This post stems from arguments I often get into about the pay of CEO's running American companies. People like to allege that the GOP's policies while they were in office was the cause of American CEO's being overpaid. I agree in part on one thing: I think the majority of CEO's running US companies are overpaid.
What I do not agree with is that the GOP is responsible for this. The CEO's pay has nothing to do with the GOP. The GOP doesn't decide what the CEO of company XYZ gets paid. Who decides what a CEO gets paid are the shareholders of a company.
But now companies are structured in America such that the shareholders don't have as much power as they used to. Now it is common to have a board set up which (is supposed to) listen to the shareholders of the company and decide amongst themselves how much the CEO makes. Because the board holds the cards, the shareholders don't have as big of an impact as they used to.
Also, people in America have their money managed by someone else. A lot of people in America do this. With someone else managing your money, the investor isn't as engaged in a company as they otherwise would be. The same can be said for someone owning an ETF or ETN stock. With an ETF or ETN, the company who runs the ETF or ETN allocates investor money flowing into the ETF or ETN towards shares of different stock. Again the shareholder is less engaged with respect to the companies that make up the ETF or ETN.
Feel free to voice your opinion.
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