How does CEO pay go Through the Roof without price increases in products?

[Widdekind]

This Forbes article strikes me as a little dishonest; the argument made is that if only McDonald's workers were required to make $15 an hour, the prices wouldn't change, on the theory that as a capitalist they are already pricing at the optimum to maximize profits and market share. This is true, though their reduction of profit might make them choose another line of business. However, even the author admits that it would make a big difference if all of its competitors also had a raise in workers pay; then a natural increase to a new equilibrium price would result. As he states in the comments section:

It does indeed matter whether the pay raise is at Maccy D only or across the board. If it’s only at McDonald’s then it’s as above. They can’t raise their prices because no one else is and thus prices don’t rise.

If all wages move to $15 an hour then there will be some mixture of job losses (ie, more automation) and price rises.

But the original question was, what happens to Big Mac prices of McDonald’s pays $15 an hour: which is the question I’ve answered.

important point

 

[Widdekind]

Lets spin it the other way. Obama ended bushes tax cut for everyone, also obamacare tax will effect everyone. So tell in your world why is it okay for goverment to take more from workers and they have to do without. The goverment takes our money and a ceo believe or not, earns it. If he didn't the stock holders wouldn't approve his salary.

Shareholders join Obama on CEO pay

who sets executive pay (if not the owners = share-holders) ??

1) The VAST BULK of CEO "pay" increases come from stock equity reflecting their OWNERSHIP of the company. These large stock transfers neither STEAL from worker pay or have anything to do with raising prices on goods. It is an INTERNAL matter of equity.

2) The consolidation of corporations whilst our formerly glorious economy whithers and contracts has CONCENTRATED the CEO pool and EXPANDED CEO responsibility. The CEO of Caterpillar used to just be concerned about a couple plants near Peoria. TODAY -- THIS person runs 24 companies worldwide and about 10 times the cash flow and workforce.

3) The SALARY portion of CEO pay is not really remarkable compared to the short and lucrative careers of sports figures, authors, rock stars and other short-lived careers.

THAT'S why CEOs are not "stealing" from the public or the employees. They are just getting ownership equity transferred to them to reflect their commitment to the effort.

are executives typically paid in stock, or in stock options ??

who sets executive pay ?

according to a naive dumb-muck Libertarian perspective, people who want to influence the way some company "should and ought" to be run, is

(1) to buy, or not buy, their products (indirect influence)
(2) to buy, or not buy, their stock (direct influence, since, naively, stock-holders = owners = bosses = say-so)

anybody who wants to stick their "should-and-ought" hand onto the driver's wheel, of any corporation, already has ample legal lawful means to do so. (E.g. workers get together, and do a "blue-colar buyout", and then, after having earned control of the company, then there-after have some say-so.)

why is that not completely the case ??