How to fix capitalism: eight expert solutions for America's broken system
All workers need to share in their companys success
Steven Pearlstein
Any defense of the extravagant compensation for corporate executives inevitably boils down to two points: first, its fair because its tied directly to increased profits and, second, because it provides necessary incentive for these highly talented people to share their excellence and make the often tough decisions necessary to keep their companies competitive.
Whats curious, however, is how infrequently the same logic is used when talking about the pay of frontline employees who actually produce the goods and services sold by their companies.
In the age of maximized shareholder value, the corporate view widely embraced if rarely given voice in public is that a paycheck at prevailing market wages is all the incentive workers need and all the compensation they deserve. No surprise then that after decades of soaring profits and stagnant wages, American business faces declining employee engagement, loyalty and productivity growth and declining workforce participation.
https://www.theguardian.com/commentisfree/2019/may/08/how-to-fix-capitalism-eight-experts-solutions?CMP=share_btn_tw
AJT
(5,240 posts)whose compensation is "directly tied to increased profits" get millions of dollars as they are shown the door while company profits plummet.
unblock
(52,107 posts)that is, if they had increased profits, their compensation would have been *even more* outrageous.
it's not a win/lose deal. these people get a "win big"/"win huge" deal.
yes they have an incentive to make profit for the company. however, the biggest incentive ceos have is to negotiate such incredible deals for themselves in the first place.
must be nice to be able to convince a board of directors that you should be paid millions even if you drive the company into the ground on the off chance that you might turn a profit (in which case you should be paid even more millions)....