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Apples to oranges. You should be considering salary to salary. If shareholders want to pay their CEO more directly from their pockets in the form of dilution,
by missedthecue 6y ago
Apples to oranges. You should be considering salary to salary.
If shareholders want to pay their CEO more directly from their pockets in the form of dilution, it doesn't hurt or affect the standard employee in any way.
- mamon 6y agoAnd how does the CEO salary hurt the standard employee? Most of the S&P 500 companies employ around 100k of people. dividing $20M salary equally between them would give each of them $16.6 per month.
- missedthecue 6y agoYou are correct. It doesn't. The entire CEO pay controversy is a wedge issue. The only people who should be complaining about CEO pay are shareholders. (Many do in fact. Carl Icahn for instance.)
- djannzjkzxn 6y agoA CEO gets paid in stock, which the company later buys back with cash. Ergo, the CEO getting stock compensation reduced the amount of money available to pay workers. GAAP requires companies to report stock compensation as an expense because it does actually move wealth around in a zero-sum fashion. It’s not a magic free money tree.
- missedthecue 6y agoNo, the buybacks do. Youre making it seem as if the only way for a CEO to sell stock is if the company buys it back. And it's specifically called a non-cash expense, because it doesn't affect cash (which salary does). You are correct in that it isn't a free money tree. It's paid for by shareholders. If the shareholders wish to pay their CEO $X, the government has no reason to intervene. It doesn't make the employees any better or worse off.
- deleted 6y ago[deleted]