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Barclays CEO pay slashed after he tried to identify whistleblower

90 points by mathattack 10y ago

jaclaz 10y ago
... but no (slight) slap on the hand, and not even going to bed without dinner ...
adrenalinelol 10y ago
Poor guy... he only made $5.2 million...?
- inetknght 10y ago
  His mistake was not working as a CEO in the USA... everyone knows CEOs there make hundreds of trillions of dollars. /s
YPCrumble 10y ago
This is a good example of why CEO pay is wrong. In any normal job, if your salary gets "slashed", you quit your job. Doesn't this undermine the argument that CEOs need outrageous salaries to be incentivized to work, if you slash their salary, and they keep working?
- bmmayer1 10y ago
  "CEO pay is wrong" What does this mean? Paying CEOs is wrong? The pay that all CEOs get is wrong? The pay that some CEOs get is wrong?
  - frgtpsswrdlame 10y ago
    Most CEOs are dramatically overpaid.
    - dsacco 10y ago
      Overpaid relative to what? Your estimation of perceived value? What do you define as value? How would you even begin to empirically establish what you're saying? Executive compensation is a construct of market consensus, not an absolute based on individual performance. The tangible value contributed by chief executive staff is one component of the compensation package, and what is valuable to the board or shareholders in aggregate may be utterly dissimilar to what you'd consider valuable. Your premise in why an executive should be paid is probably different from the premises used by those who actually choose what the executive will be paid. The difficulty in finding an appropriate candidate, the risk of their having to publicly "fall on the sword" for the company, their contributed value, their particular skills/culture match, their years of experience, their network of available connections, etc all play a part in determining the compensation. And what's more, you may not measure each of these things with the same respective weighting or definition that the company would. This is to say that you can arbitrarily say that executives as a class are overpaid, and I can arbitrarily say they're underpaid. You're free to propose a new compensation model, but for better or worse, most boards and shareholders seem fine with the status quo. Given that, it's not very productive to make a blanket statement about them being over or under-compensated if we can't establish that we're all working from the same set of premises. You'd have about as much rigor in claiming that TSLA is overvalued relative to GM. Sure, you might be right, but 1) why listen to you rather than, say Zacks and 2) what makes your model of compensation more valid, when you have to surmount the burden of not just correctness but market consensus?
      - RodericDay 10y ago
        I'm honestly baffled every time a free market zealous believer goes around saying "nothing is unfair! the market, by definition, makes everything fair!" What is it going to take to make statements like "bosses are making too much money compared to their workers" popular again, so that people can actually mobilize and enact legislation to protect their own interests as a class? Reminds me of this little short: --- http://www.newyorker.com/humor/daily-shouts/l-p-d-libertarian-police-department http://www.newyorker.com/humor/daily-shouts/l-p-d-libertaria... I was shooting heroin and reading “The Fountainhead” in the front seat of my privately owned police cruiser when a call came in. I put a quarter in the radio to activate it. It was the chief. “Bad news, detective. We got a situation.” “What? Is the mayor trying to ban trans fats again?” “Worse. Somebody just stole four hundred and forty-seven million dollars’ worth of bitcoins.” The heroin needle practically fell out of my arm. “What kind of monster would do something like that? Bitcoins are the ultimate currency: virtual, anonymous, stateless. They represent true economic freedom, not subject to arbitrary manipulation by any government. Do we have any leads?” “Not yet. But mark my words: we’re going to figure out who did this and we’re going to take them down … provided someone pays us a fair market rate to do so.” “Easy, chief,” I said. “Any rate the market offers is, by definition, fair.” He laughed. “That’s why you’re the best I got, Lisowski. Now you get out there and find those bitcoins.” “Don’t worry,” I said. “I’m on it.” I put a quarter in the siren. Ten minutes later, I was on the scene. It was a normal office building, strangled on all sides by public sidewalks. I hopped over them and went inside. “Home Depot™ Presents the Police!