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View Poll Results: Should consistently profitable Indian automobile companies drastically increase wages of workers?
Yes. Increasing wages reduces inequality and improves relationship between workers and management. 198 53.66%
No. Employee wages should depend on supply (availability of cheap labour) and demand. 113 30.62%
Can't say/ don't know 58 15.72%
Voters: 369. You may not vote on this poll

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Old 28th August 2019, 14:34   #121
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Re: Analysis: CEO/MD pay, median salaries & worker wages in the Indian automobile industry

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Originally Posted by civic-sense View Post
Only those who own the company should have a say. Employees are like tools and machinery. They don't deserve the profits, nor do they share the burden in case there are losses. They can't have a say on how the company is run.
As some other members have already alluded to, a remarkable view, to say the least. If anything, it is factually incorrect.

Employees, under many jurisdictions around the world, do have a certain say in how companies are run. An example; Ryanair wanted to close down one its crew bases in the Netherlands, in this case Eindhoven airport. They claimed economic reasons, which is legal speak in such matters meaning it was costing them money to operate from Eindhoven.

The involved employees took exception, as it would have meant moving to a new location. It ended up in court and the court ruling, including first appeal have favored the employees point of view. Ryanair needs to maintain this base. They can not shut it down!

In general, organizations such as employee works councils have been a well established phenomena for decades. In many cases the formal role and responsibilities are mandatory and regulated by law. So a company/employer, has a formal obligation to inform and or seek approval from employee works councils on specific topics.

A works council is not a union by the way. They also represent employees of course. Again, in many countries across the world the roles and responsibilities of unions are regulated by law. Similar as to works councils, the company (i.e. the employer) has an obligation to inform unions and to seek formal approval from them. (e.g. laying off staff for instance, hiring for instance.

I lived and worked as the CEO of a fairly large service company in the USA for three years. So I became familiar with the American Unions as well. They have considerable influence and formal say in certain aspects on how the company is run. Just a small example, when it comes to promotions, it is the Union who decides, not necessarily management. Same on who gets what training / development plans.

As pointed out, companies and their decisions are heavily influenced and sometimes formally/legally impacted by all stakeholders. Public opinion being a very potent one these days.

Another very concrete example. I might have mentioned it before on this thread. About a year ago the board of ING wanted to increase the CEO salary by big amount / percentage. Legally, they could do so, it is their formal responsibility and they also have the formal, legal, mandate to do so.

However, public opinion in the west is becoming more and more weary of big salaries, let alone big pay rises of CEO's. Especially, those of the financial and banking industry. We all remember the last crisis and the role banks played in that.

As soon as the ING board intention on raising the CEO salary hit the press a huge public outcry happened. Everybody was all over this. Member of parliaments, including the prime minister, every facebook group, daily interviews on the TV and Radio. ING employees were appalled, as they had no or very little salary increase over the last years. Within a few weeks the ING board caved in to public pressure and withdrew its salary increase proposal. To date the CEO is still on the same salary, no changes.

So all stakeholders, including employees, have certain formal/legal/regulated and informal tools at their disposal to influence company policy and decisions.

The world is changing fast. And even the position and interest of shareholders / owners is changing. Check it out:

https://www.cnbc.com/2019/08/19/the-...objective.html

Whether you like it or not, approve of it or not, this is how the world runs. And successful managers/companies will be able to deal effectively and constructively with all their stakeholders.

Jeroen

Last edited by Jeroen : 28th August 2019 at 14:36.
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Old 28th August 2019, 14:55   #122
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Re: Analysis: CEO/MD pay, median salaries & worker wages in the Indian automobile industry

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Originally Posted by civic-sense View Post
A century ago, there weren't any machinery, only workers. A century from now there won't be any workers, only machinery. Guess leftists will be campaigning for robot rights, then.
That does seem to be the way in the future- automation to cut costs.

