Fun With Math#1

The typical large company CEO we've been told makes 500 times more money than us. This person does not own the company. The CEO has been selected by a board of directors who - in turn - were elected by the shareholders. The shareholders are the owners of the company.

So we have a narcissist with an over-inflated sense of self-worth who thinks he's more important and productive than 500 people. Who cares?

Not so fast, grasshopper.

Instead of thinking in terms of replacing people let us view this in terms of raises.

Raises?

The target rate of inflation for central banks is 2%.

So?

That one CEO salary equals cost of living raises for 25,000 workers.

A measly 2%? Who cares?

If you apply compounding to that measly 2% over 20 years we end up with a roughly 50% erosion of earnings.

What?

Your CEO is costing you more than you think.

But he's got such nice hair!