8 ms·

Left out Imperva, which was bought by Thoma Bravo in January. 150 people let go while the CEO makes $15 million. Mismanaged incentives - employees don't matter

Left out Imperva, which was bought by Thoma Bravo in January. 150 people let go while the CEO makes $15 million. Mismanaged incentives - employees don't matter, just shareholders.

stevholt 8y ago
Just make the employees shareholders
- _Codemonkeyism 8y ago
  If they are not majority shareholders, losing their job will probably have more impact than the share gains.
  - sam_lowry_ 8y ago
    Well, that's the idea of Lenin.
    - C1sc0cat 8y ago
      Rochdale Pioneers Actually :-) Yes I do know there where precursors to worker coops in Italy prior to that.
      - _Codemonkeyism 8y ago
        I've followed the up and downs of Mondragon for the last decades. Raiffeisen is known in Germany.
        C1sc0cat 8y ago
        Mondragon has a bit of a rep amongst other coops
        fmajid 8y ago
        Could you elaborate?
        C1sc0cat 8y ago
        Have taken over other coops and made some members redundant - this is from when I worked in coop in the early 2000's
        _Codemonkeyism 8y ago
        They also have the problem of rising non-coop employees I think.
- coldtea 8y ago
  Well, that's the idea of Marx.
  - roenxi 8y ago
    Marx had a lot of ideas; some of them were probably good. Involving workers in the ownership of companies seems like a good idea even if Marx supported it. Marxism as practiced in places like, eg, Russia fell down because they disrupted the ability of the market to send and receive accurate price signals and over time that led to catastrophically misallocated resources. Many of the people who want socialism seem to support disabling said price signals, because they are unfair, which is why socialism is so dangerous - those price signals are very important. However, as long as they face the same risk of bankruptcy as everyone else, workers co-ops with the ability for outsiders to invest are probably a superior model of ownership.
    - coldtea 8y ago
      >Marx had a lot of ideas; some of them were probably good. Involving workers in the ownership of companies seems like a good idea even if Marx supported it. I'm not saying otherwise. In fact, a lot of Marx ideas were good. He also famously said "I'm not a marxist".
    - Frost1x 8y ago
      As implemented in the current US economy, those price signals are also suppressed through collusion, cronyism, and near monopolies so it's not an exclusive issue of socialism implementations. Many markets are stagnant and do not offer healthy competition. There's a fair share of markets that still offer healthy competition, but from my perspective, it seems like the end goal of market optimization almost inevitably leads to monopolization which always leads to stagnation. True competition and an informed/economically conscious consumer market are key requirements to this signaling process. We don't have a lot of either in many markets.
      - RA_Fisher 8y ago
        One of the great things about capitalism is that it has some redundancy and resiliency. Competition may also lead to new features (markets), etc. On the other hand, this is duplicative and wasteful. Contrast the duplication (redundancy) of the capitalist system to the one producer model of communism. Less duplication but less resiliency and less ability to find new features (market). I think when a market is young and returns are high that it makes sense for many producers. However as a market matures, we can shed some of the duplication and allocate it to other new markets. If the monopolist restricts quantity sold? Easy, it increases the tears for a new entrant. The system manages itself in this way (in reality no system at all, it's decentralized coordination).
- WhiteSource1 8y ago
  Most public companies offer employee stock benefits. That matters for short-term stock price, as much as possible. But ultimately the employees are only minority shareholders, so don't have enough to actually increase value. (The main shareholders are institutional investors, who have a lot of clout.) For private companies, of course, it's a different story and the founders/board/investors often have more clout. Private companies are also less likely to grant (non-liquid) equity, but rather offer it as options, which is more like a lotto ticket.
ttul 8y ago
Umm... these are corporations. They are owned by shareholders and exist for the benefit of shareholders. I don’t see any subterfuge here.
- dwaltrip 8y ago
  If you don't think employees matter, that is an issue. It is overly reductionist to say that a company exists solely for the benefit of the shareholders. Such a model is a rather incomplete description of reality.
  - magduf 8y ago
    >It is overly reductionist to say that a company exists solely for the benefit of the shareholders. It's not reductionist at all; that's exactly how it is in a purely capitalist system, and how it is in America. It's different in other countries, like European ones and Japan, where companies really do have a responsibility to employees and society at large, but in America they don't have any such responsibility, no matter how much you would like it to be otherwise.
    - Hydraulix989 8y ago
      That’s right, the truth hurts. Here in America (especially in California) employment is at-will, and companies act in their shareholders’ interests. It is MUCH more difficult to fire employees in Scandinavia and in Asia where employees have much more rights, and there are legal protections in place. I see that you downvoted this 100% factual parent post because it goes against your rosy moral picture about how you feel America should work.
    - WhiteSource1 8y ago
      Except for one thing: Engaged employees increase shareholder value
      - magduf 8y ago
        That may be, but it is important? What's most important is executive compensation. From everything I've read, executives at American corporations get far more compensation and big golden parachutes than their European counterparts. So obviously, the American system is working much better for the people who really matter.
pardonmyfrench 8y ago
Any company where the CEO makes over 25 times the average worker is mismanaged. Are they honestly suggesting that the CEO gets 200 times more work in, or has 200 times the experience, or maybe 200 times the connections? Or some combination? Which is it?
- coltonv 8y ago
  What the CEO really has is 200x the affect on the company. A 15m bonus for a CEO may sound ridiculous but if picking that CEO led the company to 50m increase in revenue over an average CEO than it was well worth it to hire them. Or at least, that's how CEOs sell themselves. I think that idea makes sense, but only if the company does well. If it doesn't the execs still have the power to grant themselves massive bonuses before the shareholders can react. It's kind of like the classic 2% fee investment manager, they'll say they are the best at what they do, when of course they almost never beat the market. Still, regardless of how they do, they make bank. I think what really needs to happen is people need to learn to stop trusting people just because they talk smooth and make an optimistic pitch, and start focusing executive salaries on being entirely results based, with only a modest base salary.
  - Frost1x 8y ago
    If I've learned anything in my life, it's that confidence trumps competence when it comes to most people making judgement evaluations. People love confidence and falsely correlate it with competence (maybe it's an old survival trait we humans inherited before manipulative language came about). If you're competent, you likely hesitate because most cases are truly not clear cut when viewed through a lens of knowledge with a conscious. It's easy to come off as confident when you're ignorant or know that simply appearing confident has a positive effect. The real key is to be competent and hide your hesitations/in decisions with confidence. The real problem is discerning which a person is: ignorant, manipulative, or a great leader--so confidence isn't a good measure for me. The only good measure is a historical record of good decisions or clear communication from leadership.
  - amoorthy 8y ago
    I really like this thoughtful reply. One thing to add: it's unlikely that the CEO's performance will change that much after a certain payout. S/he will likely put in the same effort beyond some compensation figure, if only because most want to succeed first and foremost for their pride. A CEO who acts like a true owner would know this and reallocate salaries as needed to keep employees happy and motivated.
notTyler 8y ago
Yeah. My last company got bought by them and was told that in spite of their rep for shuttering and turning companies into shells this was absolutely not the case. Cue a few months later almost 10 percent of staff let go, hiring freeze for everyone except the sales department, and closing of the Chicago office to make money. They won't hire new devs even when they quit. If a company gets bought by them and you work there, cash any immediate bonuses and start looking for a new job.
- WhiteSource1 8y ago
  Because it's not just turning into shells. It's also getting rid of X and replacing them with Y. Replacing workers with workers in other geos or just replacing them with someone else, so the headcount stays steady or even grows but it's a different head.