Let's say a nation comprises of 20-30% high skilled citizens who get to bargain their salary while the rest lives on wages whose jobs are increasingly becoming redundant.

Now who will buy the products/services? Then comes the argument of UBI, so who is going to decide how much each citizen/family is to get per month?
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Old 28th August 2019, 16:41   #123
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Analysis: CEO/MD pay, median salaries & worker wages in the Indian automobile...

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Originally Posted by ramzsys View Post
That does seem to be the way in the future- automation to cut costs.

Let's say a nation comprises of 20-30% high skilled citizens who get to bargain their salary while the rest lives on wages whose jobs are increasingly becoming redundant.
When thinking about automation and the pro's and cons I would prefer a much broader approach then just looking a automation related redundancies. There are many other factors that need to be considered.

Simply put, the world employs a hell of a lot more people today than 100 years ago. Despite phenomenal levels of automation in just about every industry around the world. Some of the big contributors on total numbers of jobs has of course to do with economic growth and expansion of the world population. Although there are always some ups and downs the forecast on both is still upwards!

Do not get me wrong; if you lose your job/income due to automation, you have my deepest sympathy. It must be pretty devastating on an individual level and for your immediate family and close ones.

More so, very often it is relatively simple, low skills type of jobs that get automated. And very often, people in those jobs are less likely to easily find another job any time soon. The impact on not getting a weekly/monthly income is huge.

It has of course been pointed out that very often automation does create new jobs, typically higher skilled, better educated roles. Although the net result is very often that a larger number low skill roles disappear than high skill roles appear.

What gets less attention is a whole different level of automation that has making its way in just about industry. Whereas a lot of people talk about automation taking away jobs, we are also seeing automation helping, doing stuff no human (or group of humans) could be doing. Anywhere where you see the need for crunching huge data sets, recognizing patterns, analyzing correlations etc. humans simply can not do it. And again, this sort of automation be it in research, design or production, or in services, again requires very skilled human oversight. New job roles have been popping up over the last five years, data scientist, data engineers, data analyst.

Without very advanced automation techniques such as AI and ML these jobs would not exist and neither would some of the products and or services it ultimately delivers, would be feasible.

In my own world, Telecom, in order to really optimize a 5G network you need a very advanced set of automation tools, a highly skilled and agile set of people, new processes and a very different organization structure. You can try compare that to how it is / was done on a 2G network, but you are comparing apple to pears.

Whereas I fully recognize that automation for certain job roles could be a real threat, overall I am very positive towards the potential of automation, and how it can make an overall positive contribution to society at large.

The world has automated the heck out of everything already for the last hundred years. And yes, you can think of plenty negative examples. But in general the last century has seen unprecedented levels of growth in what I would call general individual well being in most countries around the world. It's to simplistic to think automation was the decisive factor in that increase, but it has certainly played a major role.

But all along one thing has always been a key element. Continuous education, available to all, with low entry and or financial barriers. Education will not make you keep your job, if it is automated. But it will ensure you are still employable in other jobs at short notice. Truth is, many people are losing jobs today, not because their role is being automated. They are losing out, because they do not or can not keep themselves up to date when it comes to professional knowledge.

Lack of proper education, low entry barriers, is a far bigger problem than some of the negative effects of automation.

Societies are changing transforming at an increasing pace. Automations plays a role in that, with pros and cons. What is the key question what do you do as a society to keep everybody participating in such a rapidly changing environment. I am convinced that one of the key enabler is education for all. When it comes to jobs, it is not about automation, it is about employability and how to ensure that is part of everybody's working life.

