4 ms·

You're not wrong, but if you are a top Senior Level exec being recruited and only one company threatened you with compensation clawback, would you be more or le

You're not wrong, but if you are a top Senior Level exec being recruited and only one company threatened you with compensation clawback, would you be more or less likely to take that job over others?

rhizome 9y ago
If a regular employee said they'd only work if the possibility of "firing for cause" was taken off the table, would you think they were qualified?
- kinkrtyavimoodh 9y ago
  I imagine it's a little difficult to compare the two because there is a difference in bargaining power between a regular employee (who is closer to a commodity) and a CEO candidate (for which the applicant pool is much smaller, and company fit very important). Secondly, a CEO, being the head of the company, could technically be held 'accountable' for hundreds of millions of dollars, and it'd be reasonable for someone to want to shield themselves from such a liability, which might not necessarily arise out of a violation of their own, but rather of the company.
  - coryrc 9y ago
    Maybe if we started hiring "regular" people for CEO, companies could spend the excess compensation on other employees so we can keep the good ones around and stop the nickel & diming that leads to a man getting beaten for riding is his paid-for airplane seat.
    - coredog64 9y ago
      United's CEO was paid $19m last year (per Morningstar). United has 86000 employees. That works out to $220 per employee over the course of the year, or about $10 per paycheck (gross). If you dumped all the executives, the raise amounts to $30/paycheck. Do you think $600/year is the difference between good employees and those that let men get beaten? Morningstar's free summary doesn't break down cash vs. equity. The latter is mainly being paid by shareholders and wouldn't represent cash that was available to distribute to employees. Therefore it is highly likely that the "windfall" of a regular Joe CEO would be much less than I have noted here.
      - icantdrive55 9y ago
        "Do you think $600/year is the difference between good employees and those that let men get beaten?" Yes. On a larger note, don't you think employee moral/"I actually give a chit about this job" would rise if the average Joe felt a part of a true team? Not a selfish team? I can only think of one company who decided to buck the trend of giving the "resume genius, or I did something interesting ten years ago." huge sums of money, so I can't even offer an example. I do feel, with the exception of a few happy companies, like Google, Apple, buyoldfurniturefromagayman.com(yea--I thought it was a parody, or I was really loosing it. I woke up to that commercial, and thought it was funny. I then saw it again while awake. I'm still not sure it's real, but wish them luck.); the average employee hates their employer. And, giving the resume genius so much money only makes sence in a market like this one--a bull market, with investors with so much money they don't know where to dump it. I don't really know, but the disparity between pay is something I haven't habituated to yet. And it's easy to cherry pick the obvious failures--MM. We all know those initials.
      - UK-AL 9y ago
        You could hire a few teams of incredibly skilled people for that though.
        geodel 9y ago
        At that point normal teams will balance out the results of incredibly skilled teams.
        taneq 9y ago
        But won't balance out the CEO?
      - rhizome 9y ago
        Isn't there a large org chart of not-quite $19MM earners to account for, too? It's not like everybody makes $200K until being made CEO.
      - lovich 9y ago
  - Spooky23 9y ago
    In government, C-level people make less than $200k, usually a lot less, yet seem to be able to competently lead organizations consisting of tens of thousands of people. One commissioner of a multi-billion dollar agency that I knew drove a late 90s Accord a few years ago. They are also subject to invasive and strict ethics and disclosure rules revolving door policies. CEOs mint money because of social connections, not value to the business. The board members who implicitly endorse graft should themselves be subject to criminal sanction.
    - naasking 9y ago
      > CEOs mint money because of social connections, not value to the business. Sure, the CEOs are themselves often on the boards of other corporations. The incestuous nature of this top level is bordering on the absurd.
    - wayn3 9y ago
      "competently"
  - rhizome 9y ago
    It's not about bargaining power, it's about even considering them for the job. Wouldn't you think they were telling you they're probably going to turn out to be more trouble than they're worth? I'm pretty sure that's what conventional wisdom says is the correct response.
- tajen 9y ago
  ...but I'd be 20x more keen to take a job at a company who doesn't fire on suspicion. E.g. a company who stands their ground and says: "We know we're subject of a PR campaign against us, but we respect the presumption of innocence: We won't fire X because he hasn't yet been proven guilty in court, and we will fire any that is proven guilty." i.e. GitHub, Mozilla both have fired CEOs on unproven claims.
