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"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.

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.