Jeroen

Last edited by Samurai : 28th August 2019 at 17:33. Reason: typo
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Old 29th August 2019, 11:52   #124
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Re: Analysis: CEO/MD pay, median salaries & worker wages in the Indian automobile industry

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Originally Posted by Jeroen View Post
As some other members have already alluded to, a remarkable view, to say the least. If anything, it is factually incorrect.
There can't be anything factually incorrect in an opinion. It is my opinion that other than the shareholders and those whom they decide to give the power to, nobody else should have a say on how a private company should be run. That's all.
Quote:
Whether you like it or not, approve of it or not, this is how the world runs.
There are a million things that happen around the world that I do not like and I cannot change. I am sure you too are on the same boat. But that does not mean that any opinion I hold, that goes against popular opinion, are worthless. In a different issue or era we would have switched sides.

So, peace!
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Old 29th August 2019, 13:59   #125
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Re: Analysis: CEO/MD pay, median salaries & worker wages in the Indian automobile industry

Quote:
Originally Posted by civic-sense View Post
A century ago, there weren't any machinery, only workers. A century from now there won't be any workers, only machinery. Guess leftists will be campaigning for robot rights, then.


No time for strawmans mate.
The industrial revolution happened well over a century ago.
Robots have also existed for quite some time. And in this thread you are the only one talking about robot rights.



Secondly workers rights are a common theme in successful capitalist economies. For example I can break a plier but breaking a human (even a tool employee) will have dire consequences in successful capitalist nations. Ironically it was the communist leftist states where employees were actually more expendable than machinery.

Last but not the least I am sure in all countries you have more rights than let’s say a 10mm socket (though many may argue the latter provides more value)

So the whole argument of employees are just tools and machinery does not seem rooted in reality.

Now coming to opinions about what should be I agree with you. We all are entitled to our opinions. And others are just as entitled to consider those opinions repulsive or distasteful.

That said I do consider you opinion to be a bit odd

Last edited by tsk1979 : 29th August 2019 at 14:03.
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Old 29th August 2019, 18:42   #126
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Re: Analysis: CEO/MD pay, median salaries & worker wages in the Indian automobile industry

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Originally Posted by tsk1979 View Post
Secondly workers rights are a common theme in successful capitalist economies. For example I can break a plier but breaking a human (even a tool employee) will have dire consequences in successful capitalist nations.
My comment should be read in the context in which it was written. We were talking about who should be allowed to have a say in the running of a company. I did not say that being an employee strips him of his basic human rights.
Quote:
Now coming to opinions about what should be I agree with you. We all are entitled to our opinions. And others are just as entitled to consider those opinions repulsive or distasteful.
Sure. But if I find somebody else's opinions repulsive, maybe I need to change, but definitely not him.

Last edited by civic-sense : 29th August 2019 at 18:45.
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Old 29th August 2019, 22:35   #127
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Re: Analysis: CEO/MD pay, median salaries & worker wages in the Indian automobile industry

On a forum like Team BHP disagreements will often arise. It is up to each of us to either view a difference of opinions as an opportunity to learn or as an occasion to win an argument no matter what by arm wrestling it to the last molecule.
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Old 30th August 2019, 10:50   #128
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Re: Analysis: CEO/MD pay, median salaries & worker wages in the Indian automobile industry

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Originally Posted by civic-sense View Post
There can't be anything factually incorrect in an opinion.
Really? If I have an opinion that the Sun goes round the Earth, will you say there is nothing factually incorrect in my opinion? Anybody can have an opinion, sure. But, opinions can be wrong or right. Therefore, one needs to justify one's opinion in public or keep it to oneself.
Quote:
Originally Posted by civic-sense View Post
It is my opinion that other than the shareholders and those whom they decide to give the power to, nobody else should have a say on how a private company should be run. That's all.
You seem to have been convinced that somehow shareholders means those who have contributed money to the company. What about those who contribute time and effort? Is time and effort less than money in some convoluted manner?
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Originally Posted by civic-sense View Post
But that does not mean that any opinion I hold, that goes against popular opinion, are worthless.
As far as I can see in this thread, nobody even remotely implied that your opinions are worthless. In this post, all I am saying is that your opinion might be unjustified. (Why should money be greater than time and effort?)
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Originally Posted by civic-sense View Post
So, peace!
I do not see any war.
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Old 30th August 2019, 15:29   #129
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Re: Analysis: CEO/MD pay, median salaries & worker wages in the Indian automobile industry

It is an open secret and agreed to in hushed tones in the best management institutes of the world that Democracy is a dirty word in management. Anyone who thinks otherwise should run a democracy not a company.

