Getting a Job at Walmart Is Harder than Getting into Harvard

[JayBird]

Anyone who works... should be paid what the job is worth... and that is the market price. 

One only has to go to the opposite end of the pay scale to see how meaningless that statement is.  When the Steve Ballmers, Edward Lamperts, Mike Dukes, Jeffrey Immelts, and John Chambers of the world continue to be paid outrageous sums for driving their companies into the ground, it's pretty clear that the "market price" of a job isn't obvious.

I would differ in opinion on that.

The market dictates that CEO of a Fortune 500 will not make $100k a year, they will make much more. Even the CEO's who take $1 a year salary still make millions in stock options. So technically the market does dictate that. Not everyone can be a CEO, it isn't golf courses and long lunches like most think. Those guys/gals are Type A personality driven people who have no issue with 100 hr weeks and never really stop working. The majority of us would burnout in 5 years at that pace. And because a small percentage of the population have the skills, education and connections for the position of CEO, they kind of are paid what they're worth.

Also, is it really fair to compare the 1% to the 99% in a living wage discussion? Seems the wiser tact would be to compare those who make less than $20k/yr to say those making $80k/yr. because let's face it, if everyone who had a full time 40hr week job made no less than even $50k/yr That would change things.

[finehoe]

The market dictates that CEO of a Fortune 500 will not make $100k a year, they will make much more. Even the CEO's who take $1 a year salary still make millions in stock options. So technically the market does dictate that.

Uh, no it doesn't.  CEOs for the most part set their own pay.  CEOs hold managerial power—simply put, leverage—over the boards that set their compensation. The leverage starts at the board nomination process—typically controlled by the CEO—and is reinforced by the information advantage the CEO has over the board in terms of the company's performance and his or her role in it. It persists because board members are generally reluctant to rock the boat and are somewhat toothless to do much given their limited time commitments as directors.

As a result, company boards cannot negotiate CEO pay at arm's length, a critical factor in aligning a CEO's interest with that of shareholders. What happens in its place is a pseudo-negotiation in which the CEO holds most of the cards. ... By playing their hand well, CEOs can extract pay that exceeds fair market value.

[JayBird]

^ I respect your opinion however the entire comment above shows your lack of knowledge on this arena. I do take the knowledge for granted, as I live in that world so it is common sense to me. There is no CEO whom sets his own pay. If there is a Chairman then they set it, if the position is CEO/Chairman than the President sets it. And so on and so forth almost like a line of succession. The only say they have is to reject it in return for performance pay based off of stock options. If a CEO could set his own pay, I would almost certainly guarantee you would see them claiming 25-50% of the profits, which is why that doesn't happen.

Now that isn't to say that the CEO isn't chummy with whoever holds such responsibility so they provide a raise when one isn't really necessary. However, the same can be said for a burger flipper who is best friends with a McDonalds manager, a teacher who is the distant relative of a superintendent or a mechanic who is brother in law of the owner. Those are all market based, but of course have certain nuances that can influence them.

EDIT: Now there is one exception to this. If the person(s) who intially founded the corporation or the descendants of the founders are running the company, then they will typically set their own pay. Though not set by the market per se, in that case the value they brought in building the company, (or being directly mentored by the father/mother/grandfather/etc who did build it) far outweighs what any hired manager could bring to the table.

[fsquid]

The market dictates that CEO of a Fortune 500 will not make $100k a year, they will make much more. Even the CEO's who take $1 a year salary still make millions in stock options. So technically the market does dictate that.

Uh, no it doesn't.  CEOs for the most part set their own pay.  CEOs hold managerial power—simply put, leverage—over the boards that set their compensation. The leverage starts at the board nomination process—typically controlled by the CEO—and is reinforced by the information advantage the CEO has over the board in terms of the company's performance and his or her role in it. It persists because board members are generally reluctant to rock the boat and are somewhat toothless to do much given their limited time commitments as directors.

As a result, company boards cannot negotiate CEO pay at arm's length, a critical factor in aligning a CEO's interest with that of shareholders. What happens in its place is a pseudo-negotiation in which the CEO holds most of the cards. ... By playing their hand well, CEOs can extract pay that exceeds fair market value.

so can you if you play the game.