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Response to City Lights (Original post)

Mon Feb 13, 2012, 08:59 AM

2. Some history

 

The wealth gap is now the largest in US history - wealth concentrated in the fewest number of people.
The greatest recent period of American wealth creation and living standards improvements was in the 1950's, when the wealth gap was about the smallest.

There have been social studies done, which demonstrate that countries with greater social justice (e.g. a relatively low wealth gap) prosper more than countries with low social justice.

One of the largest problems in the creation of the current large wealth gap is executive remuneration and bonuses.
Now I got no problem with someone like Steve Jobs becoming very wealthy, due to being innovative and turning ideas into paying commercial enterprises and providing services to the benefit of all.

I do have a problem with CEO's getting awarded $12m bonuses, when the value and profits of their company has halved in the last year.

It comes back to accountability.
Nowadays large companies have remuneration committees which decide executive pay.
The CEO of one company will sit on the remuneration committee of another.
The CEO of the original company will have a remuneration committee mostly made up of CEO's and execs from other large companies.

Most large companies are majority owned by insurance companies and investment funds.
They do not rock the boat very often. If they did, the pay of their CEO and execs would likely be reduced.
It is a huge gravy chain.

In years gone by, most companies were owned by a relatively small number of shareholders.
They demanded value for money and executive pay was far lower.

You can also look at the ratio of executive pay to average employee pay of that company.
It is at it's highest ever level.

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City Lights Feb 2012 OP
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