  - rosser 9y ago
    A CEO's job is to champion the interests of their company. If they're mired in controversy, legitimate or otherwise, their ability to do that job is compromised. Sometimes, it's the right move for the company to stand by an unpopular CEO. Other times, it's better to walk away. Customers and investors are fickle, and often irrational. Supporting a CEO that is driving both away because "presumption of innocence" might be the worst possible move you could make, depending on the situation. In fact, I'd argue that a hallmark characteristic of a good CEO is someone who can say, "My continued presence is hurting the company. I need to step down, so everyone else can succeed" if that's what's needed. Yes, even if the controversy is completely made-up bullshit. In the long run, the company and the (former) CEO will both be better off if they can look back at a gracefully handled departure, where everything turned out to be so much noise, than some Pyrrhic victory, where you've alienated customers, investors have walked, but, by god! you stood by your CEO!
    - jorvi 9y ago
      That is exactly the mentality SJWs hope for when they unjustly attack a person, that a company will just roll over out of fear for misguided public retaliation. Remember the NASA guy that got a ton of shit because he wore a Hawaiian shirt that his wife made during a live launch? Overzealous feminists hoped NASA would just roll over and get rid of the poor guy. It's almost maffia like.. 'thats a nice life you built there.. it'd be a shame if something happened to it..'
      - Avshalom 9y ago
        Oh fer fucks... Hoping that it will fix the perceived problem is exactly the mentality of everyone who attacks anything justly or unjustly for any reason thats why they're doing it.
kbenson 9y ago
Actually, I could see that drawing some people just as it repels others. IT signals that the company is serious about acting responsibly, and putting incentives in place so its management does so. Some people may want to work at a place where they don't have to worry about being pressured into something they thought was wrong, and a signal like this may attract them.
- megablast 9y ago
  Sure, you can see that. But in the real world, outside of a thought experiment, nobody would.
  - kbenson 9y ago
    > Sure, you can see that. But in the real world, outside of a thought experiment, nobody would. You should contact some behavioral economists and offer your services. I'm sure they could use someone that knows exactly how people are going respond to complex behavioral questions with multiple competing incentives. They could save a bundle on the speccing and running of experiments.
munificent 9y ago
More: It shows the company cares about integrity and that's the kind of place I'd like to work. But I'm not a senior executive.
bgirard 9y ago
It depends what kind of candidate the exec is. Personally I don't enjoy working for places that are known for not firing low performers. I'd rather work somewhere that has higher stakes and higher rewards. That kind of mentality is more likely to attract execs looking for a cushy high paying job with little to risk.
- smsm42 9y ago
  It's not only firing, it's also taking back money already paid. Imagine the company had particularly good year, you get $LOTS_OF_MONEY, you spend it on $LUXURIES, and then next year something goes wrong, and the board decides it's your fault, and suddenly you owe $LOTS_OF_MONEY back. And you've already spent it, or invested it in some illiquid asset. Maybe very uncomfortable situation, much worse than plain firing. People aren't used to take that level of risk, so many may be reluctant, especially if other options are around.
  - bgirard 9y ago
    I was imaging something like unvested equity. Yes that's a lot more aggressive. Contracts often require employees to pay some of the back signing bonuses and relocation fees if they leave within a year. I've heard rumors that it's not commonly enforced but contractually it's a possibility. But in theory there is precedent of that for employees where paying back a 100k signing bonuses and relocation expenses is a big risk and you still senior software engineers relocating to the bay area under those terms.
  - razorunreal 9y ago
    We're talking about severance pay that they were paid in the course of being fired. It's not clear to me that it should have been paid in the first place.
    - smsm42 9y ago
      Well, if that's just severance that may be simpler case. But in general clawback clauses may extend years behind. OTOH, Wikipedia says[1]: The prevalence of clawback provisions among Fortune 100 companies increased from lower than 3% prior to 2005 to 82% in 2010. If everybody (or nearly everybody) starts doing so, then the competitive disadvantage of having such clauses is reduced, since it may still be better to have risky CEO job in F100 company than not having one. [1] https://en.wikipedia.org/wiki/Clawback https://en.wikipedia.org/wiki/Clawback

