John Deere strike imminent?
- Thread starter ISUCyclones2015
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KidSilverhair
Well-Known Member
Yes, when a 60:1 CEO-to-worker pay ratio just won’t do, because the business is so big it requires a ratio of more like 350:1.
Oh, right, and that’s the AVERAGE …
(Also note that’s the ratio between CEO and typical worker pay, not the lowest-paid employees … that number must be approaching infinity)
Oh, right, and that’s the AVERAGE …
(Also note that’s the ratio between CEO and typical worker pay, not the lowest-paid employees … that number must be approaching infinity)
Yes. I understand exactly how ratios work. And I'm not claiming anything. I'm simply illustrating the folly of using compensation ratios by providing an example.
But let's go down the road of your deflection for a minute and accept the premise that the lowest paid individuals at larger companies makes more. In this hypothetical scenario, we will assume they are paid 20% more and a compensation ratio of 100x. If it's 100x $30k for the smaller company, it would be $3 million per year. If it's 100X 36k for the larger one, (30k x 1.2) it would be $3.6 million a year.
Who in their right mind would take on 10X more responsibility for only 1.2X the compensation? No one who was actually qualified to do the job. Compensation ratios are a terrible idea that ignores basic supply/demand economics.
Companies are much larger today than in 1965 or 1989, but good one you for playing the class warfare card that doesn't have jack squat to do with wages. As was mentioned earlier, if Deere's CEO worked for free, it would mean an 10 cents per hour in workers' pockets. Don't spend it all in one place!
Edit: Due to payroll taxes on the part of the company and tax liabilities of workers, it would be more like 5-7 cents. Just think...in a few short weeks they'd have enough to buy an entire Slurpee!
In the scenario discussed (same pay for both jobs) the DQ Manager would get the same golden parachute. Plus free blizzards. Don't move the goalposts just because it is a hypothetical.
KidSilverhair
Well-Known Member
Yes, my “class warfare” card has jack squat to do with wages … when employee wages have remained stagnant for decades while CEO pay explodes (to, as I posted earlier, *350 times* that of their typical employee).
I‘m not making the argument that everything would be hunky-dory if CEOs worked for free and gave their compensation back to the workforce. That’s stupid. My argument - and yes it is “class warfare,” because the upper income classes have already won and just keep piling up the greenbacks while their employees *don’t* reap the benefits - is that the system itself is corroded and unsustainable.
You can’t tell me a CEO is literally worth 350 employees. You can’t tell me CEO compensation, set by boards of directors made up of other CEOs, is a fair measure of their worth. You can’t tell me corporations would fail and their shareholders would revolt if CEOs made less. And your argument that “you can’t pay your CEO a reasonable amount of compensation, he‘d just jump to another company willing to pay more” only proves my point that the whole CEO compensation system is broken.
I do not have the magic answer. But I find it astounding that average, everyday people on a Cyclone message board are defending CEOs’ obscene, indefensible rates of pay. You’re not in line for that next CEO opening, you don’t have to carry water for those guys … well, unless you’re an employee for one of those corporations, then yeah, you are literally carrying water for them.
The best way to handle this? Put employee pay on a level playing field with how you handle CEO pay. Give employees a base salary, then give them profit sharing, too. Let them gain the benefits of a profitable, productive business. Let them share in a climbing stock price. If stock options and bonuses are part of CEO pay, why not give the workers - the ones who are actually making the company profitable - a share of those as well?
John Deere CEO. Less headaches. DQ Manager has to deal with teenage employees most likely.
But the teenagers aren't unionized so it's real easy to fire them when they ask for a $0.25/hr raise
Edit:
Excessive CEO pay leads to excessive salaries of lower management.
GM employed 400,000 workers in 1970. In 2020, GM had 155,000 employees. I thought companies employed more people today.
I have no data about company size wrt employees over the past 50 years. BUT -
you can absolutely blame GM reducing workers on outsourcing, robots, and Microsoft Office (especially Excel). They also put out a much better product now than they used to.
And maybe also because of Honda, Hyundai, Kia, Lexus, Acura, Infiniti, Subaru, Mitsubishi, Mazda, etc.
Starting in the late 1960's, a number of foreign auto competitors came on the scene to challenge the Big 3. Toyota and Datsun(Nissan) arrived in the mid 1960's.
Everyone else beat me to making folly of your number of employees argument ignoring the fact that GM has lost market share. But what they neglected to mention is that employees are only one way to measure profitability. Normal people would use sales, asset size, etc. Running a company is much more than the HR department. That's probably why you're oblivious to the market value of a competent CEO.
LOL. Many companies do that. But the reason they do it with CEOs is so that their interests align with the company's. In other words, that they're not just there for the paycheck as most workers are. Would you be willing to work for half your wages but with stock incentives that would allow you to make 3X as much if you and your fellow employees executed and made the company gobs of money? Hell no you wouldn't. You want yours first because you have house and car payments. And I'm not saying there's anything wrong with wanting paid first, but those who are paid first are paid the least. That's why employees get paid first and owners last.
At the Dubuque plant, I believe there were around 4,000 EE's in the 70's/80's and around 2,500 today.
Global business has been a boon for companies like JD, but a double edged sword for US manufacturer EE's as workers exist globally.
Well a big part of that is just efficiencies and stuff within factories. JD especially makes a LOT of equipment they ship all over the world. Those big ol' cotton pickers they make in Ankeny basically all get shipped to China.
50% of Deere's business is outside US/CA. They have some manufacturing in other countries but most of it is still made here, especially the big ticket items.
The round baler pickers made in Ankeny are primarily sold to the domestic US market. They do build some pickers for export to China but they are the old style basket models.
