5 ms·

Honest question: If rank-and-file employees are expected to work for market rates, should executives be expected to work for market rates also? Or do we think t

Honest question: If rank-and-file employees are expected to work for market rates, should executives be expected to work for market rates also? Or do we think they should work for less than market rates? If so, wouldn't Mozilla be at risk of having their executives poached by higher paying companies, which would likely lead to more than 70 employees losing their jobs? If someone's gonna downvote me I'd appreciate some color on your choice too, thanks. ;-)

gpm 7y ago
This assumes that executives being poached would lead to more than 70 employees losing their jobs. If executive pay was rationally based, that might be true. But it appears to rather be the case that executive pay is really high just because executives get a lot of control over how much they are payed. More likely it would result in someone being promoted to executive and business continuing as usual. The poaching companies are going to run out of places to put executives long before Mozilla runs out of competent employees who could run the company. In the meantime Mozilla gains a great reputation as a place to work if you want to get poached to a million dollar salary job, so it gains access to lots more competent engineers. Or at least I think that's the sane argument for why Mozilla executives (and most companies executives) should be payed less. I'm not totally convinced that all the premises are true.
- saas_sam 7y ago
  Hmm perhaps. If my experience is any indication, companies tend to pay everyone as little as they can get away with, execs or no. Execs leave for more money all the time, just as the rest of us do. Their pay is set by their board of directors who tend to have big plans for the equity they're sitting on (not to mention their reputation should stories start circulating that they're in cahoots w/ exec teams to pump their pay!).
  - sciurus 7y ago
    FWIW, the Mozilla Corporation is wholly owned by the Mozilla Foundation. Employees don't have any equity. Salary and bonus are thus the bulk of your compensation at Mozilla no matter what level you're at.
    - saas_sam 7y ago
      I didn't know that! Thank you.
      - sciurus 7y ago
        No worries! It's something that makes Mozilla different from many other high-profile tech companies, where as you advance most of your comp increase comes from stock grants.
    - dv_dt 7y ago
      Are there any notable examples of worker cooperatives in the open source space? It would seem to be an interesting model, at least as an alternative to a non-profit foundation model of organization.
      - fabrice_d 7y ago
        There is Igalia (https://www.igalia.com/ https://www.igalia.com/)
        deleted 7y ago
        [deleted]
  - HappyDreamer 7y ago
    > Execs leave for more money all the time, just as the rest of us do Maybe most people do, but there're also those who are driven by things other than money, and would stay.
- Barrin92 7y ago
  >But it appears to rather be the case that executive pay is really high just because executives get a lot of control over how much they are payed. Why does it appear to you that way? Research suggests that CEOs are overwhelmingly important and have significant impact on the valuation of a company on a scale significantly larger compared their compensation.[1] "For example, open-minded and curious CEOs create an entrepreneurial culture, driven and intense CEOs create a culture of results and achievement, and altruistic CEOs create a culture of empathy and cooperation. Second, as a 20-year review from 1993 to 2012 showed, CEOs’ judgment affects key strategic and managerial processes, such as staffing, financing, and marketing decisions. Third, CEOs’ reputations — their public personas — affect company valuations and stock prices. It has been estimated that 22% of the variability in firm performance can be attributed directly to the CEO. In fact, even when researchers use transcripts of interviews and meeting conversations to infer a CEO’s psychological profile, their ability, strategic thinking skills, and communication skills predict a substantial amount of variability in company performance." I'd suggest you evaluate whether you base your opinion around CEO pay on data evaluating CEO performance or whether it's just an emotional response because 70 workers being laid off just elicits more sympathy than a CEO receiving higher compensation. [1] https://hbr.org/2016/11/are-ceos-overhyped-and-overpaid https://hbr.org/2016/11/are-ceos-overhyped-and-overpaid
  - gpm 7y ago
    There are several things you need to be true to make that statement false. - CEOs having a large impact - we agree here - It is hard to replace the current CEO with a new one who will be, on average, equal (or better) than the existing one. It's the second statement which I question. In a few rare cases (e.g. Elon Musk) there is good evidence to support it, but in the case of Mozilla I don't see it. The research you cite goes both ways. If we can predict who will be a good CEO through an interview CEOs are easier to replace.
    - Barrin92 7y ago
      you not only need to identify them but you also need to pay them market rates or something close if you want to retain them. Mozilla is a company with 500 million in revenue. If they pay their CEO 2 million bucks and that CEO has even a moderately positive impact, then that's a completely rational decision.
gibbonsrcool 7y ago
If there was a maximum wage law then there would be no danger of poaching.
- saas_sam 7y ago
