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I'm all for taxing the rich and compensating workers fairly. But: - Had the company declined, the CEO would have gotten all the blame and been crucified. Can'

I'm all for taxing the rich and compensating workers fairly. But: - Had the company declined, the CEO would have gotten all the blame and been crucified. Can't give blame if you can't also give credit. - The CEO negotiated this deal, the employees did not. - A good portion of this $500M is from the value of his stock, which is part of his compensation. I don't know the percentage of this payout that comes from stock (WSJ paywall...), but we certainly can't take stock AWAY from him to reduce his payout. - Employees who have cashed in their options will also make money from this deal. Other stockholders will make money too. Again -- I am NOT condoning our American trend of over-paid CEOs. More money in the working class is good for the economy. But this event specifically is not ridiculous.

deleted 9y ago
[deleted]
pkaye 9y ago
Then why not get rid of the rest of the employees and just hire a dozen like him since he is bringing all the value.
- chrisdbaldwin 9y ago
  You need exactly 1 in the organization. No more, no less. Can you deduce why a collective or cluster hasn't replaced the role? I'd imagine the answer is blame, but I'd like to know what you think.
Nrsolis 9y ago
Something I find curious is the degree to which HN seems to want to break out the torches and pitchforks when a CEO profits handsomely by increasing shareholder value. There doesn't seem to be the same animus towards ordinary developers becoming millionaires in a few short years by getting lucky and landing at the right unicorn startup pre-IPO. CEOs interests are aligned perfectly in this situation: increase shareholder value. The vast bulk of CEO pay is derived from the stock that's granted to them and vested over time just like it would be for any employee that received RSUs or stock options. I don't quite grok the idea that employees with no ownership stake in the company are somehow owed a share of the capital gain when they've got no capital of their own at risk. A big part of my compensation is commission and another big part is RSUs. If I don't deliver results and if I don't align my goals with that of the major shareholders and the market, I don't make as much money. I don't see how this contravenes the startup/get-rich zeitgeist here in HN. Capitalism for me but not for thee?
- maxerickson 9y ago
  I'm not particularly animated by the issue but I'm also not convinced the compensation has much to do with relative ability and performance. It's based on lucky positioning and risk averse ass covering (the board thinks it is more defensible to pay lots for a star than take a risk paying less).
  - Nrsolis 9y ago
    Who gets to decide this? As I understand it, it's the board of directors that put together a compensation committee. It's not like they are spending your money. They're spending the shareholder's money. If only you owned stock in CVS or Aetna you'd be able to make your voice heard.
    - maxerickson 9y ago
      What's your point? You think I should keep my opinion to myself or something?
      - Nrsolis 9y ago
        I don't understand the animus towards CEO pay. It can easily be applied to any major celebrity or athlete. If anyone could do what they do, they'd be paid accordingly. The market (via the shareholders) sets the rate of pay. Why the general public cares about one and not the other is beyond me.
        maxerickson 9y ago
        My post questions the ability of the market to price CEO value a lot more than it expresses outrage. Athletes and celebrities are different, their pay is a natural consequence of gathering lots of attention. A more rational species would substitute cheaper entertainment.
        bkanber 9y ago
ilyanep 9y ago
It's like 80% according to the article: - $230m from "already-vested stock-appreciation rights" - $190m from "Aetna common stock he currently owns" - "Between $60 million and $85 million" as part of a "change-in-control package" which is paid out if he's terminated as a result of the sale. One of my biggest pet peeves regarding reporting of executive compensation is when the headlines pretend that CEOs are being paid hundreds of millions of dollars in cash, when it's mostly coming from stock-based compensation, which is arguably the most fair way to pay a CEO (if they do poorly leading the company, they make much less money).
pg314 9y ago
> - Had the company declined, the CEO would have gotten all the blame and been crucified. Can't give blame if you can't also give credit. He was making 10+ million dollars a year already [1], which he would have been able to keep. The worst that could have happened to him if he was underperforming was being fired. Calling it being crucified is ridiculous hyperbole. [1] https://en.wikipedia.org/wiki/Mark_Bertolini https://en.wikipedia.org/wiki/Mark_Bertolini
s73ver_ 9y ago
"- Had the company declined, the CEO would have gotten all the blame and been crucified. Can't give blame if you can't also give credit." And he would have been given a golden parachute worth far more than most of us will see in our lifetimes. His family wouldn't go hungry or homeless. At the same time, many employees will get laid off, and their families will have a very real chance of going hungry or homeless.
- bkanber 9y ago
  Yes, that's true. When a pro NFL player gets injured in game 1 and has to sit out the rest of the season, they still get paid. If I get injured and can't code, I'm screwed. If we're talking about Fortune 500 CEOs, we're talking about pros at the top of the game where the economics are totally different. If you want a golden parachute like the Fortune 500 CEOs get, you also have to be one of the 500 -- just like I'd have to be a pro NFL player in order to get paid millions of dollars while sitting on an injury.
jimbokun 9y ago
"Had the company declined, the CEO would have gotten all the blame and been crucified." Hahaha, that's a good one. The CEO would get a golden parachute payout and move onto another highly paid position.
- bkanber 9y ago
  If you want a golden parachute like that, then you also need to be one of the top 500 or 1000 sought-after CEOs in the country. Just like if you want a pro footballer's (NFL) salary, you need to be one of the top 1500 players. Software engineers like me and (probably) you don't get golden parachutes because we're not one in 500, we're one in a million.
  - jimbokun 9y ago
    Football players are good comparison. If they don't play well, they are just cut and not paid anything. No "golden parachutes" for poor performance.
    - bkanber 9y ago
      They do get golden parachutes. If you're a pro football player and you get benched in game 1 with a season-ending injury, you still get paid. If you get cut for poor performance before your contract's guaranteed payout is paid, you still get that money. That is the golden parachute.

deleted 9y ago

[deleted]

pkaye 9y ago

Then why not get rid of the rest of the employees and just hire a dozen like him since he is bringing all the value.

chrisdbaldwin 9y ago
You need exactly 1 in the organization. No more, no less. Can you deduce why a collective or cluster hasn't replaced the role? I'd imagine the answer is blame, but I'd like to know what you think.

