Corporate CEOs in America Should Be Paid Less

I will negate the resolution “CEOs in America Should Be Paid Less” by defending the status quo system of CEO pay. Framework:1. In advocating for a change from the Status Quo, Pro needs to advocate for a real world mechanism to uphold the Resolution.a. It is impossible to evaluate hypothetical resolution with no real world mechanism. Decisions are hard because of the complications that come with implementing and acting on them- when we talk about systems of wealth distribution the way systems ACTUALLY function is central to the issue-will it be cost effective or violate rights? These are questions that cannot be answered without knowing implementation.b. Without a real world mechanism this debate becomes about a fantasy world. Pro could propose we decrease CEO pay using a machine that converts salaries into world peace- yes that would prove the resolution true, but only in a fictional sense. We are arguing about the real world, Pro must propose a real world mechanism.2. The “should” in the Resolution implies a normative evaluation. I maintain that the right to self-ownership and freedom entails fundamental property rights. Any proposal by Pro which violates the right to freedom is unethical and therefore does not uphold the resolution. These rights are fundamental and thus come before any other ethical considerations.VOTE CON: Pro has failed to meet these framework criteria; he has not explained how CEO salaries should be decreased. I had every reason to expect him to do so, as the thread he linked in his challenge was full of policies, which he suggested, such as progressive taxes that would decrease the amount CEOs make. Pro alluded to mentioning a “solution” in his opening speech-bringing your central advocacy out in the second round is extremely UNFAIR as it means I had to go my entire opening round without knowing what we would actually debate about. Pro’s Case: 1) Wolves and Sheep Pro offers no warrant to the claim that CEO’s are bad stewards of the companies they own. This claim can be ignored since it is without evidence. Additionally, it is patently false. Look at the history of the S&P500 and it is clear that companies continue to do very well (note: the graph is on a log scale): 2) Pay for Performancea. Non sequitur- it only shows that high performance is motivated by things other than money. Even if this is true, it does not offer any justification for cutting pay. Is Pro really maintaining that because high-performers are motivated by “purpose,” we shouldn’t pay them?b. Pay can be awarded as more than just a motivator. I may be motivated by purpose and autonomy, but if I get a job offer from two companies the benefits offered will be a major factor in my decision. Pay is used to attract and retain talent, it can also be used as a reward3) Obama’s Paycheck Using the POTUS salary as a benchmark to compare CEO salaries is arbitrary and unjustified.a. The argument implies that if the POTUS salary was raised to $50 million, suddenly CEO salaries become more reasonable.b. POTUS salary is set by the U.S. government; it is not subject to free market demands.c. The POTUS position doesn’t have to attract talent through compensation- Obama didn’t have to fend off presidential offers from France with a better benefit package.4) Why is a CEO paid so much?a. Because the Board of Directors decided to pay them that much.Why did the Board of Directors at each individual S&P 500 firm decide on the particular salary and benefits they give their CEO? Only be investigating each CEO, Board of Directors, and company could you answer that question. Determining benefits is hard. At play are competing interests and a wide range of economic and political factors. CEO pay isn’t decided en masse, each benefit package is an individual decision. If Pro thinks this question will decide this debate, he needs to show how each individual pay decision was unjustified.b. The question Pro proposes suggests that CEO’s need to answer somehow for the money they are making, that CEO’s need to face the American people and justify the paycheck they take home. The simple fact is the only people CEO’s need to justify their pay to are the people who actually pay their salaries. If a company wants to pay a CEO an incredible amount of money just for the title of having highest-paid CEO, that is within their right to do so.c. Pro offers no explanation for how this question relates to justifying a decrease on CEO pay. Let us say that most CEOs get paid “too much money” (whatever that means). So what? Pro gives no reason why paying people too much provides a compelling reason to impose a pay restriction. Let’s say I have a neighborhood child shovel my driveway then pay him “too much” by giving him $100; am I violating a normative criteria?d. Pro offers no mechanism for evaluating what the “right” pay is for CEO’s-even if we accept that CEOs who make “too much” ought to be paid less, Pro offers no way to evaluate if they are actually making “too much.” Who gets to decide what the new CEO salary? If Pro doesn’t think CEOs are worth their pay he can start his own company and pay them what he thinks is fair. 5) Pro offers no reason to decrease CEO pay. So what if the POTUS gets paid less? So what if performance is not motivated by pay? So what if some CEOs choose a salary of $1? None of these are compelling normative reasons to artificially impose a constraint on the salary of CEO’s. I contend that most of my opponent’s argument is just him talking about how he doesn’t like how much CEOs are paid. Con’s Case: My position is to support the status quo in which CEO pay is determined freely by businesses. 1) This is the only real world option in this debate, so it wins by default. 2) My position is consistent is consistent with respect for an individual’s freedom and right to property. Any position my opponent takes must necessarily infringe the right to property by restricting how that property may be used in the act of compensation. Per my framework, violations of freedom must be considered before any other issues; I should win this debate on this alone. 3) My position avoids the ethical ambiguity of Pro’s position. It is therefore more coherent and reasonable and should be preferred. Pro’s position requires an assessment to be made of every single CEO paycheck to determine if it is “too much.” His position requires some definition of what a CEO “ought” to be paid. As long as Pro fails to answer these questions his position is untenable, while my position makes these questions irrelevant. 4) Only the free market can determine the value of a CEO.a. Each pay decision is different based on the needs of the company, the financial means of the company, the ability of the CEO, the market value of the position. Only individuals faced with the specifics of their situation can make reasonable decisions.b. Compensation decisions involve risk and assessments of intangibles; the result of a compensation negotiation is therefore dependent on the individuals involved. Whether a Board of directors is risk-averse or desperate for a change in leadership will impact negotiations and the final outcome of CEO pay.5) Restricting CEO pay takes away the ability for companies to make leadership decisions. Capping CEO pay means that a company in desperate need of new leadership wouldn’t have the means to attract a new CEO through extremely competitive benefit packages. It also means that if a sitting CEO was considering leaving, companies could not adjust benefits to retain talent. Note that this is bad from an economic point of view, but it also demonstrates exactly how Pro infringes on freedom and must be absolutely rejected. 6) My position allows for the possibility of some decrease in CEO pay. If a Board determines its CEO is not worth the money, they can cut benefits. Note I am still Negating the resolution with this position- my position is the status quo in which most CEOs will get a raise next year.