  Hehe, maybe! Or perhaps people would avoid working at places with such laws, as they tend to do currently with other economies that have strict laws that make it hard to do business.
  - wolco 7y ago
    If places like China allow higher pay we may see some people leave. Lucky we have more people than CEO jobs and we will fill them. I would be more concerned if people who picked fruit were being poached with higher pay. We have no one willing to do those jobs.
  - 6gvONxR4sf7o 7y ago
    If the maximum wage affected few enough people, then the effect on where people live their lives would be small. Set it at the 99.9th percentile or 99.99th percentile income or something to that effect. (per-household, those seem to be $1.5M and $7m per year). One in ten thousand people leaving the country might have a tiny effect, especially since the top paid one in ten thousand doesn't have as much correlation as you'd hope with the top most group social good providing one in ten thousand.
  - magduf 7y ago
    >Or perhaps people would avoid working at places with such laws, as they tend to do currently with other economies that have strict laws that make it hard to do business. I have no problem with that. Let them leave. Suppose we set a maximum compensation cap of $10M/year in the US. So executives can no longer earn more than $10M/year in total compensation (salary, bonus, golden parachute, etc.). So a bunch of overpaid execs leave the US. Where exactly are they going to go where they'll 1) be paid more than $10M/year, and 2) actually be able to do these super-high-paying executive jobs effectively (i.e., they need to know the local language, etc.)?
- 7y ago
metajack 7y ago
I think people are more bothered by the fact that compesation drastically increased during a period of poor performance with respect to market share. Also, please provide some evidence that the board chair of a non-profit with an annual budget of $20M has a market rate salary of $2M/yr. Note that Mozilla Foundation also has an executive director (more like $250k/yr) and the Mozilla Corporation had a separate CEO and executive team (whose salaries aren't reported in the Mozilla Foundation form 990).
- saas_sam 7y ago
  Usually the highest paid executives (w/ cash) are the ones at low performing companies because executives don't want to work at low performing companies. From the outside it looks like they're being rewarded for the company performing poorly, but from the inside it's more like "this is what we have to do to keep everyone from jumping ship to Salesforce/Twilio/Tesla/sexier company." But hey, someone with more knowledge of Mozilla than you or I should really be the ones defending this. Maybe some are reading this thread and don't mind chiming in?
  - refurb 7y ago
    This is very true. If you're a company in desperate need of a turn around, you're not going to have a lot of luck in finding a great CEO unless you offer a competitive compensation package and a guaranteed payout. That's why you see failing companies' CEOs walk away with big packages. They won't get a good CEO unless they offer comp comparable to other companies they could work for.
- wolco 7y ago
  10% of their budget? I would reconsider donating, they don't need the money.
  - adev_ 7y ago
    And in my case I would consider double my donation this year. Because we need them and alternative browsers more than ever, because current Tech landscape dramatically need more ethics and less golden boys.
peeters 7y ago
I'm not sure I accept the premise that we've established anything close to an efficient market for executives.
anigbrowl 7y ago
Executives (in general, not at Mozilla in particular) rig the market in their own favor. Everyone knows this. They're not fundamentally better or more competent 99% of the time, just members of a more exclusive club who can easily do deals outside the market.
hartator 7y ago
The thing is their executives are probably not worth their salaries. A lawyer that drove down Firefox market share, image, and the org is still highly depend on Google to survive. Despite all this marketing BS.
ergothus 7y ago
> If rank-and-file employees are expected to work for market rates, should executives be expected to work for market rates also? This feels like a misleading question to ask. There are plenty of disputes about "market rates" for both groups, so the premise isn't one I'd agree to. Market rates are decided by these decisions, not the other way around. If Mozilla was able to get adequate leadership at the rates that didnt grow faster than rank-and-file wages, that would have been a more ethical decision overall. If more companies did the same, market rates would reflect that. Unless you think there was no such leadership available at that rate, in which case we simply disagree.
xhkkffbf 7y ago
Look up the salaries given to Mozilla executives. (Really, just the top.) It's scandalous to hear someone preaching about people giving up paying salaries.
HappyDreamer 7y ago
When there's this `donate.mozilla.org` website, then, no I don't think the execs should have market rates. Either remove the donation website, or find execs who are driven not by money and market rates, but by changing and improving society. I think the latter types of execs, would work better, for making FF popular and increasing revenue. The idea that only execs that need lots of money (market rate) or they'd jump to another company, can do a good job, seems weird to me. I've understood that in theory the Donate-to-Mozilla thing doesn't donate to the execs — but in practice, I'd say yes it does (to some extent at least). > which would likely lead to more than 70 employees losing their jobs? I think (guess) the opposite. That they could all have kept their job and Mozilla could have hired more.

