Cyrus Rafizadeh
Cyrus Rafizadeh
Cyrus Rafizadeh





Blog Post

Busting Unequal Pay Myth: CEO Edition

October 22, 2020 Thoughts

Ironically, I saw another “Unequal Pay Myth” infographic on the internet today about CEO’s who are supposedly overpaid (the previous one being about gender/athletes, which was documented in my previous post):

Complaint: “CEOs of multi-billion dollar companies getting paid MILLIONS of dollars — unfair!! 😭”

Explanation: “minimum wage workers are paid proportionally based on their skill, performance, education .. They are NOT able to deliver CEO-grade-results! 🤷‍♂️”

To help illustrate this explanation for people who disagree or cant understand, let’s imagine we own a basketball team and are hiring players .. Why not hire this random minimum wage guy and pay him millions of dollars anyway..? Let’s just give him a chance, right..?

James LeBron substituted by minimum wage worker, let’s give him a shot…

What? You dont want to hire ‘Min Wage Guy’ as the team captain? That’s so discriminatory of you–oh wait, they’re the same ethnicity.. Ok so race clearly isnt a factor 🙄🤣

The point is that people are paid proportional to factors including their skill, performance, education, etc.. Now that you can clearly see the deficiency between physical performance and wages, let’s compare intellectual performance vs wages;

Imagine you wish to retire as CEO of a $100B company you just spent 30 years of your life building, and need to hire a new CEO .. Your company has 10,000 staff who depend on your success for their paychecks, so they can provide for their families .. You also have thousands of shareholders who have invested portions of their life savings, with the hope that your company will continue to grow and the value of their stock goes up, so they can sell their stock and use the money for their retirement. If the company fails, these people will all be *screwed* to varying degrees.

Which person below would you choose as CEO? Let’s pretend we’re going to pay them $100M/year (which is less than 1% of the company’s income):

We need to hire someone who wont bankrupt our $100B company, which to choose 🤔

Note again that compensation has absolutely nothing to do with race or colour, as the options are mixed. Straight off the bat, you feel the ‘Min Wage Guy’ is grossly underqualified and have probably very little confidence in his ability to manage your $100B company. Exactly.

In conclusion: it’s pretty clear to see that markets and industries naturally pay people based on their skill, performance, education, and other relevant factors.

Note that there is absolutely NOTHING stopping ‘Min Wage Guy’ from turning himself into a multi-million CEO, if the willpower/commitment is there.. He just chose not to pursue that path — yet!

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