,700 which is more than twice the lowest paid worker salary!

 

[Alien Allen]

trouble is that this paints a blanket over all corporations does it not?

I think many CEO's are getting paid absurd amounts

But how do you deal with those who put their life investments into developing a company and they lose everything if the corporation folds? It is their money on the line and they should be able to pay themselves whatever they want.

This kind of throwing all into the same club is shown for its unfairness when it comes to what some businesses can write off. My company is a tiny one but just because I have more than a certain percentage of ownership I can not take certain deductions. Never mind the fact that x percent of my company is nothing compared to x percent of lets say Ford Motor.

Most of my employees have been with me for over 30 years. The one with the least seniority over 15 years. That is not by accident. There is nothing in a capitalistic society that should guarantee anything to a worker. The best workers will be fairly compensated or move on. IMO

 

[Johnfromokc]

trouble is that this paints a blanket over all corporations does it not?

I think many CEO's are getting paid absurd amounts

But how do you deal with those who put their life investments into developing a company and they lose everything if the corporation folds?

This kind of throwing all into the same club is shown for its unfairness when it comes to what some businesses can write off. My company is a tiny one but just because I have more than a certain percentage of ownership I can not take certain deductions. Never mind the fact that x percent of my company is nothing compared to x percent of lets say Ford Motor

Are you paying yourself 25 times more than your lowest paid employee?

 

[pjbleek]

trouble is that this paints a blanket over all corporations does it not?

I think many CEO's are getting paid absurd amounts

But how do you deal with those who put their life investments into developing a company and they lose everything if the corporation folds?

This kind of throwing all into the same club is shown for its unfairness when it comes to what some businesses can write off. My company is a tiny one but just because I have more than a certain percentage of ownership I can not take certain deductions. Never mind the fact that x percent of my company is nothing compared to x percent of lets say Ford Motor

that was what happened to my wife's company she worked for. the CEO put for forth his own cash and went out looking for investors and actually said no to a big conglomerate and when the company folded he was financially stripped and his soul was shot too...he thought he could have done it on his own...but alas..

 

[Zorak]

Are you paying yourself 25 times more than your lowest paid employee?

I think Allen's point was more about the risk and reward element of business ownership.

If you take away the reward, who will want to take the risk?

 

[Kyle B]

Had you read the entire post, you would have noted that Peter Drucker championed this idea in 1984 - that was 27 years ago.

You do know who Peter Drucker was don't you?

If a CEO's salary is capped at 25 times that of the lowest paid worker, it is not really capped completely is it? A 10% raise for the lowest paid employee = a 10% raise for the CEO. That is more than fair to the CEO. 10% of minimum wahe = $1,508 annually, while for the CEO it equals $37,700 which is more than twice the lowest paid worker salary!

Okay, it was 27 years ago, big deal. People have been resentful towards corporate leaders for far longer.

If a CEO's salary is based off that of the lowest paid worker, than there is no flexibility. If a CEO pulls a struggling company from the red into profit, he should be rewarded separately from the lowest ranked guy who's been doing the same thing under every other CEO.

 

[pjbleek]

btw: my wife's CEO did not draw a salary because he so badly wanted the company to be all it could be...

 

[Alien Allen]

I think Allen's point was more about the risk and reward element of business ownership.

If you take away the reward, who will want to take the risk?

Oh come on now

Lets not let common sense get in the way eh

That is exactly what I meant. And the socialists could care less about risk reward. Because in a socialist society there is no need to take risk. You settle for what is doled out to you because that is the way you are programmed.

And what I make has nothing to do with the issue Johnny

 

[Panacea]

btw: my wife's CEO did not draw a salary because he so badly wanted the company to be all it could be...

That should be a given, if they care. Reminds me of Peyton Manning taking the pay cut for his team mate.
It only benefits them in the end, if the business thrives again.

 

[pjbleek]

That should be a given, if they care. Reminds me of Peyton Manning taking the pay cut for his team mate.
It only benefits them in the end, if the business thrives again.

Almost every team has re-written contracts to keep players, hell even Tom Brady did the same thing!

 

[Panacea]

Almost every team has re-written contracts to keep players, hell even Tom Brady did the same thing!

That was the one that came to me off the top of my head

 

[Johnfromokc]

Okay, it was 27 years ago, big deal. People have been resentful towards corporate leaders for far longer.

If a CEO's salary is based off that of the lowest paid worker, than there is no flexibility. If a CEO pulls a struggling company from the red into profit, he should be rewarded separately from the lowest ranked guy who's been doing the same thing under every other CEO.

So should that CEO be compensated 1,000 times the average while firing 1,000 workers so the board of directors will get a higher stock yeild?

WTF is wrong with paying a living wage to the workers in a company? The CEO's will always make multiples of the workers pay - meanwhile, this CEO is looking for ways to not provide health insurance or vacation to the workers, while lining his own pockets.

Is that morally right to push wages and healthcare down while enriching oneself?

 

[Johnfromokc]

I think Allen's point was more about the risk and reward element of business ownership.

If you take away the reward, who will want to take the risk?

Please explain how capping CEO pay at 25 times the lowest workers pay is taking away any reward?

 

[Kyle B]

So should that CEO be compensated 1,000 times the average while firing 1,000 workers so the board of directors will get a higher stock yeild?

WTF is wrong with paying a living wage to the workers in a company? The CEO's will always make multiples of the workers pay - meanwhile, this CEO is looking for ways to not provide health insurance or vacation to the workers, while lining his own pockets.

Is that morally right to push wages and healthcare down while enriching oneself?

The CEO is doing what's right for the company. That's what he gets paid to do. If the CEO needs to cut jobs and lower costs to improve profit, that's what he's going to do. If he doesn't, the board is going to fire him. So what do you expect him to do?

Also, if you lower a CEO's pay based on the changes he makes to the company, he's not going to want to be CEO.

 

[Zorak]

Please explain how capping CEO pay at 25 times the lowest workers pay is taking away any reward?

A salary of several hundred thousand is of course ample. And in fact probably beyond the reach of most business executives.
But it is taking a reward; by its very nature, it can only target the successful.