gpm 7y ago

This assumes that executives being poached would lead to more than 70 employees losing their jobs. If executive pay was rationally based, that might be true. But it appears to rather be the case that executive pay is really high just because executives get a lot of control over how much they are payed. More likely it would result in someone being promoted to executive and business continuing as usual. The poaching companies are going to run out of places to put executives long before Mozilla runs out of competent employees who could run the company. In the meantime Mozilla gains a great reputation as a place to work if you want to get poached to a million dollar salary job, so it gains access to lots more competent engineers. Or at least I think that's the sane argument for why Mozilla executives (and most companies executives) should be payed less. I'm not totally convinced that all the premises are true.

saas_sam 7y ago
Hmm perhaps. If my experience is any indication, companies tend to pay everyone as little as they can get away with, execs or no. Execs leave for more money all the time, just as the rest of us do. Their pay is set by their board of directors who tend to have big plans for the equity they're sitting on (not to mention their reputation should stories start circulating that they're in cahoots w/ exec teams to pump their pay!).
- sciurus 7y ago
  FWIW, the Mozilla Corporation is wholly owned by the Mozilla Foundation. Employees don't have any equity. Salary and bonus are thus the bulk of your compensation at Mozilla no matter what level you're at.
  - saas_sam 7y ago
    I didn't know that! Thank you.
    - sciurus 7y ago
      No worries! It's something that makes Mozilla different from many other high-profile tech companies, where as you advance most of your comp increase comes from stock grants.
  - dv_dt 7y ago
    Are there any notable examples of worker cooperatives in the open source space? It would seem to be an interesting model, at least as an alternative to a non-profit foundation model of organization.
    - fabrice_d 7y ago
      There is Igalia (https://www.igalia.com/ https://www.igalia.com/)
      - deleted 7y ago
        [deleted]
- HappyDreamer 7y ago
  > Execs leave for more money all the time, just as the rest of us do Maybe most people do, but there're also those who are driven by things other than money, and would stay.
Barrin92 7y ago
>But it appears to rather be the case that executive pay is really high just because executives get a lot of control over how much they are payed. Why does it appear to you that way? Research suggests that CEOs are overwhelmingly important and have significant impact on the valuation of a company on a scale significantly larger compared their compensation.[1] "For example, open-minded and curious CEOs create an entrepreneurial culture, driven and intense CEOs create a culture of results and achievement, and altruistic CEOs create a culture of empathy and cooperation. Second, as a 20-year review from 1993 to 2012 showed, CEOs’ judgment affects key strategic and managerial processes, such as staffing, financing, and marketing decisions. Third, CEOs’ reputations — their public personas — affect company valuations and stock prices. It has been estimated that 22% of the variability in firm performance can be attributed directly to the CEO. In fact, even when researchers use transcripts of interviews and meeting conversations to infer a CEO’s psychological profile, their ability, strategic thinking skills, and communication skills predict a substantial amount of variability in company performance." I'd suggest you evaluate whether you base your opinion around CEO pay on data evaluating CEO performance or whether it's just an emotional response because 70 workers being laid off just elicits more sympathy than a CEO receiving higher compensation. [1] https://hbr.org/2016/11/are-ceos-overhyped-and-overpaid https://hbr.org/2016/11/are-ceos-overhyped-and-overpaid
- gpm 7y ago
  There are several things you need to be true to make that statement false. - CEOs having a large impact - we agree here - It is hard to replace the current CEO with a new one who will be, on average, equal (or better) than the existing one. It's the second statement which I question. In a few rare cases (e.g. Elon Musk) there is good evidence to support it, but in the case of Mozilla I don't see it. The research you cite goes both ways. If we can predict who will be a good CEO through an interview CEOs are easier to replace.
  - Barrin92 7y ago
    you not only need to identify them but you also need to pay them market rates or something close if you want to retain them. Mozilla is a company with 500 million in revenue. If they pay their CEO 2 million bucks and that CEO has even a moderately positive impact, then that's a completely rational decision.

gibbonsrcool 7y ago

If there was a maximum wage law then there would be no danger of poaching.