®” I said, flashing my badge and my gun and a small picture of Ron Paul. “Nobody move unless you want to!” They didn’t. “Now, which one of you punks is going to pay me to investigate this crime?” No one spoke up. “Come on,” I said. “Don’t you all understand that the protection of private property is the foundation of all personal liberty?” It didn’t seem like they did. “Seriously, guys. Without a strong economic motivator, I’m just going to stand here and not solve this case. Cash is fine, but I prefer being paid in gold bullion or autographed Penn Jillette posters.” Nothing. These people were stonewalling me. It almost seemed like they didn’t care that a fortune in computer money invented to buy drugs was missing. I figured I could wait them out. I lit several cigarettes indoors. A pregnant lady coughed, and I told her that secondhand smoke is a myth. Just then, a man in glasses made a break for it. “Subway™ Eat Fresh and Freeze, Scumbag!®” I yelled. Too late. He was already out the front door. I went after him. “Stop right there!” I yelled as I ran. He was faster than me because I always try to avoid stepping on public sidewalks. Our country needs a private-sidewalk voucher system, but, thanks to the incestuous interplay between our corrupt federal government and the public-sidewalk lobby, it will never happen. I was losing him. “Listen, I’ll pay you to stop!” I yelled. “What would you consider an appropriate price point for stopping? I’ll offer you a thirteenth of an ounce of gold and a gently worn ‘Bob Barr ‘08’ extra-large long-sleeved men’s T-shirt!” He turned. In his hand was a revolver that the Constitution said he had every right to own. He fired at me and missed. I pulled my own gun, put a quarter in it, and fired back. The bullet lodged in a U.S.P.S. mailbox less than a foot from his head. I shot the mailbox again, on purpose. “All right, all right!” the man yelled, throwing down his weapon. “I give up, cop! I confess: I took the bitcoins.” “Why’d you do it?” I asked, as I slapped a pair of Oikos™ Greek Yogurt Presents Handcuffs® on the guy. “Because I was afraid.” “Afraid?” “Afraid of an economic future free from the pernicious meddling of central bankers,” he said. “I’m a central banker.” I wanted to coldcock the guy. Years ago, a central banker killed my partner. Instead, I shook my head. “Let this be a message to all your central-banker friends out on the street,” I said. “No matter how many bitcoins you steal, you’ll never take away the dream of an open society based on the principles of personal and economic freedom.” He nodded, because he knew I was right. Then he swiped his credit card to pay me for arresting him.
  - emodendroket 10y ago
    This might be a reasonable complaint if that sentence were completely divorced from context.
    - freehunter 10y ago
      Certain people on HN love to take a single sentence out of context and then act like that single sentence was your entire comment. Very annoying.
- pdpi 10y ago
  They didn't touch his salary. It was his bonus (what they euphemistically describe as his "variable compensation award") that took the hit. Taking a hit to your bonus because you messed up big time is perfectly standard.
  - emodendroket 10y ago
    "Absolutely standard" for whom? What percentage of the workforce even has one, excluding $50 gift cards and other such token gestures?
    - pdpi 10y ago
      "Absolutely standard" for the financial industry, which is the context for this story. It's an industry well known for having a large part of compensation paid as a performance-based bonus.
    - chmod775 10y ago
      For software developers (especially in SV) bonuses can be quite a big chunk of their "paycheck".
    - koolba 10y ago
      It's standard for companies that pay large bonuses (as a percentage of salary). That's the whole point. It's a carrot they dangle in front of you that you get to break off the string once a year.
    - freehunter 10y ago
      I would hope that many (if not most) white-collar workers are getting some kind of profit sharing bonus, Christmas bonus, employee of the month, or some kind of incentive for a job well done beyond the bare minimum performance your salary is meant to represent. Certainly every office job I've ever had I've gotten periodic bonuses for doing a good job, and I've also not received bonuses in times when I did not do a good job.
