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This isn't a fair representation of CEO pay. Jack Dorsey is not paid $1.40/year, his share ownership is paying him out millions per year. What is the validity

by vecinu 6y ago

This isn't a fair representation of CEO pay. Jack Dorsey is not paid $1.40/year, his share ownership is paying him out millions per year. What is the validity of this data set? Netflix Median Pay being lower than Google's doesn't sit right with me. Broadcom's Median Pay is $354k? Impossible. Again, I'm not knocking the idea as it's a good thought exercise but it's important to be realistic and factual when coming up with conclusions.

rococode 6y ago
A lot of companies with <$15k median pay as well. Seeing as US federal minimum wage is ~$15k (higher than that in more than half of states) and there are companies listed with even <$10k median pay, either part-time or outsourced workers are being included, neither of which seems like a fair comparison to make.
- kpmcc 6y ago
  Why don't you think it's fair? Legit ask, not a snipe.
  - gvhst 6y ago
    Same reason why it’s not accurate to include a worker who work 1 month and quit as having made $10k/year on an annual salary of $120k.
  - bhupy 6y ago
    It needs to be PPP adjusted, like any global comparison.
  - TremendousJudge 6y ago
    Don't know about outsourced, but part-time isn't a fair comparison since their hourly wage could be comparatively high but their total wage low. It would be fair if salaries were given per-hour, but I'm pretty sure that top executives don't have the same concept of working hours as low level employees
  - nomel 6y ago
    If it’s not normalized for time worked, then it’s not really pay ratio that represents the value a company sees in an employee, or the economic comfort of that employee. So, what’s it really trying to show? Some jobs don’t require full time work, like consultation or janitorial services, and these jobs are structured around this, by having multiple clients. Trying to take any direct meaning from these ratios isn’t really possible since another dimension is required for these numbers to have any real use.
  - azinman2 6y ago
    Because it must include labor in other countries where the pay scale is very different. A barista at Starbucks in NYC is going to have a different income than one in Vietnam. By making these all US companies, you are comparing the CEO pay of an American against an average of global norms which are far lower. It would be useful (to me) to include another column that's just the median pay of US-based employees. Another interesting tact would be to show what a Vietnamese CEO makes versus their company's median pay, or what this looked like in the US in 1950, for example.
titanomachy 6y ago
Does Netflix have full-time employees making content? Or do they just outsource to other studios? It takes a lot of people to make shows/movies, and not all of them are paid especially well. Could easily outnumber the tech employees.
- notJim 6y ago
  Netflix still has employees in warehouses shipping DVDs, no?
  - azinman2 6y ago
    Are they employees or contractors?
dmurray 6y ago
Is Jack Dorsey paid any more than any other billionaire who owns a few Twitter shares? He could choose to not work for Twitter (some people might say he already has...) and still earn the same from his Twitter holdings, so it seems reasonable to say his compensation for being Twitter CEO is just the $1.40/year. And he "only" owns 2% of Twitter, so it's definitely reasonable that some other rich person could have the same size shareholding as a passive investment.
- femiagbabiaka 6y ago
  if you're being pedantic? no, but it's obvious that if you massively frontload your effective compensation in the form of stock in your company and employees coming in will never make as much on the stock as you do, that is still a gap in compensation. it doesn't pass the smell test for most people. WeWork is a perfect example of this
  - dmurray 6y ago
    I would say that the overwhelming thing that separates Jack Dorsey from Twitter employees financially is that he is massively wealthy, not that he earns more for working there. If he founded a new small startup today, valued at a nominal amount, and paid all employees including himself $75k/year, wouldn't there be the same inequality? You'd hardly argue that he should need to light on fire $100mm/year for the privilege of working at the new startup, in order to make his compensation somehow the same as the other employees.

by vecinu 6y ago

rococode 6y ago

A lot of companies with <$15k median pay as well. Seeing as US federal minimum wage is ~$15k (higher than that in more than half of states) and there are companies listed with even <$10k median pay, either part-time or outsourced workers are being included, neither of which seems like a fair comparison to make.

kpmcc 6y ago
Why don't you think it's fair? Legit ask, not a snipe.
- gvhst 6y ago
  Same reason why it’s not accurate to include a worker who work 1 month and quit as having made $10k/year on an annual salary of $120k.
- bhupy 6y ago
  It needs to be PPP adjusted, like any global comparison.
- TremendousJudge 6y ago
  Don't know about outsourced, but part-time isn't a fair comparison since their hourly wage could be comparatively high but their total wage low. It would be fair if salaries were given per-hour, but I'm pretty sure that top executives don't have the same concept of working hours as low level employees
- nomel 6y ago
  If it’s not normalized for time worked, then it’s not really pay ratio that represents the value a company sees in an employee, or the economic comfort of that employee. So, what’s it really trying to show? Some jobs don’t require full time work, like consultation or janitorial services, and these jobs are structured around this, by having multiple clients. Trying to take any direct meaning from these ratios isn’t really possible since another dimension is required for these numbers to have any real use.
- azinman2 6y ago
  Because it must include labor in other countries where the pay scale is very different. A barista at Starbucks in NYC is going to have a different income than one in Vietnam. By making these all US companies, you are comparing the CEO pay of an American against an average of global norms which are far lower. It would be useful (to me) to include another column that's just the median pay of US-based employees. Another interesting tact would be to show what a Vietnamese CEO makes versus their company's median pay, or what this looked like in the US in 1950, for example.

titanomachy 6y ago

Does Netflix have full-time employees making content? Or do they just outsource to other studios? It takes a lot of people to make shows/movies, and not all of them are paid especially well. Could easily outnumber the tech employees.

notJim 6y ago
Netflix still has employees in warehouses shipping DVDs, no?
- azinman2 6y ago
  Are they employees or contractors?

dmurray 6y ago

Is Jack Dorsey paid any more than any other billionaire who owns a few Twitter shares? He could choose to not work for Twitter (some people might say he already has...) and still earn the same from his Twitter holdings, so it seems reasonable to say his compensation for being Twitter CEO is just the $1.40/year. And he "only" owns 2% of Twitter, so it's definitely reasonable that some other rich person could have the same size shareholding as a passive investment.

femiagbabiaka 6y ago
if you're being pedantic? no, but it's obvious that if you massively frontload your effective compensation in the form of stock in your company and employees coming in will never make as much on the stock as you do, that is still a gap in compensation. it doesn't pass the smell test for most people. WeWork is a perfect example of this
- dmurray 6y ago
  I would say that the overwhelming thing that separates Jack Dorsey from Twitter employees financially is that he is massively wealthy, not that he earns more for working there. If he founded a new small startup today, valued at a nominal amount, and paid all employees including himself $75k/year, wouldn't there be the same inequality? You'd hardly argue that he should need to light on fire $100mm/year for the privilege of working at the new startup, in order to make his compensation somehow the same as the other employees.