You're not wrong, but if you are a top Senior Level exec being recruited and only one company threatened you with compensation clawback, would you be more or less likely to take that job over others?

rhizome 9y ago

If a regular employee said they'd only work if the possibility of "firing for cause" was taken off the table, would you think they were qualified?

kinkrtyavimoodh 9y ago
I imagine it's a little difficult to compare the two because there is a difference in bargaining power between a regular employee (who is closer to a commodity) and a CEO candidate (for which the applicant pool is much smaller, and company fit very important). Secondly, a CEO, being the head of the company, could technically be held 'accountable' for hundreds of millions of dollars, and it'd be reasonable for someone to want to shield themselves from such a liability, which might not necessarily arise out of a violation of their own, but rather of the company.
- coryrc 9y ago
  Maybe if we started hiring "regular" people for CEO, companies could spend the excess compensation on other employees so we can keep the good ones around and stop the nickel & diming that leads to a man getting beaten for riding is his paid-for airplane seat.
  - coredog64 9y ago
    United's CEO was paid $19m last year (per Morningstar). United has 86000 employees. That works out to $220 per employee over the course of the year, or about $10 per paycheck (gross). If you dumped all the executives, the raise amounts to $30/paycheck. Do you think $600/year is the difference between good employees and those that let men get beaten? Morningstar's free summary doesn't break down cash vs. equity. The latter is mainly being paid by shareholders and wouldn't represent cash that was available to distribute to employees. Therefore it is highly likely that the "windfall" of a regular Joe CEO would be much less than I have noted here.
    - icantdrive55 9y ago
      "Do you think $600/year is the difference between good employees and those that let men get beaten?" Yes. On a larger note, don't you think employee moral/"I actually give a chit about this job" would rise if the average Joe felt a part of a true team? Not a selfish team? I can only think of one company who decided to buck the trend of giving the "resume genius, or I did something interesting ten years ago." huge sums of money, so I can't even offer an example. I do feel, with the exception of a few happy companies, like Google, Apple, buyoldfurniturefromagayman.com(yea--I thought it was a parody, or I was really loosing it. I woke up to that commercial, and thought it was funny. I then saw it again while awake. I'm still not sure it's real, but wish them luck.); the average employee hates their employer. And, giving the resume genius so much money only makes sence in a market like this one--a bull market, with investors with so much money they don't know where to dump it. I don't really know, but the disparity between pay is something I haven't habituated to yet. And it's easy to cherry pick the obvious failures--MM. We all know those initials.
    - UK-AL 9y ago
      You could hire a few teams of incredibly skilled people for that though.
      - geodel 9y ago
        At that point normal teams will balance out the results of incredibly skilled teams.
        taneq 9y ago
        But won't balance out the CEO?
    - rhizome 9y ago
      Isn't there a large org chart of not-quite $19MM earners to account for, too? It's not like everybody makes $200K until being made CEO.
    - lovich 9y ago
- Spooky23 9y ago
  In government, C-level people make less than $200k, usually a lot less, yet seem to be able to competently lead organizations consisting of tens of thousands of people. One commissioner of a multi-billion dollar agency that I knew drove a late 90s Accord a few years ago. They are also subject to invasive and strict ethics and disclosure rules revolving door policies. CEOs mint money because of social connections, not value to the business. The board members who implicitly endorse graft should themselves be subject to criminal sanction.
  - naasking 9y ago
    > CEOs mint money because of social connections, not value to the business. Sure, the CEOs are themselves often on the boards of other corporations. The incestuous nature of this top level is bordering on the absurd.
  - wayn3 9y ago
    "competently"
- rhizome 9y ago
  It's not about bargaining power, it's about even considering them for the job. Wouldn't you think they were telling you they're probably going to turn out to be more trouble than they're worth? I'm pretty sure that's what conventional wisdom says is the correct response.
tajen 9y ago
...but I'd be 20x more keen to take a job at a company who doesn't fire on suspicion. E.g. a company who stands their ground and says: "We know we're subject of a PR campaign against us, but we respect the presumption of innocence: We won't fire X because he hasn't yet been proven guilty in court, and we will fire any that is proven guilty." i.e. GitHub, Mozilla both have fired CEOs on unproven claims.
- rosser 9y ago
  A CEO's job is to champion the interests of their company. If they're mired in controversy, legitimate or otherwise, their ability to do that job is compromised. Sometimes, it's the right move for the company to stand by an unpopular CEO. Other times, it's better to walk away. Customers and investors are fickle, and often irrational. Supporting a CEO that is driving both away because "presumption of innocence" might be the worst possible move you could make, depending on the situation. In fact, I'd argue that a hallmark characteristic of a good CEO is someone who can say, "My continued presence is hurting the company. I need to step down, so everyone else can succeed" if that's what's needed. Yes, even if the controversy is completely made-up bullshit. In the long run, the company and the (former) CEO will both be better off if they can look back at a gracefully handled departure, where everything turned out to be so much noise, than some Pyrrhic victory, where you've alienated customers, investors have walked, but, by god! you stood by your CEO!
  - jorvi 9y ago
    That is exactly the mentality SJWs hope for when they unjustly attack a person, that a company will just roll over out of fear for misguided public retaliation. Remember the NASA guy that got a ton of shit because he wore a Hawaiian shirt that his wife made during a live launch? Overzealous feminists hoped NASA would just roll over and get rid of the poor guy. It's almost maffia like.. 'thats a nice life you built there.. it'd be a shame if something happened to it..'
    - Avshalom 9y ago
      Oh fer fucks... Hoping that it will fix the perceived problem is exactly the mentality of everyone who attacks anything justly or unjustly for any reason thats why they're doing it.