      - emodendroket 10y ago
- logicallee 10y ago
  If anyone ever pays a traffic ticket, it means taxes are too low. Consider: after paying the traffic ticket, they still show up to work! That means they would have shown up to work even if they had paid that money anyway, in the form of higher taxes. This means if anyone ever pays a traffic ticket, for doing something wrong, it logically follows that everyone's taxes are too low. Otherwise how can they afford to pay it? Do you see how this is an exact analogy for your "argument" (which is a logical error.) We are talking about a punitive fine, for doing something wrong. If you don't agree with my microeconomic analysis please make a graph (the supply curve) with your claim.
  - logicallee 10y ago
    EDIT: downvotes, but no graph, I see. The simple fact is the gparent comment's suggestion is wrong. An elementary sketch of a supply curve would show that it is simply not a good argument. I guess rather than read what I wrote, people voted it based on political ideology. That doesn't make the economics suggestion true.
    - YPCrumble 9y ago
      Your economics isn't wrong. The idea that the economics of a traffic violation is relevant to the economics of a workplace misdeed is wrong.
      - logicallee 9y ago
        (answered under your adjacent comment)
  - YPCrumble 9y ago
    A traffic ticket vs. what this CEO did are so different that your analogy doesn't make sense. A traffic ticket has nothing to do with employment. If a Wal-mart employee steals a candy bar they're going to be fired. This CEO who has the luxury of keeping his job when he does something much worse than stealing a candy bar. Your analogy is a strawman because it has little to no relationship to what we're talking about.
- smallgovt 10y ago
  > Doesn't this undermine the argument that CEOs need outrageous salaries to be incentivized to work, if you slash their salary, and they keep working? No, for a number of reasons. 1) His alternatives today could be substantially worse than when he started. If for no other reason, because of this mistake. 2) There may be large switching costs to changing jobs, and the reduction in salary may be non-substantial in comparison. This switching cost was a sunk cost when he initially joined, but will not be if he chooses to switch now.
  - YPCrumble 9y ago
    Both of your points are symptoms of the problem that CEOs are vastly overpaid. People are too picky choosing CEOs because they falsely believe that CEOs' high pay correlates to a large difference in performance from regular peasants. The truth is that many, many people could do a CEO's job. Everyone makes mistakes, this CEO's colossal mistakes are case-in-point. If we stopped falsely believing that CEO's are magical superhuman lords in a world of serfs we would reduce their pay. Switching costs would reduce dramatically. So would our intolerance for mistakes that are naturally part of the human predicament.
    - smallgovt 9y ago
      > Both of your points are symptoms of the problem that CEOs are vastly overpaid. How so? I fail to see how even if he was overpaid, either of my points are caused by (i.e. are symptyoms of) him being overpaid. > People are too picky choosing CEOs because they falsely believe that CEOs' high pay correlates to a large difference in performance from regular peasants. The truth is that many, many people could do a CEO's job. Everyone makes mistakes, this CEO's colossal mistakes are case-in-point. Based on what evidence? To make this conclusion, you need to compare the quantity and quality of mistakes made by current CEO's and would-be "peasant" replacements. I find it hard to believe you have a factual basis for estimating the types of mistakes your supposed replacement would make. If you better understand what these CEO's do, I think you'll find the # of ppl who can ACTUALLY do their job is quite small, and it certainly doesn't include "regular peasants" or "many, many people". Furthermore, these companies have hug market caps. If the optimal CEO generates 1% more company value than his best alternative, it's more than worth the tens of millions he's being paid.
bougiefever 10y ago
He claims he didn't know it was wrong. Yea right.
- sqeaky 10y ago
  To be fair people completely devoid of empathy often don't know why causing suffering is wrong. Until it happens to them at least.
r00fus 10y ago
Is anyone ticked that for an article about Barclays and Banking, I get a video talking about Trump's "town hall"?