Let's just take one example - that of the most successful company in the world currently - Apple. It's most successful years were from 2001 till Steve Job's passing away and he ran the company like his fiefdom.

Take any company that is or was hugely successful - you will find a correlation between its period of success and a leader who ran it without getting too many opinions from others (GM - Lee Iacocca, Amazon - Bezos, Berkshire - Warren Buffet, VW - Piech, Tesla - not financially successful yet but clearly a leader and some others - other than these, the only other companies that are successful and large are petroleum companies).

Closer home - during the peak glory days of Infosys - MN even decided on the colour of fabrics used on furniture while outwardly exemplifying a pluralistic management culture.

Most of the guys who built successful businesses didn't do so by putting into practice tips from IIM or other management institutes around the world. Bill Gates and Steve Jobs were drop outs from college and have built two of the most successful companies in the world.

Steve Jobs did everything they teach you NOT TO DO in management institutes. (And just in case anyone thinks that I am running down management institutes because I don't have a management qualification, I have a qualification from IIM - but I don't think too much of that qualification).

So to get back - while the following quote may not be couched in politically correct language it is a partial home truth that most would love to decry by quoting texts and studies.

I would however modify it slightly:

From:

Quote:
Originally Posted by civic-sense View Post
Only those who own the company should have a say. Employees are like tools and machinery. They don't deserve the profits, nor do they share the burden in case there are losses. They can't have a say on how the company is run.
To

"Only those who are stakeholders in a company should have a say in running a company. Some employees do contribute a lot more than tools and machinery and some contribute a lot less. Depending on their ability to contribute, stock options are an option but they serve only to increase retention levels rather than increasing productivity / creativity. Employees can contribute ideas to their level of expertise which may or may not be adopted by the management."

Anyway the simple truth is if you're following management practices and theories followed by others you will be an ALSO RAN. Yes, it's politically incorrect to say all of this and it sounds so much better when one quotes from management texts and studies. Look at those who don't follow any of that and still succeed and you'll probably know where to start.

Read that last line again.
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Old 20th January 2020, 16:09   #130
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Re: Analysis: CEO/MD pay, median salaries & worker wages in the Indian automobile industry

Evil Capitalist America (around 260) has the worst CEO to worker wages ratio, followed right behind by Noble Socialist India (around 240).

Analysis: CEO/MD pay, median salaries & worker wages in the Indian automobile industry-ceopay.jpg

However, all countries in the list (except India and China) are developed countries with GDP per capita in excess of $30,000. Average Chinese CEO remuneration ($2.1 million) is only slightly higher than average Indian CEO remuneration ($1.9 million), but Chinese CEO pay to median worker pay is much better than India at around 120 levels.

Note: The data is from companies listed on major equity indices (Eg: NIFTY50, S&P500, FTSE100 etc)

Last edited by SmartCat : 20th January 2020 at 16:11.
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Old 20th January 2020, 18:42   #131
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Re: Analysis: CEO/MD pay, median salaries & worker wages in the Indian automobile industry

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Originally Posted by SmartCat View Post
Evil Capitalist America (around 260) has the worst CEO to worker wages ratio, followed right behind by Noble Socialist India (around 240).

Attachment 1958838

However, all countries in the list (except India and China) are developed countries with GDP per capita in excess of $30,000. Average Chinese CEO remuneration ($2.1 million) is only slightly higher than average Indian CEO remuneration ($1.9 million), but Chinese CEO pay to median worker pay is much better than India at around 120 levels.

