WSJ: Top CEOs Say Companies Have Obligations to Society and not just Shareholders

Ogee Oglethorpe

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Compensation is almost always dictated by how hard an individual is to replace. Plain and simple. I don't ever see that changing? And I'm not sure why it would?

Make yourself indispensable and you will find yourself making more. It's a lot easier to replace Gorgui Dieng than it is to replace KAT; KAT makes more. I have employees who have name recognition and reputations with my clients that win work; I pay them more than the ones that don't, even though they may perform in the same role or classification.
 

TruthSeeker

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You can't magically increase the value of employees. The market is the market. "make less money!' isn't a compelling strategy for a for profit business.
The market is man-made. You simply reset the market with new parameters. Of course you can do it.
 

Section2

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The market is man-made. You simply reset the market with new parameters. Of course you can do it.
A market is based on economic law, not man made whims. Reset the market? Simply? That is a meaningless statement. Individual companies can pay their employees more. If it works, it works. Customers ultimately decide.
 

Section2

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Logic fail. Completely missed the point and moved the goalposts. Never said anything about forced redistribution.
You won't find the word "forced" in my post. Howie fail.
 

GopherJake

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You won't find the word "forced" in my post. Howie fail.
You are trying too hard, S2. Without the implicit word "force," your comment makes no sense. Also, you still missed the point. My response to your redistribution comment was an aside.

Are you having trouble keeping up?
 

Section2

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You are trying too hard, S2. Without the implicit word "force," your comment makes no sense. Also, you still missed the point. My response to your redistribution comment was an aside.

Are you having trouble keeping up?
I'm mailing it in Jake. This thread is filled with people arguing in favor of voluntary redistribution. I think all forms of redistribution are a failure.

I didn't miss your point. It's not a fixed pie. Even within a single company in your example, the pie, or profits, can shrink or grow. What do you think would happen to profits if all employees, from CEO to janitor, were paid the same wage?
 

GopherJake

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I'm mailing it in Jake. This thread is filled with people arguing in favor of voluntary redistribution. I think all forms of redistribution are a failure.
Interesting. So I can only assume that you disapprove of the tipping of the wage scales toward management. Everything should remain exactly static. Got it.

I didn't miss your point. It's not a fixed pie. Even within a single company in your example, the pie, or profits, can shrink or grow.
Not at a single point in time, they can't. But yeah, I can see you don't care about my point and only care about keeping your reputation as a d-bag.
 

Nokomis

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Based on the business acumen on display here, maybe these executives are worth their pay. :cool02:
 

Cruze

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As usual, most of the posters have missed the main point of this thread which has very little to do with employee compensation and almost everything to do with helping to make the world a better place to live for as many people as possible. Yes, the CEO's who are involved in the Business Round Table are talking about their corporate responsibility to help alleviate suffering in the world and to support the effort to fight climate change.


[A]fter the election [2016], Fortune assembled roughly 100 big-company CEOs in Rome, at the encouragement of Pope Francis, and spent a day in working-group deliberations on how the private sector could address global social problems.

The group—which included CEOs of Allstate, Barclays, Dow Chemical, IBM, Johnson & Johnson, Siemens, and many others—proposed ways that business could help reach the billions of people in the world who lacked basic financial services; support the effort to fight climate change; expand training programs for those whose jobs were threatened by technological change; and provide basic community health services to the half-billion people who had no access to care.

The aim of the gathering—in a very un–*Milton Friedman way—was to maximize not shareholder value but rather social impact. And many of the CEOs seemed genuinely eager to use their business platforms to make a difference. But the backdrop for the conversation, as I heard again and again in private discussions, was never far from mind—and remains so today: More and more CEOs worry that public support for the system in which they’ve operated is in danger of disappearing.

“Society gives each of us a license to operate,” IBM CEO Ginni Rometty told me this August. “It’s a question of whether society trusts you or not. We need society to accept what it is that we do.”

https://fortune.com/longform/business-roundtable-ceos-corporations-purpose/
 
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KillerGopherFan

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You can't magically increase the value of employees. The market is the market. "make less money!' isn't a compelling strategy for a for profit business.
Exactly. This isn’t a competition between executives and hourly workers. It’s competition between executives versus other executives and hourly workers versus hourly workers.
 

