5 ms·

CEOs beware: Your astronomical salaries may soon cost you customers

23 points by brianclements 11y ago

Qantourisc 11y ago
Won't they just be creating a new company to siphon the money trough ?
jensen123 11y ago
Yet another clickbait headline. Further down in the article, it says: "Of course, people tend to show more moral gumption in surveys than they do in real life. In part this is because we are dealing with hypotheticals (who isn’t against child labor, in principle?). But also, people don't usually ponder issues of inequality while they’re buying their milk and groceries."
- thaumasiotes 11y ago
  > who isn’t against child labor, in principle? Tons of people. They need their children's income.
  - misframer 11y ago
    Maybe in practice, but in principle?
    - thaumasiotes 11y ago
      Seriously, virtually no one is against child labor in principle. What people are against is bad jobs. Microsoft didn't put much effort into complying with child labor law (and was therefore generally in violation) because the parents of the children it employed viewed working at Microsoft as beneficial.
- TeMPOraL 11y ago
  RE value of polls, there's this quote I love: "[A]s of 2010, only 34% of people polled strongly supported letting homosexuals serve in the military, but half again as many — a full 51% — expressed that level of support for letting ‘gays and lesbians’ serve in the military. Ever since reading that I’ve worried about how many important decisions are being made by the 17% of people who support gays and lesbians but not homosexuals." http://slatestarcodex.com/2015/04/15/trouble-walking-down-the-hallway/ http://slatestarcodex.com/2015/04/15/trouble-walking-down-th...
  - crdoconnor 11y ago
    There's a similar gulf between people who support "more government assistance for people on low incomes" (popular) and people who support "more welfare" (unpopular). I think certain words are given negative/positive associations by the media and those overtones have a lot more impact if you're only spending 4 seconds per question than if you're really thinking about it.
    - tsotha 11y ago
      >There's a similar gulf between people who support "more government assistance for people on low incomes" (popular) and people who support "more welfare" (unpopular). Those are not the same thing, though. Someone with a low income has a job, presumably.
      - deleted 11y ago
        [deleted]
      - crdoconnor 11y ago
        Actually it was "government assistance for the poor" - not low incomes - that rated highly on polls, which presumably includes people without jobs. My mistake.
x5n1 11y ago
I always take $1 as a CEO to show my commitment to taking out all my money with stock options and dividends.
- tluyben2 11y ago
  Not sure if that's sarcasm or not and I know that usually appears only in the news about CEO's who get millions that way anyway, but the CEO's of (usually smaller) companies that have the same compensation plan often just get nothing ($1) when they didn't perform because there simply was no profit (so no dividends) and no-one would buy (parts of) shares because they are down (if the company is publicly trading that is quite a bit more complex). So that seems a far more fair way of compensating and paying out millions for the risk.
PhantomGremlin 11y ago
Last year, Tim Cook's salary plus bonus was $9 million. But his total compensation was $65 million.[1] So what? Why should I care? That's up to the Apple board to work out with him. I'm still buying Macbooks and iPhones and iWhatevers for as long as I think they're superior to the competition. [1] http://www.bloomberg.com/news/articles/2015-04-17/tim-cook-s-65-million-pay-is-best-deal-among-top-paid-u-s-ceos http://www.bloomberg.com/news/articles/2015-04-17/tim-cook-s...
glenra 11y ago
Much of this can be accounted for by the simple fact that the companies have gotten bigger. Top CEOs are in charge of more people than ever before. Walmart has 1.4 million employees; if their CEO makes $35 million that's $25 per employee per year - a penny or so per hour per employee. If a good CEO's decisions can make the average employee more productive (or less unproductive) by even few cents per hour of employment, he's worth that magnitude of salary when working for a company that big. If we highlight the CEO-to-employee multiple, companies could game the metric by splitting into smaller companies that are slightly less efficient. For instance, there could be separate regional chains called "Walmart West" and "Walmart East", each with their own CEO who gets paid half as much for doing half as much work. They could even both hire the same guy and have him work both jobs at once, thereby reducing to a previously-solved problem! Or they could actually hire two distinct CEOS, which benefits the employees not at all - in fact, the employee situation might be made worse in various ways by the change - but at least the multiple would officially look smaller so: yay?
- Spooky23 11y ago
  Headcount isn't really relevant. My dad was a director (mid level manager) of a government org with something like 1,500 direct reports. He probably made the equivalent of $120k today. I think the salary differential between that gig and a line manager was 30-40%. I manage a big IT organization, manage a huge budget, 50 engineers. I make less than 5x the lowest paid employee. My boss's boss maybe 40% more than me. The corruption of governance and a sense of entitlement fuels CEO salaries. End of the day, the CEO of WalMart doesn't deliver $35M of value. His decisions have big impact, but there are dozens of people who can make those decisions, and many could do so for far less.
  - brianclements 11y ago
    Curious what you think about why boards aren't incentivized to reign in CEO salaries. Is it because they all sit on each other boards?
    - Spooky23 11y ago
0x49 11y ago
Im really curious why this matters to so many people. It only matters if you own part of the company and if this is the case, you most likely took part in the decision making process that gave the ceo this dalary.
- pm24601 11y ago
  Because humans are values-driven, and humans make decisions based on their values. Buying from a company that does not reflect their values is contradictory. The way to reconcile the conflict is with saving money ( and justifying that saved money as a future donation ) OR not shopping at the store that does not match their values. I for one will never shop at Walmart - no matter how cheap it is.
v4n4d1s 11y ago
What if every employee has a decent salary (70k+) and the ratio is still very high?