saas_sam 7y ago
Hehe, maybe! Or perhaps people would avoid working at places with such laws, as they tend to do currently with other economies that have strict laws that make it hard to do business.
- wolco 7y ago
  If places like China allow higher pay we may see some people leave. Lucky we have more people than CEO jobs and we will fill them. I would be more concerned if people who picked fruit were being poached with higher pay. We have no one willing to do those jobs.
- 6gvONxR4sf7o 7y ago
  If the maximum wage affected few enough people, then the effect on where people live their lives would be small. Set it at the 99.9th percentile or 99.99th percentile income or something to that effect. (per-household, those seem to be $1.5M and $7m per year). One in ten thousand people leaving the country might have a tiny effect, especially since the top paid one in ten thousand doesn't have as much correlation as you'd hope with the top most group social good providing one in ten thousand.
- magduf 7y ago
  >Or perhaps people would avoid working at places with such laws, as they tend to do currently with other economies that have strict laws that make it hard to do business. I have no problem with that. Let them leave. Suppose we set a maximum compensation cap of $10M/year in the US. So executives can no longer earn more than $10M/year in total compensation (salary, bonus, golden parachute, etc.). So a bunch of overpaid execs leave the US. Where exactly are they going to go where they'll 1) be paid more than $10M/year, and 2) actually be able to do these super-high-paying executive jobs effectively (i.e., they need to know the local language, etc.)?
7y ago

metajack 7y ago

I think people are more bothered by the fact that compesation drastically increased during a period of poor performance with respect to market share. Also, please provide some evidence that the board chair of a non-profit with an annual budget of $20M has a market rate salary of $2M/yr. Note that Mozilla Foundation also has an executive director (more like $250k/yr) and the Mozilla Corporation had a separate CEO and executive team (whose salaries aren't reported in the Mozilla Foundation form 990).

saas_sam 7y ago
Usually the highest paid executives (w/ cash) are the ones at low performing companies because executives don't want to work at low performing companies. From the outside it looks like they're being rewarded for the company performing poorly, but from the inside it's more like "this is what we have to do to keep everyone from jumping ship to Salesforce/Twilio/Tesla/sexier company." But hey, someone with more knowledge of Mozilla than you or I should really be the ones defending this. Maybe some are reading this thread and don't mind chiming in?
- refurb 7y ago
  This is very true. If you're a company in desperate need of a turn around, you're not going to have a lot of luck in finding a great CEO unless you offer a competitive compensation package and a guaranteed payout. That's why you see failing companies' CEOs walk away with big packages. They won't get a good CEO unless they offer comp comparable to other companies they could work for.
wolco 7y ago
10% of their budget? I would reconsider donating, they don't need the money.
- adev_ 7y ago
  And in my case I would consider double my donation this year. Because we need them and alternative browsers more than ever, because current Tech landscape dramatically need more ethics and less golden boys.

peeters 7y ago

I'm not sure I accept the premise that we've established anything close to an efficient market for executives.

anigbrowl 7y ago

Executives (in general, not at Mozilla in particular) rig the market in their own favor. Everyone knows this. They're not fundamentally better or more competent 99% of the time, just members of a more exclusive club who can easily do deals outside the market.

hartator 7y ago

The thing is their executives are probably not worth their salaries. A lawyer that drove down Firefox market share, image, and the org is still highly depend on Google to survive. Despite all this marketing BS.

ergothus 7y ago

> If rank-and-file employees are expected to work for market rates, should executives be expected to work for market rates also? This feels like a misleading question to ask. There are plenty of disputes about "market rates" for both groups, so the premise isn't one I'd agree to. Market rates are decided by these decisions, not the other way around. If Mozilla was able to get adequate leadership at the rates that didnt grow faster than rank-and-file wages, that would have been a more ethical decision overall. If more companies did the same, market rates would reflect that. Unless you think there was no such leadership available at that rate, in which case we simply disagree.

xhkkffbf 7y ago

Look up the salaries given to Mozilla executives. (Really, just the top.) It's scandalous to hear someone preaching about people giving up paying salaries.

HappyDreamer 7y ago

When there's this `donate.mozilla.org` website, then, no I don't think the execs should have market rates. Either remove the donation website, or find execs who are driven not by money and market rates, but by changing and improving society. I think the latter types of execs, would work better, for making FF popular and increasing revenue. The idea that only execs that need lots of money (market rate) or they'd jump to another company, can do a good job, seems weird to me. I've understood that in theory the Donate-to-Mozilla thing doesn't donate to the execs — but in practice, I'd say yes it does (to some extent at least). > which would likely lead to more than 70 employees losing their jobs? I think (guess) the opposite. That they could all have kept their job and Mozilla could have hired more.