kbenson 9y ago

Actually, I could see that drawing some people just as it repels others. IT signals that the company is serious about acting responsibly, and putting incentives in place so its management does so. Some people may want to work at a place where they don't have to worry about being pressured into something they thought was wrong, and a signal like this may attract them.

megablast 9y ago
Sure, you can see that. But in the real world, outside of a thought experiment, nobody would.
- kbenson 9y ago
  > Sure, you can see that. But in the real world, outside of a thought experiment, nobody would. You should contact some behavioral economists and offer your services. I'm sure they could use someone that knows exactly how people are going respond to complex behavioral questions with multiple competing incentives. They could save a bundle on the speccing and running of experiments.

munificent 9y ago

More: It shows the company cares about integrity and that's the kind of place I'd like to work. But I'm not a senior executive.

bgirard 9y ago

It depends what kind of candidate the exec is. Personally I don't enjoy working for places that are known for not firing low performers. I'd rather work somewhere that has higher stakes and higher rewards. That kind of mentality is more likely to attract execs looking for a cushy high paying job with little to risk.

smsm42 9y ago
It's not only firing, it's also taking back money already paid. Imagine the company had particularly good year, you get $LOTS_OF_MONEY, you spend it on $LUXURIES, and then next year something goes wrong, and the board decides it's your fault, and suddenly you owe $LOTS_OF_MONEY back. And you've already spent it, or invested it in some illiquid asset. Maybe very uncomfortable situation, much worse than plain firing. People aren't used to take that level of risk, so many may be reluctant, especially if other options are around.
- bgirard 9y ago
  I was imaging something like unvested equity. Yes that's a lot more aggressive. Contracts often require employees to pay some of the back signing bonuses and relocation fees if they leave within a year. I've heard rumors that it's not commonly enforced but contractually it's a possibility. But in theory there is precedent of that for employees where paying back a 100k signing bonuses and relocation expenses is a big risk and you still senior software engineers relocating to the bay area under those terms.
- razorunreal 9y ago
  We're talking about severance pay that they were paid in the course of being fired. It's not clear to me that it should have been paid in the first place.
  - smsm42 9y ago
    Well, if that's just severance that may be simpler case. But in general clawback clauses may extend years behind. OTOH, Wikipedia says[1]: The prevalence of clawback provisions among Fortune 100 companies increased from lower than 3% prior to 2005 to 82% in 2010. If everybody (or nearly everybody) starts doing so, then the competitive disadvantage of having such clauses is reduced, since it may still be better to have risky CEO job in F100 company than not having one. [1] https://en.wikipedia.org/wiki/Clawback https://en.wikipedia.org/wiki/Clawback