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A 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 wor
by djannzjkzxn 6y ago
A 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]