Left out Imperva, which was bought by Thoma Bravo in January. 150 people let go while the CEO makes $15 million. Mismanaged incentives - employees don't matter, just shareholders.

stevholt 8y ago

Just make the employees shareholders

_Codemonkeyism 8y ago
If they are not majority shareholders, losing their job will probably have more impact than the share gains.
- sam_lowry_ 8y ago
  Well, that's the idea of Lenin.
  - C1sc0cat 8y ago
    Rochdale Pioneers Actually :-) Yes I do know there where precursors to worker coops in Italy prior to that.
    - _Codemonkeyism 8y ago
      I've followed the up and downs of Mondragon for the last decades. Raiffeisen is known in Germany.
      - C1sc0cat 8y ago
        Mondragon has a bit of a rep amongst other coops
        fmajid 8y ago
        Could you elaborate?
        C1sc0cat 8y ago
        Have taken over other coops and made some members redundant - this is from when I worked in coop in the early 2000's
        _Codemonkeyism 8y ago
        They also have the problem of rising non-coop employees I think.
coldtea 8y ago
Well, that's the idea of Marx.
- roenxi 8y ago
  Marx had a lot of ideas; some of them were probably good. Involving workers in the ownership of companies seems like a good idea even if Marx supported it. Marxism as practiced in places like, eg, Russia fell down because they disrupted the ability of the market to send and receive accurate price signals and over time that led to catastrophically misallocated resources. Many of the people who want socialism seem to support disabling said price signals, because they are unfair, which is why socialism is so dangerous - those price signals are very important. However, as long as they face the same risk of bankruptcy as everyone else, workers co-ops with the ability for outsiders to invest are probably a superior model of ownership.
  - coldtea 8y ago
    >Marx had a lot of ideas; some of them were probably good. Involving workers in the ownership of companies seems like a good idea even if Marx supported it. I'm not saying otherwise. In fact, a lot of Marx ideas were good. He also famously said "I'm not a marxist".
  - Frost1x 8y ago
    As implemented in the current US economy, those price signals are also suppressed through collusion, cronyism, and near monopolies so it's not an exclusive issue of socialism implementations. Many markets are stagnant and do not offer healthy competition. There's a fair share of markets that still offer healthy competition, but from my perspective, it seems like the end goal of market optimization almost inevitably leads to monopolization which always leads to stagnation. True competition and an informed/economically conscious consumer market are key requirements to this signaling process. We don't have a lot of either in many markets.
    - RA_Fisher 8y ago
      One of the great things about capitalism is that it has some redundancy and resiliency. Competition may also lead to new features (markets), etc. On the other hand, this is duplicative and wasteful. Contrast the duplication (redundancy) of the capitalist system to the one producer model of communism. Less duplication but less resiliency and less ability to find new features (market). I think when a market is young and returns are high that it makes sense for many producers. However as a market matures, we can shed some of the duplication and allocate it to other new markets. If the monopolist restricts quantity sold? Easy, it increases the tears for a new entrant. The system manages itself in this way (in reality no system at all, it's decentralized coordination).
WhiteSource1 8y ago
Most public companies offer employee stock benefits. That matters for short-term stock price, as much as possible. But ultimately the employees are only minority shareholders, so don't have enough to actually increase value. (The main shareholders are institutional investors, who have a lot of clout.) For private companies, of course, it's a different story and the founders/board/investors often have more clout. Private companies are also less likely to grant (non-liquid) equity, but rather offer it as options, which is more like a lotto ticket.