Note: The data is from companies listed on major equity indices (Eg: NIFTY50, S&P500, FTSE100 etc)
SmartCat clearly you were feeling restless:-) and clearly Jefferies has a shortfall of mandates and time on their hands. Nifty 50 sounds like too tiny a population to base a judgement on. Why not the India Forbes 500. That would give a more credible picture whatever the ratio comes to. Greed aside fact is there is a dearth of highly competent CEOs capable of running a billion $ plus company in India and tripping over themselves to get here. India & China are incredibly difficult geographies to be a leader in -India being the worse of the two. Some of what we see here is, in India's context, demand vs supply of leadership talent. I agree that all should get a fair wage, all should get a minimum wage and if a comparison has to be made it should be between the remuneration of all in the CXO suite with the median in the company. The CEO by definition is an outlier.
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Old 20th January 2020, 19:03   #132
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Re: Analysis: CEO/MD pay, median salaries & worker wages in the Indian automobile industry

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Originally Posted by V.Narayan View Post
and clearly Jefferies has a shortfall of mandates and time on their hands.
Actually, Jefferies CEO pay was in the news recently

Is Jefferies Financial Group Inc.'s CEO Overpaid Relative To Its Peers?
https://finance.yahoo.com/news/jeffe...154407084.html

Quote:
has to be made it should be between the remuneration of all in the CXO suite with the median in the company. The CEO by definition is an outlier.
All listed Indian companies mention CXO remuneration on their annual report. From what I've seen, CXO salaries will be roughly half of CEO salary.

Last edited by SmartCat : 20th January 2020 at 19:05.
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Old 20th January 2020, 20:28   #133
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Re: Analysis: CEO/MD pay, median salaries & worker wages in the Indian automobile industry

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Originally Posted by V.Narayan View Post
Some of what we see here is, in India's context, demand vs supply of leadership talent. I agree that all should get a fair wage, all should get a minimum wage and if a comparison has to be made it should be between the remuneration of all in the CXO suite with the median in the company. The CEO by definition is an outlier.
Are you saying people talented enough to play CEO are motivated only by money and not the challenge of it?
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Old 20th January 2020, 20:44   #134
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Re: Analysis: CEO/MD pay, median salaries & worker wages in the Indian automobile industry

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Originally Posted by Samurai View Post
Are you saying people talented enough to play CEO are motivated only by money and not the challenge of it?
It has to be a fair mix of both. Keep in mind the risks he/she carries and the results that are expected. Where is the assumption that money is the sole motivator.
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Old 21st January 2020, 09:46   #135
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Re: Analysis: CEO/MD pay, median salaries & worker wages in the Indian automobile industry

Lets call this call for capping CEO compensation for what it is. Price fixing. And like all price fixing schemes its going to have the same results. Distortion of markets resulting in Glut/Shortages. Sadly in the case of some it ends up in suicide like our country's farmers. But hey as long as intentions are all good, that is all what counts for many.

With regards to the classic American CEO to worker pay discrepancy, there are many other factors at play here. Some just whine and regurgitate talking points about how it has exploded since 1970s without a single second thought.
*Firstly the companies themselves are much larger in scale than they were since 1970s. The Asian tigers, China, India opening up their economy means the top CEO is taking on a much bigger task than the average guy stocking the shelf at the retail store.
*Secondly the comp package of these CEOs also include stock options. And when you have an over inflated stock market like you see in US caused by comically low interest rates and money printing by the Central Bank, the bigger the bubble the bigger the on paper comp package of the CEO.

If you can bother to look past the standard 3*5 index card talking points of the media, you can clearly see that most of today's so called capitalist economies are not even remotely close to being anything of that sort. The Central Banks price fixes the price of money, a.k.a interest rates and have caused exactly the same results i have said in my first para. Massive distortions in the market, Bubbles in real estate, stock markets..etc that blow up and pop every decade, stagnant wages for some and over-inflated wages for others, rising prices of goods and commodities.
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