View Full Version : A disturbing factoid

Jeffrey Makiel
10-20-2006, 9:05 AM
I was watching CNN Lou Dobbs last night and seen an interestingly sad factoid. He said that large corporate CEOs make 430 times the median American worker. That is, what a CEO makes in one day takes the average American worker 2 years.

Then, the next segment talked about the CEO of United Health Care. Given the fact that health care is unreachable for 20% of the US population, and almost 50% are under-insured, it did not stop the CEO from a $1.1 billion dollar salary package.

What's gone wrong?


Chuck Wintle
10-20-2006, 9:59 AM
So what happens when those among the 20% become seriously ill and require medical care?

Dennis Peacock
10-20-2006, 9:59 AM
While this topic is extremely volatile, I ask that the discussion be reasonable and non-attacking. Please?
This topic alone makes my blood boil. So I'll not comment.:mad: :rolleyes:

Jeffrey Makiel
10-20-2006, 11:18 AM
Dennis...if you want to delete my post, that's OK. Besides, I'm not sure if boiling blood is covered by my health insurance policy! :)


Al Willits
10-20-2006, 11:20 AM
Someone once commented to me that the middle class is slowly decreasing in size, corperate greed has become uncheckable and gov't become its own worse enemy...might be right.

Not sure what can be done, seems voting has become the better of two evils and I pay over 50% of my income in some sort of tax....makes ya kinda wonder huh?

I'm betting more than Dennis has blood is boiling, over this subject...

Al....yup, me too

Jim Becker
10-20-2006, 12:04 PM
Besides, I'm not sure if boiling blood is covered by my health insurance policy!

It is likely excluded due to it being experimental... :p

Stuart Johnson
10-20-2006, 12:54 PM
So what happens when those among the 20% become seriously ill and require medical care?

Many can receive medicaid. There is another group like I am in right now. Not sufficient wealth / income for private insurance but with too much for medicaid. Too young for medicare and too old to find meaningful work. We have two choices.
1. Pay for care until there are no assets left then sign up for medicaid.
2. Die.

Number 2 seems like a poor option until you realize number 1 will leave your spouse with no real assets. Plus, with medicaid you'll get second rate care after the illegals are handled and then die anyway.

Russ Filtz
10-20-2006, 1:39 PM
There must be some good happy medium between capitalistic greed and a socialist State!?

Jack Dickey
10-20-2006, 5:11 PM
Our parent company ( worth 50 billion five years ago when they bought us for 2 billion ) bought us from another company worth 20 billion at the time .. I wont name any names here publicly , but you all know the smaller one really well .. Man talk about greed , jeesh these guys , even the liitle wheels , like our branch president are knocking down the money .. On the one hand I dont have an issue with it , on the other hand I do .. I had an offer for free college when I joined they Navy 32 years ago , and turned it down , so I cant complain too much there .. But the severance packages , and packages if you get fired are ridiculous ..
When the president of the smaller company retired in 1998 or there abouts , his severance was more per year than his salary , including his stock options ..
It would take me 40 years at my current salary to equal his retirement ..

Ken Garlock
10-20-2006, 6:07 PM
First the 430 times number:
Let us say that the average worker makes 40,000 per year. That would mean that the average CEO makes 17,200,00 per year. Not excessive for a person in charge of billion dollar company. Most likely part of that compensation is in stock options; if company doesn't do well under the CEO leadership, the options aren't worth the paper they are written on.

The 1.1 billion pay:
The implication is that you want to divide up that with the 20% that have no medical coverage. Let us take away 1 billion, and leave the poor CEO with a meager 100,000,000. We have 300,000,000 people in the USA; hence, 20% is 60,000,000 people. Let us divide that billion dollars by the 60 million that are said to have no medical insurance.
1,000,000,000/60,000,000 = 1,000/60 = $16 and 67 cents. Wow, that will really pay some big medical bills!:rolleyes:
Like the first case, that 1.1 billion may be in stock options and other performance based pay.

A publicly traded company has a board of directors that set the executive salaries for all the corporate officers, CEO, division presidents, and vice presidents. The CEO doesn't write his own ticket. He is most likely on the board, as is one or more vice presidents along with executives from other companies, educators and others that are respected in their field. But, the CEO, and VPs only get one vote just like everyone else on the board.

So, before every one goes 'postal', stop and put things in perspective. Yes, the numbers seem high for one person, but his pay would be a drop in the bucket of attempting to cover the uninsured.

Two things to remember,
1) This is not a socialist society, you are expected to work for what you get.
2) IF you wait on the government to help you, you will be sadly disappointed.

Yes, I agree that a giga buck is excessive pay....