KillerGopherFan

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The value of goodwill is calculated almost entirely on the first two things.
I didn’t say other things weren’t goodwill. I said societal interest, treating employees well, and being a good corporate citizen (the things that Cruze was celebrating) were ‘goodwill’.

You said they weren’t. I’d be best if you just acknowledged that instead of saying “well, it’s mostly something else”.
 

Section2

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Interesting. So I can only assume that you disapprove of the tipping of the wage scales toward management. Everything should remain exactly static. Got it.

Not at a single point in time, they can't. But yeah, I can see you don't care about my point and only care about keeping your reputation as a d-bag.
I'm opposed to ANY government interference. Where is your angst over top NBA players being paid higher than bench players? Or top musicians? Or top movie stars vs extras? The exact same dynamic exists in every single area

I'm not arguing that anything remain static. Businesses are free to put their money where their mouth is. Pay workers .005% more and CEOs 50% less. If it works it'll be copied. Maybe CEOs are worth it. Maybe you have no idea what they do or what their value is?

A single point in time? Gee, that's a valuable way of looking at it. You're the dbag Jake, everyone knows it.
 

GopherJake

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I'm opposed to ANY government interference. Where is your angst over top NBA players being paid higher than bench players? Or top musicians? Or top movie stars vs extras? The exact same dynamic exists in every single area

I'm not arguing that anything remain static. Businesses are free to put their money where their mouth is. Pay workers .005% more and CEOs 50% less. If it works it'll be copied. Maybe CEOs are worth it. Maybe you have no idea what they do or what their value is?

A single point in time? Gee, that's a valuable way of looking at it. You're the dbag Jake, everyone knows it.
You don't read well. I suggest you review the thread.
 

Section2

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As ususal, most of the posters have missed the main point of this thread which has very little to do with employee compensation and almost everything to do with helping to make the world a better place to live for as many people as possible.
You have no idea how to accomplish this. Capitalism has raised billions out of poverty. I'd argue that makes the world a better place. Your political strategy results in destruction, regardless of how altruistic you think your motives are. Your solution has people starving in the wealthiest country for natural resources in the world. Eating zoo animals. The world doesn't need your 'help.'
 

Ogee Oglethorpe

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As ususal, most of the posters have missed the main point of this thread which has very little to do with employee compensation and almost everything to do with helping to make the world a better place to live for as many people as possible. Yes, the CEO's who are involved in the Business Round Table are talking about their corporate responsibility to help alleviate suffering in the world and to support the effort to fight climate change.
Good of you to openly admit that you failed miserably at an attempt to backdoor your way into a climate change discussion.
 

Cruze

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You have no idea how to accomplish this. Capitalism has raised billions out of poverty. I'd argue that makes the world a better place. Your political strategy results in destruction, regardless of how altruistic you think your motives are. Your solution has people starving in the wealthiest country for natural resources in the world. Eating zoo animals. The world doesn't need your 'help.'
Your argument is not with me but every CEO who participated the "Business Roundtable" that is the subject of this thread. I'm just reporting what the CEO's are saying and what they plan to do.

Here it is again in a nutshell:

On Aug. 19, the BRT announced a new purpose for the corporation and tossed the old one into the dustbin. The new statement is 300 words long, and shareholders aren’t mentioned until word 250. (Scroll to the bottom of this page to read the statement in its entirety.) Before that, the group refers to creating “value for customers,” “investing in employees,” fostering “diversity and inclusion,” “dealing fairly and ethically with suppliers,” “supporting the communities in which we work,” and “protect[ing] the environment.”


https://fortune.com/longform/busines...tions-purpose/
 
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Costa Rican Gopher

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Excellent post. CEO pay is up something like 400% since the late 70's. Worker pay is up 11%. You wonder why people can't afford childcare, housing, etc. It's not the price. It's what they earn that's the problem.

Corporate America stopped paying people. When a single family income couldn't fund a household anymore, they decided that we needed dual incomes. Now the dual income families are starting to get priced out. You wonder why people have more mental health issues, stress, and poor eating habits? Maybe it's because people don't earn enough, and they try to get time back in their day by making pre-packaged meals. It's hard to cook from scratch, clean your house, mow your lawn, and do your other chores when both parents get home at 5:30, are exhausted from work, and have to get the kids fed, washed, and clothed, by 7:30 or 8:00 bedtime. Little Johnny barely gets time to play.

