Re: Are CEO's salaries bloated?

Everyone deserves a fair price for their work,
As a matter of 'game theory' if a person has to work to eat and survive, but business only has to hire if it determines it can sufficiently profit by adding employees, it is an 'unfair game' biased against workers, and we should expect real wages to stagnate over time.

And this is exactly what we observe.



but should there be caps on CEO salaries?
The corporate structure is part of the general institutional structure, which is producing the seemingly higher than necessary CEO salaries. Simple caps would have other consequences.

More fundamental changes to the institutional structure are needed to put incentives in place for alternative distributions of incomes.


Is it fair to lay off workers when your own salary is worth tens of millions of dollars.
At the macro level, with sufficient aggregate demand to ensure full employment, efficiency increases total output. Therefore, layoffs without production cuts potentially benefit the entire population.

However to get that outcome, the current institutional structure has to be adjusted to include the necessary incentives.


Or, does the market require high salaries to retain the highest quality leaders and the lifestyle they must lead in their high risk jobs?
No. The reason for the high CEO salaries is a function of the corporate structure that includes the legal arrangements between shareholders, board of directors, and management. It is the resulting interaction that will continue to push up CEO salaries.

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