Dennis Peacock
10-20-2006, 7:55 PM
OK.....Just to remind everyone before we get this out of control:

No politics....so let's leave out the Socialist, Democrats, Republicans, and yes, even the independents.

No Politics and No Religion and we can keep this "discussion" moving right along. ;)

Jeffrey Makiel
10-20-2006, 8:39 PM
When anyone gets paid so much, why should they care about the long term health of the corporation? A recent example is the new CEO of Ford that got a $13M signing bonus. This is probably small potatos in corporate Americal, but he can be fired tomorrow and still make more money than 10 working folks make and spend in a lifetime. On top of this, Ford is going thru an unprecedented layoff and plant shutdown.

Also, stock options for CEOs are not the same as for the public. Even if the company is loosing, many CEOs have a special buyout provision that sets their stocks artificially high. Again, where is the incentive for the long term health of a company? And in this case, the short term health?

In Ken's calculation, getting rid of just one CEOs exhorbitant salary will yield 16 dollars per unisured person. That may not seem like much, but this is only one CEO. What about getting rid of 1,000 CEOs with bloated salaries? That's $16,000 per uninsured person. We might need a bigger bucket.

Another factoid presented on CNN was that 57% of Americans do not believe the "American Dream" is no longer acheivable. In my area of the country, a small 60 year old home is $400,000+, property taxes are $7,000/year, independent family health care is $26,000/year, car insurance is $2,000-$3,000/year, and sales tax is 7% now. Also, natural gas and oil increased 20% in the last two years, and electricity (which was deregulated in NJ in 2004) increased 25%. I see why the 57% feel the way they do, and I did not even mention income taxes, homeowner insurance, and gasoline prices.

Something has gone wrong when the trend is that a few have millions, and millions have few.

-Jeff :)

Jack Dickey
10-20-2006, 8:41 PM
Oh yeah Ken I definetly agree with all you commented on .. A HUGE portion of our BIG WHEELS income is from stock options and the like , if the company doesnt do well , then they miss that income .. And like many money funds managers , people follow the CEO's of companies , when it comes to investing their money in stocks .. They move around somewhat , and if the CEO has a great track record of making money for a company , then when he moves on to another , odds are he can do it there as well .. And many times , he knows very little about the intricacies of the particular business he may be in command of .. But basic buisness principles are the same every where , and that is where he excels ..
Enuff of my rant , I'll back off ..

Ken Garlock
10-20-2006, 9:18 PM
The health care CEO is the exception. The only CEO salary I have knowledge of was that of the Texas Instruments CEO when I worked there. His salary was right around one million dollars, write a check and put it in the bank. Depending of the profitability of TI in a particular year, he may or may not get a bonus or say a half million. And he could also get stock options. It was not a sure thing and he would the extra money or options. In the 2001-2 time frame, TI was a 10 billion dollar per year sales company. You can't squeeze much welfare health care from this CEO.

People don't believe in the American dream? Probably because too many of them are setting back and yelling Ubi Meum est?, instead of E Pluribus Unum. They are waiting for our government to dole it out to them.

Gary Herrmann
10-20-2006, 10:08 PM
Theres been a string of articles on the CNN site lately regarding the middle class. It started with the eroding middle class and poor representation in government. It saddens and upsets me. My father was a fireman and my mom stayed home, so I was raised in a middle class family. Technically I guess I'm not middle class, but I maybe I still think that way.

I do remember working for a large not for profit healthcare company 10+ years ago and the CEO was making over a million per year. When it came time for performance appraisals, I wanted to promote and give a nice big raise to one of the women that worked for me. I was told I couldn't due to budget constraints. This woman took the bus to work every day. Rarely missed and was worth her weight in gold to my group. She was making less than 8 bucks an hour.

I think you can earn a good wage in this country if you work at it. However, I also think that for others, it doesn't matter how hard you work, you're never going to get much above subsistence living. I always think about her when this topic comes up. I would hire her in a second if I needed someone. Hopefully, I could pay her better.

The world isn't fair, but nobody every promised it would be.

skip coyne
10-20-2006, 10:32 PM
just got my homeowners insurance renewall today

150% increase over last year .

wonder how the CEO salary is doing :mad:

Curt Fuller
10-20-2006, 11:35 PM
The other night I was watching a PBS program that had Bill Gates and Warren Buffet answering questions from a large group of college students. Remember these two guys are the two most wealthy people in the world. When asked what they felt was one of the most serious problems facing our country both said it was the growing division of wealth and class. Warren Buffet said that if he wanted he could manipulate his wealth so that he would pay absolutely no income taxes while the average middle class wage earner is forced to pay the standard tax rates. He felt that anyone should be free to earn whatever they can as long as it's legal. But he said it was immoral for our government to not tax the wealthy accordingly. And he blamed that for part of the division being created between the wealthy and middle class.