90 points by mathattack 10y ago

jaclaz 10y ago

... but no (slight) slap on the hand, and not even going to bed without dinner ...

adrenalinelol 10y ago

Poor guy... he only made $5.2 million...?

inetknght 10y ago
His mistake was not working as a CEO in the USA... everyone knows CEOs there make hundreds of trillions of dollars. /s

YPCrumble 10y ago

This is a good example of why CEO pay is wrong. In any normal job, if your salary gets "slashed", you quit your job. Doesn't this undermine the argument that CEOs need outrageous salaries to be incentivized to work, if you slash their salary, and they keep working?

bmmayer1 10y ago
"CEO pay is wrong" What does this mean? Paying CEOs is wrong? The pay that all CEOs get is wrong? The pay that some CEOs get is wrong?
- frgtpsswrdlame 10y ago
  Most CEOs are dramatically overpaid.
  - dsacco 10y ago
    Overpaid relative to what? Your estimation of perceived value? What do you define as value? How would you even begin to empirically establish what you're saying? Executive compensation is a construct of market consensus, not an absolute based on individual performance. The tangible value contributed by chief executive staff is one component of the compensation package, and what is valuable to the board or shareholders in aggregate may be utterly dissimilar to what you'd consider valuable. Your premise in why an executive should be paid is probably different from the premises used by those who actually choose what the executive will be paid. The difficulty in finding an appropriate candidate, the risk of their having to publicly "fall on the sword" for the company, their contributed value, their particular skills/culture match, their years of experience, their network of available connections, etc all play a part in determining the compensation. And what's more, you may not measure each of these things with the same respective weighting or definition that the company would. This is to say that you can arbitrarily say that executives as a class are overpaid, and I can arbitrarily say they're underpaid. You're free to propose a new compensation model, but for better or worse, most boards and shareholders seem fine with the status quo. Given that, it's not very productive to make a blanket statement about them being over or under-compensated if we can't establish that we're all working from the same set of premises. You'd have about as much rigor in claiming that TSLA is overvalued relative to GM. Sure, you might be right, but 1) why listen to you rather than, say Zacks and 2) what makes your model of compensation more valid, when you have to surmount the burden of not just correctness but market consensus?
    - RodericDay 10y ago
      I'm honestly baffled every time a free market zealous believer goes around saying "nothing is unfair! the market, by definition, makes everything fair!" What is it going to take to make statements like "bosses are making too much money compared to their workers" popular again, so that people can actually mobilize and enact legislation to protect their own interests as a class? Reminds me of this little short: --- http://www.newyorker.com/humor/daily-shouts/l-p-d-libertarian-police-department http://www.newyorker.com/humor/daily-shouts/l-p-d-libertaria... I was shooting heroin and reading “The Fountainhead” in the front seat of my privately owned police cruiser when a call came in. I put a quarter in the radio to activate it. It was the chief. “Bad news, detective. We got a situation.” “What? Is the mayor trying to ban trans fats again?” “Worse. Somebody just stole four hundred and forty-seven million dollars’ worth of bitcoins.” The heroin needle practically fell out of my arm. “What kind of monster would do something like that? Bitcoins are the ultimate currency: virtual, anonymous, stateless. They represent true economic freedom, not subject to arbitrary manipulation by any government. Do we have any leads?” “Not yet. But mark my words: we’re going to figure out who did this and we’re going to take them down … provided someone pays us a fair market rate to do so.” “Easy, chief,” I said. “Any rate the market offers is, by definition, fair.” He laughed. “That’s why you’re the best I got, Lisowski. Now you get out there and find those bitcoins.” “Don’t worry,” I said. “I’m on it.” I put a quarter in the siren. Ten minutes later, I was on the scene. It was a normal office building, strangled on all sides by public sidewalks. I hopped over them and went inside. “Home Depot™ Presents the Police!®” I said, flashing my badge and my gun and a small picture of Ron Paul. “Nobody move unless you want to!” They didn’t. “Now, which one of you punks is going to pay me to investigate this crime?” No one spoke up. “Come on,” I said. “Don’t you all understand that the protection of private property is the foundation of all personal liberty?” It didn’t seem like they did. “Seriously, guys. Without a strong economic motivator, I’m just going to stand here and not solve this case. Cash is fine, but I prefer being paid in gold bullion or autographed Penn Jillette posters.” Nothing. These people were stonewalling me. It almost seemed like they didn’t care that a fortune in computer money invented to buy drugs was missing. I figured I could wait them out. I lit several cigarettes indoors. A pregnant lady coughed, and I told her that secondhand smoke is a myth. Just then, a man in glasses made a break for it. “Subway™ Eat Fresh and Freeze, Scumbag!®” I yelled. Too late. He was already out the front door. I went after him. “Stop right there!” I yelled as I ran. He was faster than me because I always try to avoid stepping on public sidewalks. Our country needs a private-sidewalk voucher system, but, thanks to the incestuous interplay between our corrupt federal government and the public-sidewalk lobby, it will never happen. I was losing him. “Listen, I’ll pay you to stop!” I yelled. “What would you consider an appropriate price point for stopping? I’ll offer you a thirteenth of an ounce of gold and a gently worn ‘Bob Barr ‘08’ extra-large long-sleeved men’s T-shirt!” He turned. In his hand was a revolver that the Constitution said he had every right to own. He fired at me and missed. I pulled my own gun, put a quarter in it, and fired back. The bullet lodged in a U.S.P.S. mailbox less than a foot from his head. I shot the mailbox again, on purpose. “All right, all right!” the man yelled, throwing down his weapon. “I give up, cop! I confess: I took the bitcoins.” “Why’d you do it?” I asked, as I slapped a pair of Oikos™ Greek Yogurt Presents Handcuffs® on the guy. “Because I was afraid.” “Afraid?” “Afraid of an economic future free from the pernicious meddling of central bankers,” he said. “I’m a central banker.” I wanted to coldcock the guy. Years ago, a central banker killed my partner. Instead, I shook my head. “Let this be a message to all your central-banker friends out on the street,” I said. “No matter how many bitcoins you steal, you’ll never take away the dream of an open society based on the principles of personal and economic freedom.” He nodded, because he knew I was right. Then he swiped his credit card to pay me for arresting him.