I didn't even mention the skyrocketing pay of other C-Suite and top line managers. This is why we need capital gains to equal the income tax rate and why we need a high marginal rate.
When our steel & aluminum industries were sold out, followed by NAFTA, which sold out our manufacturing/working class, that was the end of single income homes unless you happened to be in the upper-middle class or above. What we need to do, is what Democrats politicians promised & Democrat voters preached for decades, and that's to renegotiate the crap trade deals that exfiltrated our wealth, exported our good paying, career jobs, created the Rust Belt, expanded income inequality exponentially & to enforce our borders so we don't have millions of illegal workers driving wages down.

With manufacturing coming back to the US now, wages for low earners rising for the first time in a decade, inflation low, etc. Now is the time to pass the new USMCA. It will be an explosion of prosperity for both the US worker & the US economy. The multi-national corporations know this & simply can not allow it to happen. That's why the multi-nationals are making these statements now. They have aligned with the Democrats to defeat Trump & the USMCA, so they need to do some virtue signaling now, so Democrats will cheer them on in their war against the American worker. The multi-national corporations are flooding DC with lobbying money via the ChamberOfCommerce (CoC) to ensure the USMCA doesn't get passed as they want to keep manufacturing in China & keep importing cheap labor in the form of illegals. Watch who opposes the USMCA. It will be very telling of the true agendas of the two parties in 2019.
 

KillerGopherFan

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It's both.
As I said before, there can be mistakes made in executive compensation, and even executive hiring or firing for that matter. But I’m pretty certain that boards don’t say “how much do we have left over for compensating hourly employees after we’ve paid the executives”.

Hourly employee wages are primarily determined on what the typical or normal wages are for the requirements of the job and capabilities of prospective hourly employees. If they paid too little for the requirements and capabilities, they’d have difficulty filling those positions, especially in a market with as low of unemployment rates as exist today.
 

howeda7

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I didn’t say other things weren’t goodwill. I said societal interest, treating employees well, and being a good corporate citizen (the things that Cruze was celebrating) were ‘goodwill’.

You said they weren’t. I’d be best if you just acknowledged that instead of saying “well, it’s mostly something else”.
Goodwill from a financial perspective is the value of your brand and your customer base. Yes, being a "good corporate citizen" and "treating employees well" can increase the value your brand but not in a major way. No one is increasing the value on their balance sheet because of the items in the OP, which you seemed to imply.
 
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KillerGopherFan

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Goodwill from a financial perspective is the value of your brand and your customer base. Yes, being a "good corporate citizen" and "treating employees well" can increase the value your brand but not in a major way. No one is increasing the value on their balance sheet because of the items in the OP, which you seemed to imply.
Didn’t say it was in a “major way”.
 

Section2

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Goodwill from a financial perspective is the value of your brand and your customer base. Yes, being a "good corporate citizen" and "treating employees well" can increase the value your brand but not in a major way. No one is increasing the value on their balance sheet because of the items in the OP, which you seemed to imply.
someone should inform these companies to stop wasting millions of dollars on PR campaigns that don't matter.
 

Cruze

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someone should inform these companies to stop wasting millions of dollars on PR campaigns that don't matter.
Too late. It appears that two years of the Trumpster's administration have made the CEO's on the Business Roundtable see the error of their ways and helped to understand the business value of operating their corporations using religious/socialist principles and standards of behavior.
 

Gopherlife

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Too late. It appears that two years of the Trumpster's administration have made the CEO's on the Business Roundtable see the error of their ways and helped to understand the business value of operating their corporations using religious/socialist principles and standards of behavior.
I'm not sure why you combined religion and socialism in that post.
 

Costa Rican Gopher

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Too late. It appears that two years of the Trumpster's administration have made the CEO's on the Business Roundtable see the error of their ways and helped to understand the business value of operating their corporations using religious/socialist principles and standards of behavior.
What are you talking about? The multinational corporations have been in bed with the Democrats since Day 1. That's why they donated more than 99% of their money to Clinton, not to Trump. Trump promised the people that he'd fight for the United States, the American worker & Main St. Those things are in direct conflict with the goals of the multinational corporations. They've done everything possible to stop the flow of wealth & prosperity from flowing back into the United States. Their goals of getting Trump out of office, align perfectly with the goals of the Democratic party. With the tariffs on China & the EU working, and the USMCA poised to hurt them immeasurably, they'll do anything to stop Trump from bringing that wealth & prosperity back to the United States.
 
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