ttul 8y ago

Umm... these are corporations. They are owned by shareholders and exist for the benefit of shareholders. I don’t see any subterfuge here.

dwaltrip 8y ago
If you don't think employees matter, that is an issue. It is overly reductionist to say that a company exists solely for the benefit of the shareholders. Such a model is a rather incomplete description of reality.
- magduf 8y ago
  >It is overly reductionist to say that a company exists solely for the benefit of the shareholders. It's not reductionist at all; that's exactly how it is in a purely capitalist system, and how it is in America. It's different in other countries, like European ones and Japan, where companies really do have a responsibility to employees and society at large, but in America they don't have any such responsibility, no matter how much you would like it to be otherwise.
  - Hydraulix989 8y ago
    That’s right, the truth hurts. Here in America (especially in California) employment is at-will, and companies act in their shareholders’ interests. It is MUCH more difficult to fire employees in Scandinavia and in Asia where employees have much more rights, and there are legal protections in place. I see that you downvoted this 100% factual parent post because it goes against your rosy moral picture about how you feel America should work.
  - WhiteSource1 8y ago
    Except for one thing: Engaged employees increase shareholder value
    - magduf 8y ago
      That may be, but it is important? What's most important is executive compensation. From everything I've read, executives at American corporations get far more compensation and big golden parachutes than their European counterparts. So obviously, the American system is working much better for the people who really matter.

pardonmyfrench 8y ago

Any company where the CEO makes over 25 times the average worker is mismanaged. Are they honestly suggesting that the CEO gets 200 times more work in, or has 200 times the experience, or maybe 200 times the connections? Or some combination? Which is it?

coltonv 8y ago
What the CEO really has is 200x the affect on the company. A 15m bonus for a CEO may sound ridiculous but if picking that CEO led the company to 50m increase in revenue over an average CEO than it was well worth it to hire them. Or at least, that's how CEOs sell themselves. I think that idea makes sense, but only if the company does well. If it doesn't the execs still have the power to grant themselves massive bonuses before the shareholders can react. It's kind of like the classic 2% fee investment manager, they'll say they are the best at what they do, when of course they almost never beat the market. Still, regardless of how they do, they make bank. I think what really needs to happen is people need to learn to stop trusting people just because they talk smooth and make an optimistic pitch, and start focusing executive salaries on being entirely results based, with only a modest base salary.
- Frost1x 8y ago
  If I've learned anything in my life, it's that confidence trumps competence when it comes to most people making judgement evaluations. People love confidence and falsely correlate it with competence (maybe it's an old survival trait we humans inherited before manipulative language came about). If you're competent, you likely hesitate because most cases are truly not clear cut when viewed through a lens of knowledge with a conscious. It's easy to come off as confident when you're ignorant or know that simply appearing confident has a positive effect. The real key is to be competent and hide your hesitations/in decisions with confidence. The real problem is discerning which a person is: ignorant, manipulative, or a great leader--so confidence isn't a good measure for me. The only good measure is a historical record of good decisions or clear communication from leadership.
- amoorthy 8y ago
  I really like this thoughtful reply. One thing to add: it's unlikely that the CEO's performance will change that much after a certain payout. S/he will likely put in the same effort beyond some compensation figure, if only because most want to succeed first and foremost for their pride. A CEO who acts like a true owner would know this and reallocate salaries as needed to keep employees happy and motivated.

notTyler 8y ago

Yeah. My last company got bought by them and was told that in spite of their rep for shuttering and turning companies into shells this was absolutely not the case. Cue a few months later almost 10 percent of staff let go, hiring freeze for everyone except the sales department, and closing of the Chicago office to make money. They won't hire new devs even when they quit. If a company gets bought by them and you work there, cash any immediate bonuses and start looking for a new job.

WhiteSource1 8y ago
Because it's not just turning into shells. It's also getting rid of X and replacing them with Y. Replacing workers with workers in other geos or just replacing them with someone else, so the headcount stays steady or even grows but it's a different head.