The opportunity to better yourself to the point that you're so stinking rich is just part of the American way. But to then use your wealth and influence in a way that turns your back on and ignores the system that allowed you to become rich just doesn't seem right to me. I applaud people like Bill Gates and Warren Buffet that are funnelling some of their wealth back for the benefit of the rest of the people.

As for CEO salaries, they're determined by stockholders and the board of directors of their respective companies. If you don't like what the CEO is being paid, don't purchase their product or services. But if you don't like the way the burden of taxes is distributed, well then you have a chance to express your opinion on November 7. There are either a lot of folks that like the way things are going or else there are too many that aren't concerned enough to make a change.

Paul Prescott
10-21-2006, 12:34 AM
My 2 cents, as an M.D. for 30+ years:

Wall Street owns health care and this country. Corporations do whatever is necessary to raise their bottom line to inflate stock prices, including outright fraud (Enron, Global Crossing, and too many more), while the CEOs etc get far more than they deserve. Yeah they "manage" the company (see above) but the workers (pensions dying, health care insurance premiums up every year, home prices out of reach, etc etc etc) struggles to survive. How many of you older members grew up in a home with both parents working, just to make ends meet?

The minimum wage will buy you nothing and hasn't been raised in how many years?

Millions of jobs shipped overseas because there they can pay 10% of salaries here. Bottom line again. Make your company look good, get more money.

RE: board of directors set salaries, compensation, bonuses, "golden parachutes." Yep - I sit on your board, you sit on mine, we raise each others pay. "Corporate incest."

Years ago CEOs earned about 10 times the average worker (who actually makes the company profitable by their labor). Now they average 40-50 times, while getting so many 'benefits' (use of the corporate jet, paid insurance, guaranteed 'pensions' even if the company loses money...).

The middle class, the workers, the backbone of the USA, is dying. The gov passes 'tax reform' that saved Bill Gates $12,000,000, Dick Cheney in the neighborhood of $500,000, etc etc etc, while 'saving' the rest of us mayber a thousand, while the national debt skyrockets.

And, in my field, those without insurance crowd ERs, and YOU pay the bill. (BTW, I'm a pediatrician because I like it. Lowest paid 'specialty' in this country, and I'm certainly not getting rich.)

Now, look at other countries. A friend in Canada paid 48% in taxes last year. My taxes (income, FICA, Medicare, sales, property, etc etc etc) amounted to 54%. What do I get for that compared to him? Meanwhile I see people who can't buy their meds (WAY high priced compared to other countries 'cause we don't dare question BigPharm). I see people that go to the ER with serious conditions, who can do nothing but get worse because they can't get the needed follow-up.

So, add up your TOTAL taxes sometime. Then figure out what you get for it. 'Socialism' is a nasty word, designed to raise peoples' disgust. But for what we pay we get little.

Unless you're a CEO, or sell your company (YouTube to Google) to get rich.

R Payne
10-21-2006, 4:29 PM
It's a problem of ignorance and greed. The greed is obvious to see, everyone wants everything. Some are lucky enough to find a way but then just want more and don't care at whose expense. The ingnorance comes in because this is a cycle that repeats. History is repleat with examples of the upper or ruling class getting everything at the expense of the middle or working class. This makes the working class the starving class. People are only willing to starve so long before they rise up violently, usually killing the upper class to redistribute the wealth. By the indicators I see (upper class pay, increased violence, etc) I guess we in America are less that 50 years from riots and rebellion if nothing changes.


Jim Bell
10-21-2006, 7:57 PM
Most work and sell themselves at wholsale level. These are called employees. Employers make a little off each worker and normally sell the product/service at the retail level for a profit. The employees in turn take their wholesale paycheck and shop/spend in the retail sector. This explains why when you think that little extra cash is at hand generally SOMETHING happens to put the employee back where he was last week. If you want things to be different you must do something different. Working hard isn't always the answer. To succeed you must work smart. You make a living working 9-5. You make a fortune working from 5- midnight. I agree the CEO salaries seem outrageous. So become a CEO. With a little research you will find many CEO's and self made millionaires are not highly educated. Many never finished high school. Attitude, work ethic and tenacity will go a long way to making a brighter future. I hope this is of value to you. It sure helped me.I grew up in a home with no plumbing or electricity. My parents had little except 6 kids and I was the oldest. I could go on but my point has been made. It is up to each of us to find our way. I wish you all the best.

Kristian Wild
10-22-2006, 11:23 AM
Yeah it gets me stirred up too. Here's another little factoid I found eye-popping: The three richest people in the world are worth just slightly more than the 48 poorest countries in the world. Wow...now that's just not right.