Few financial decisions are as vibes-driven as CEO pay. How much is too much is mostly a question of who’s counting and what it’s measured against. Starbucks, for example, is paying new boss Brian Niccol a potential $145 million package that, at first glance, seems like the boardroom equivalent of a venti caramel ribbon crunch Frappuccino.
Niccol faces the difficult job of turning around a $100 billion coffee chain stuck in a sales slump. Unsurprisingly, his compensation, opens new tab is generous. It starts with an $8.8 million shot of cash if he and the company exceed specific performance targets. He also gets $85 million just for joining, mostly replacing stock awards he surrenders by quitting as CEO of Chipotle Mexican Grill.
Then there’s a share-based bonus: $23 million annually if he hits his targets. If he does really well, Starbucks could triple 60% of that amount, taking the sum to $51 million, assuming the awards are structured like this year’s long-term executive bonuses, which are amplified if goals like sustainability and talent retention are met, based on the company’s annual proxy filing. His replacement stock award could also multiply in certain circumstances.
Would such a windfall really be so sickening? A barista might say so. The sum is roughly 10,000 times more than the median Starbucks employee earns. Unlike most of his subordinates, Niccol also gets to work from a remote office in sunny Newport Beach, California.
I’m not a barista and I say it’s sickening.
Just to throw the rich a bone, if I ran the world, every single cent you owned above, say, $50 million gets taxed at 99%.
The thing is, it’s not even necessary to be this drastic. Feel free to start negotiating from this point (tax all wealth above $50 million) but even settling for a 2% tax on wealth above $1 billion would be good. You can ease into it with a 1% tax on wealth above $100 million.
This wouldn’t really affect the living standard of anyone wealthy enough to be taxed. Interest on invested assets will pay the tax easily. That’s what Biden meant by “nothing will fundamentally change” for the wealthy.
If you have $1 billion you will probably be living off of $40 million in interest per year. A 1% tax would mean $9 million of that is taken as wealth tax (plus there will be some other income or capital gains tax). You will be fine.
That might still leave then enough surplus to accumulate the capital needed to buy your voters and vote you out.