Market Bumps and Bonuses
Pay hikes for the business elite are hitting mid-level workers where it hurts, drumming up a political storm that could catch investors. With CEOs enjoying 1000% pay rises over the past 40 years, do you really need the skills to pay the bills?
As the custodians of our invested money, a management team is central to a good stock pick, and investors know it! Shareholders agonize over what their CEOs are made of, preferring those with skin the game, personally owning some of the company’s shares. The right c-suite of executives can make all the difference. Some have changed the world, saving billions of dollars from the brink in the process.
However, everything has a price, and a new survey from the Economic Policy Institute has America questioning whether CEOs are worth 278 times the average worker, as new pay gap figures suggest. Salaries at the top have left mouths agape since accelerating with the dot com boom in the late 90s, and pressure is building to tax firms deemed to have gone overboard. This matters to the market because it would hurt stocks far more than a tax levied against the head honchos themselves.
The stock market can put forward any number of fierce critics of change. The main retort to a paycheck pullback is that high salaries entice the best of the best, who then create oodles of value to be eventually passed onto the masses in the “big system.”
The bottom line? Not bad for your boss’s boss right now! Arguments don’t rewrite pay slips, only new policies do. However, with a billionaire in power, the US may have chosen the wrong time and the wrong White House to have this conversation. If the gap widens, however, something has to give!