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How are CEOs shielding themselves from risk while still benefiting from the gains? And how is that legal? Seems like some sort of scam.
by lumberjack 10y ago
How are CEOs shielding themselves from risk while still benefiting from the gains? And how is that legal? Seems like some sort of scam.
- VLM 10y agoThere's at least three levels of answer The first level is its just political sloganeering. The next level is they're contract jobs and the pay is high enough to be F-you money if they fail and via the magic of survivorship bias we never hear about those that fail, although they and their kids are the trust fund babies that explode inflation while producing nothing of value other than CO2. The next level of analysis past that is a matter of scale. I can independently afford food and housing and medical care for my kids, maybe not the best but I'd be OK. If my business fails, no biggie, I just won't buy an ocean going sailboat in the 10+ meter range, we're still going to be OK. Someone lower on the socioeconomic totem pole tries to start a business and fails, or gets downsized from his good job, his wife has to leave him to get herself and the kids on the programs or they'll literally starve, that means she'll get the house, its the end of that dudes life, perhaps literally. Certainly its an economic death penalty even if he physically survives or if by some miracle his family survives intact. So the risk is a bit asymmetric because unless you magically have total equality in income, wealth, education, social connections, you're going to have people who will literally die if they lose $5K and others who can shrug off half a mil or more.