Nrsolis 9y ago

Something I find curious is the degree to which HN seems to want to break out the torches and pitchforks when a CEO profits handsomely by increasing shareholder value. There doesn't seem to be the same animus towards ordinary developers becoming millionaires in a few short years by getting lucky and landing at the right unicorn startup pre-IPO. CEOs interests are aligned perfectly in this situation: increase shareholder value. The vast bulk of CEO pay is derived from the stock that's granted to them and vested over time just like it would be for any employee that received RSUs or stock options. I don't quite grok the idea that employees with no ownership stake in the company are somehow owed a share of the capital gain when they've got no capital of their own at risk. A big part of my compensation is commission and another big part is RSUs. If I don't deliver results and if I don't align my goals with that of the major shareholders and the market, I don't make as much money. I don't see how this contravenes the startup/get-rich zeitgeist here in HN. Capitalism for me but not for thee?

maxerickson 9y ago
I'm not particularly animated by the issue but I'm also not convinced the compensation has much to do with relative ability and performance. It's based on lucky positioning and risk averse ass covering (the board thinks it is more defensible to pay lots for a star than take a risk paying less).
- Nrsolis 9y ago
  Who gets to decide this? As I understand it, it's the board of directors that put together a compensation committee. It's not like they are spending your money. They're spending the shareholder's money. If only you owned stock in CVS or Aetna you'd be able to make your voice heard.
  - maxerickson 9y ago
    What's your point? You think I should keep my opinion to myself or something?
    - Nrsolis 9y ago
      I don't understand the animus towards CEO pay. It can easily be applied to any major celebrity or athlete. If anyone could do what they do, they'd be paid accordingly. The market (via the shareholders) sets the rate of pay. Why the general public cares about one and not the other is beyond me.
      - maxerickson 9y ago
        My post questions the ability of the market to price CEO value a lot more than it expresses outrage. Athletes and celebrities are different, their pay is a natural consequence of gathering lots of attention. A more rational species would substitute cheaper entertainment.
        bkanber 9y ago

ilyanep 9y ago

It's like 80% according to the article: - $230m from "already-vested stock-appreciation rights" - $190m from "Aetna common stock he currently owns" - "Between $60 million and $85 million" as part of a "change-in-control package" which is paid out if he's terminated as a result of the sale. One of my biggest pet peeves regarding reporting of executive compensation is when the headlines pretend that CEOs are being paid hundreds of millions of dollars in cash, when it's mostly coming from stock-based compensation, which is arguably the most fair way to pay a CEO (if they do poorly leading the company, they make much less money).

pg314 9y ago

> - Had the company declined, the CEO would have gotten all the blame and been crucified. Can't give blame if you can't also give credit. He was making 10+ million dollars a year already [1], which he would have been able to keep. The worst that could have happened to him if he was underperforming was being fired. Calling it being crucified is ridiculous hyperbole. [1] https://en.wikipedia.org/wiki/Mark_Bertolini https://en.wikipedia.org/wiki/Mark_Bertolini

s73ver_ 9y ago

"- Had the company declined, the CEO would have gotten all the blame and been crucified. Can't give blame if you can't also give credit." And he would have been given a golden parachute worth far more than most of us will see in our lifetimes. His family wouldn't go hungry or homeless. At the same time, many employees will get laid off, and their families will have a very real chance of going hungry or homeless.

bkanber 9y ago
Yes, that's true. When a pro NFL player gets injured in game 1 and has to sit out the rest of the season, they still get paid. If I get injured and can't code, I'm screwed. If we're talking about Fortune 500 CEOs, we're talking about pros at the top of the game where the economics are totally different. If you want a golden parachute like the Fortune 500 CEOs get, you also have to be one of the 500 -- just like I'd have to be a pro NFL player in order to get paid millions of dollars while sitting on an injury.

jimbokun 9y ago

"Had the company declined, the CEO would have gotten all the blame and been crucified." Hahaha, that's a good one. The CEO would get a golden parachute payout and move onto another highly paid position.

bkanber 9y ago
If you want a golden parachute like that, then you also need to be one of the top 500 or 1000 sought-after CEOs in the country. Just like if you want a pro footballer's (NFL) salary, you need to be one of the top 1500 players. Software engineers like me and (probably) you don't get golden parachutes because we're not one in 500, we're one in a million.
- jimbokun 9y ago
  Football players are good comparison. If they don't play well, they are just cut and not paid anything. No "golden parachutes" for poor performance.
  - bkanber 9y ago
    They do get golden parachutes. If you're a pro football player and you get benched in game 1 with a season-ending injury, you still get paid. If you get cut for poor performance before your contract's guaranteed payout is paid, you still get that money. That is the golden parachute.