- emodendroket 10y ago
  This might be a reasonable complaint if that sentence were completely divorced from context.
  - freehunter 10y ago
    Certain people on HN love to take a single sentence out of context and then act like that single sentence was your entire comment. Very annoying.
pdpi 10y ago
They didn't touch his salary. It was his bonus (what they euphemistically describe as his "variable compensation award") that took the hit. Taking a hit to your bonus because you messed up big time is perfectly standard.
- emodendroket 10y ago
  "Absolutely standard" for whom? What percentage of the workforce even has one, excluding $50 gift cards and other such token gestures?
  - pdpi 10y ago
    "Absolutely standard" for the financial industry, which is the context for this story. It's an industry well known for having a large part of compensation paid as a performance-based bonus.
  - chmod775 10y ago
    For software developers (especially in SV) bonuses can be quite a big chunk of their "paycheck".
  - koolba 10y ago
    It's standard for companies that pay large bonuses (as a percentage of salary). That's the whole point. It's a carrot they dangle in front of you that you get to break off the string once a year.
  - freehunter 10y ago
    I would hope that many (if not most) white-collar workers are getting some kind of profit sharing bonus, Christmas bonus, employee of the month, or some kind of incentive for a job well done beyond the bare minimum performance your salary is meant to represent. Certainly every office job I've ever had I've gotten periodic bonuses for doing a good job, and I've also not received bonuses in times when I did not do a good job.
    - emodendroket 10y ago
logicallee 10y ago
If anyone ever pays a traffic ticket, it means taxes are too low. Consider: after paying the traffic ticket, they still show up to work! That means they would have shown up to work even if they had paid that money anyway, in the form of higher taxes. This means if anyone ever pays a traffic ticket, for doing something wrong, it logically follows that everyone's taxes are too low. Otherwise how can they afford to pay it? Do you see how this is an exact analogy for your "argument" (which is a logical error.) We are talking about a punitive fine, for doing something wrong. If you don't agree with my microeconomic analysis please make a graph (the supply curve) with your claim.
- logicallee 10y ago
  EDIT: downvotes, but no graph, I see. The simple fact is the gparent comment's suggestion is wrong. An elementary sketch of a supply curve would show that it is simply not a good argument. I guess rather than read what I wrote, people voted it based on political ideology. That doesn't make the economics suggestion true.
  - YPCrumble 9y ago
    Your economics isn't wrong. The idea that the economics of a traffic violation is relevant to the economics of a workplace misdeed is wrong.
    - logicallee 9y ago
      (answered under your adjacent comment)
- YPCrumble 9y ago
  A traffic ticket vs. what this CEO did are so different that your analogy doesn't make sense. A traffic ticket has nothing to do with employment. If a Wal-mart employee steals a candy bar they're going to be fired. This CEO who has the luxury of keeping his job when he does something much worse than stealing a candy bar. Your analogy is a strawman because it has little to no relationship to what we're talking about.
smallgovt 10y ago
> Doesn't this undermine the argument that CEOs need outrageous salaries to be incentivized to work, if you slash their salary, and they keep working? No, for a number of reasons. 1) His alternatives today could be substantially worse than when he started. If for no other reason, because of this mistake. 2) There may be large switching costs to changing jobs, and the reduction in salary may be non-substantial in comparison. This switching cost was a sunk cost when he initially joined, but will not be if he chooses to switch now.
- YPCrumble 9y ago
  Both of your points are symptoms of the problem that CEOs are vastly overpaid. People are too picky choosing CEOs because they falsely believe that CEOs' high pay correlates to a large difference in performance from regular peasants. The truth is that many, many people could do a CEO's job. Everyone makes mistakes, this CEO's colossal mistakes are case-in-point. If we stopped falsely believing that CEO's are magical superhuman lords in a world of serfs we would reduce their pay. Switching costs would reduce dramatically. So would our intolerance for mistakes that are naturally part of the human predicament.
  - smallgovt 9y ago
    > Both of your points are symptoms of the problem that CEOs are vastly overpaid. How so? I fail to see how even if he was overpaid, either of my points are caused by (i.e. are symptyoms of) him being overpaid. > People are too picky choosing CEOs because they falsely believe that CEOs' high pay correlates to a large difference in performance from regular peasants. The truth is that many, many people could do a CEO's job. Everyone makes mistakes, this CEO's colossal mistakes are case-in-point. Based on what evidence? To make this conclusion, you need to compare the quantity and quality of mistakes made by current CEO's and would-be "peasant" replacements. I find it hard to believe you have a factual basis for estimating the types of mistakes your supposed replacement would make. If you better understand what these CEO's do, I think you'll find the # of ppl who can ACTUALLY do their job is quite small, and it certainly doesn't include "regular peasants" or "many, many people". Furthermore, these companies have hug market caps. If the optimal CEO generates 1% more company value than his best alternative, it's more than worth the tens of millions he's being paid.

bougiefever 10y ago

He claims he didn't know it was wrong. Yea right.

sqeaky 10y ago
To be fair people completely devoid of empathy often don't know why causing suffering is wrong. Until it happens to them at least.

r00fus 10y ago

Is anyone ticked that for an article about Barclays and Banking, I get a video talking about Trump's "town hall"?