Ramblings of Silver Blue


18 Jun

A Word Before I Go.

Virginian-Pilot has an article on how 401(k) plans are being changed.

The problem that I see is two-fold:

(1) The major disparity between CEO and upper management compensation, and the pay levels of the average employee. There is no argument that can hold water as to why an individual at the CEO level is worth hundreds or even thousands of percent more in compensation than the worker who actually keeps the company afloat (and has much more to lose in employment draw-downs) who is struggling to make it on almost poverty pay (which actually, with the increase in fuel costs, insurance costs, housing costs, and food costs, does put them below the poverty level).

While raises for CEOs are common (and quite large — let’s face it, 3% of even 300K is a hell of a lot larger than 3% of 28K), there are times when the peons simply don’t receive raises.

(2) One of the major reasons (even stated in the article by the retired Bell company employee) people choose to work with one company over another is because of benefits. IMHO, if a company is going to start hacking away at health benefits, retirement benefits, or vacation time, they best damn well start compensating the employee in cold, hard cash. So instead of getting $33K plus $3K put in a retirement fund this year, the company should look at paying the employee the $36K up front. Why?

Well, it prevents the company from having to pay for investment managers, managing a retirement portfolio, etc. It also allows the employee to institute their own retirement fund (which, I know, is a pipe dream as expenses rise to meet income).

But the point I’m making is this: companies who are going to do away (or significantly modify) their retirement plans most likely have no intention on increasing the pay of their workers. They’re looking at this “benefit” as just one more thing they can trim or abolish to increase their bottom line.

One Response to “A Word Before I Go.”

  1. 1
    Fritz Says:

    I used to work for a major U.S. retailer.

    The CEO’s salary was about 230 times what I made!

    I now work for a nonprofit hospital.

    The CEO of the hospital makes about twice my annual salary.

    That’s quite a difference, doncha think?

    Think about it. The CEO at the company I used to work for made over 100 times the salary that the CEO of my current employer makes. I KNOW that he didn’t do more work.

    How do these corporate CEOs justify their outrageous salaries?

    The board of directors of these corporations should do prison time for allowing this !

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