23 points by brianclements 11y ago

Won't they just be creating a new company to siphon the money trough ?

Yet another clickbait headline. Further down in the article, it says: "Of course, people tend to show more moral gumption in surveys than they do in real life. In part this is because we are dealing with hypotheticals (who isn’t against child labor, in principle?). But also, people don't usually ponder issues of inequality while they’re buying their milk and groceries."

thaumasiotes 11y ago
> who isn’t against child labor, in principle? Tons of people. They need their children's income.
- misframer 11y ago
  Maybe in practice, but in principle?
  - thaumasiotes 11y ago
    Seriously, virtually no one is against child labor in principle. What people are against is bad jobs. Microsoft didn't put much effort into complying with child labor law (and was therefore generally in violation) because the parents of the children it employed viewed working at Microsoft as beneficial.
TeMPOraL 11y ago
RE value of polls, there's this quote I love: "[A]s of 2010, only 34% of people polled strongly supported letting homosexuals serve in the military, but half again as many — a full 51% — expressed that level of support for letting ‘gays and lesbians’ serve in the military. Ever since reading that I’ve worried about how many important decisions are being made by the 17% of people who support gays and lesbians but not homosexuals." http://slatestarcodex.com/2015/04/15/trouble-walking-down-the-hallway/ http://slatestarcodex.com/2015/04/15/trouble-walking-down-th...
- crdoconnor 11y ago
  There's a similar gulf between people who support "more government assistance for people on low incomes" (popular) and people who support "more welfare" (unpopular). I think certain words are given negative/positive associations by the media and those overtones have a lot more impact if you're only spending 4 seconds per question than if you're really thinking about it.
  - tsotha 11y ago
    >There's a similar gulf between people who support "more government assistance for people on low incomes" (popular) and people who support "more welfare" (unpopular). Those are not the same thing, though. Someone with a low income has a job, presumably.
    - deleted 11y ago
      [deleted]
    - crdoconnor 11y ago
      Actually it was "government assistance for the poor" - not low incomes - that rated highly on polls, which presumably includes people without jobs. My mistake.

x5n1 11y ago

I always take $1 as a CEO to show my commitment to taking out all my money with stock options and dividends.

tluyben2 11y ago
Not sure if that's sarcasm or not and I know that usually appears only in the news about CEO's who get millions that way anyway, but the CEO's of (usually smaller) companies that have the same compensation plan often just get nothing ($1) when they didn't perform because there simply was no profit (so no dividends) and no-one would buy (parts of) shares because they are down (if the company is publicly trading that is quite a bit more complex). So that seems a far more fair way of compensating and paying out millions for the risk.

PhantomGremlin 11y ago

Last year, Tim Cook's salary plus bonus was $9 million. But his total compensation was $65 million.[1] So what? Why should I care? That's up to the Apple board to work out with him. I'm still buying Macbooks and iPhones and iWhatevers for as long as I think they're superior to the competition. [1] http://www.bloomberg.com/news/articles/2015-04-17/tim-cook-s-65-million-pay-is-best-deal-among-top-paid-u-s-ceos http://www.bloomberg.com/news/articles/2015-04-17/tim-cook-s...

glenra 11y ago

Much of this can be accounted for by the simple fact that the companies have gotten bigger. Top CEOs are in charge of more people than ever before. Walmart has 1.4 million employees; if their CEO makes $35 million that's $25 per employee per year - a penny or so per hour per employee. If a good CEO's decisions can make the average employee more productive (or less unproductive) by even few cents per hour of employment, he's worth that magnitude of salary when working for a company that big. If we highlight the CEO-to-employee multiple, companies could game the metric by splitting into smaller companies that are slightly less efficient. For instance, there could be separate regional chains called "Walmart West" and "Walmart East", each with their own CEO who gets paid half as much for doing half as much work. They could even both hire the same guy and have him work both jobs at once, thereby reducing to a previously-solved problem! Or they could actually hire two distinct CEOS, which benefits the employees not at all - in fact, the employee situation might be made worse in various ways by the change - but at least the multiple would officially look smaller so: yay?

Spooky23 11y ago
Headcount isn't really relevant. My dad was a director (mid level manager) of a government org with something like 1,500 direct reports. He probably made the equivalent of $120k today. I think the salary differential between that gig and a line manager was 30-40%. I manage a big IT organization, manage a huge budget, 50 engineers. I make less than 5x the lowest paid employee. My boss's boss maybe 40% more than me. The corruption of governance and a sense of entitlement fuels CEO salaries. End of the day, the CEO of WalMart doesn't deliver $35M of value. His decisions have big impact, but there are dozens of people who can make those decisions, and many could do so for far less.
- brianclements 11y ago
  Curious what you think about why boards aren't incentivized to reign in CEO salaries. Is it because they all sit on each other boards?
  - Spooky23 11y ago

0x49 11y ago

Im really curious why this matters to so many people. It only matters if you own part of the company and if this is the case, you most likely took part in the decision making process that gave the ceo this dalary.

pm24601 11y ago
Because humans are values-driven, and humans make decisions based on their values. Buying from a company that does not reflect their values is contradictory. The way to reconcile the conflict is with saving money ( and justifying that saved money as a future donation ) OR not shopping at the store that does not match their values. I for one will never shop at Walmart - no matter how cheap it is.

v4n4d1s 11y ago

What if every employee has a decent salary (70k+) and the ratio is still very high?