6 ms·

The fact that there are ceos who get paid 200x more, than an employee, is already outrageous.

by pmlnr 6y ago

jstanley 6y ago
Why?
- wrren 6y ago
  Because it's an expression of a corrupt system where CEO pay is public, and thus it's easy for candidates to negotiate, but employees are strongly discouraged from sharing their own pay data or are prevented from seeing the company's own pay bands. Where swathes of employees are let go when a company underperforms, but no-one is held accountable for making the strategic blunders that got them there. Where employees who try to unionize are targeted by their employers and harassed out or outright fired because companies are terrified of collective bargaining.
  - MrBuddyCasino 6y ago
    > Where swathes of employees are let go when a company underperforms, but no-one is held accountable for making the strategic blunders that got them there. Execs should have more Skin in the Game. But it is also a fact that the higher you go in the hierarchy, the riskier your job gets. You get fired easier, in shorter amounts of time and sometimes just for backstabbing/political reasons. The average tenure of execs has gotten shorter and shorter over the last decades. Finding a new job is also considerably harder, as the market size gets smaller and smaller the higher you go in the pyramid. There are bad and questionable reasons why compensations are high, but also some good and reasonable ones. If markets seem irrational, chances are good you don’t fully understand them.
    - Miner49er 6y ago
      Most CEO's golden parachutes are worth more then some workers make in a decade or even their lifetime. It doesn't matter if they are at a higher risk of being fired or have a harder time finding a job afterwards.
    - mehrdadn 6y ago
      > The average tenure of execs has gotten shorter and shorter over the last decades. "Reduced tenure" when you're making plenty more money than needed to avoid having to work the difference in the first place hardly seems like such a catastrophic outcome. So many people can only dream of making enough money so they can retire early and not have to work at all. I know if you pay me a million dollars I wouldn't exactly shed a tear if I don't find a job anytime soon. I'm not sure I'd be dying to look for one either, and if somehow I were, I wouldn't feel entitled to anyone's sympathy if I don't find one, let alone feel entitled to offloading my emotional "cost" onto their wallets. And I'm not even trying to take a side here. I do get that the situation is not as trivial as some portray it. But in your effort to illustrate that fact, you're oversimplifying massively in the other direction and ignoring some pretty salient facts. > You get fired easier I haven't particularly noticed CEOs match the turnover rates of their average employees, but I suppose you have data to the contrary and it's just my ignorance?
    - pydry 6y ago
      Risky like when Adam Neumann was fired from WeWork with a $1.7 billion severance package? >If markets seem irrational, chances are good you don’t fully understand them. So not a racket then?
      - kakd 6y ago
        Neumann was a co-founder. Hired CEOs will almost never make it to billionaire status (Ballmer, Schmidt and Damon are the only notable exceptions I know of).
        pydry 6y ago
        That might be so, yet it still seems that CEOs can do pretty magnificently out of being fired even when they fuck up really badly.
    - tpetry 6y ago
      I wouldnt call being a highly paid ceo be „riskier“. The ones not fired because of fraud get a new position ant a new company again very „fast“. Even the incompetent ones with a track history of companies dying after they came.
    - heavenlyblue 6y ago
      Obviously there’s more reasons to backstab when the pay is hundreds of times that of a regular employee
    - Talanes 6y ago
      >You get fired easier, in shorter amounts of time Your average retail worker is responsible for following confusing sets of rules that are rarely fully modeled, if even fully understood, while working under cameras that are selectively and obliquely monitored. If someone wants them fired, or the place just needs to reduce staff, providing a justification is very low-effort.
    - deleted 6y ago
      [deleted]
    - quickthrower2 6y ago
      I’d love to see the gardens of these poor CEOs give the generous gardening leave arrangements being paid out when they are fired.
- nandhinianand 6y ago
  Uhmm.. mostly because the value an employee(CEO or not) brings to a business is already a probability function with variables(one of them simply being time and it's impact a unknown) and different expected values. If we believe that result-oriented rewarding is practiced, it's questionable that it can be estimated how much of an impact CEO can have and how it can be 200x of other employee. Infact, the reverse question of why pay a CEO a high salary should be the more common question, rather than why not. -- I am skipping unknown unknowns for now, but you use your imagination.
Galanwe 6y ago
Then why isn't everyone becoming CEO?
- Talanes 6y ago
  When someone calls "Shotgun" do you ask "Why don't we all ride shotgun?" Because someone has to actually make the car move.
- RivieraKid 6y ago
  Because the number of CEO positions much lower than the number of people.
  - gambiting 6y ago
    What do you mean? Everyone can start their own company and become a CEO overnight. The answer isn't what you said it is.
    - quickthrower2 6y ago
      Sure you can pay yourself 200x nothing! But the argument is people are fighting for those well paid posts at established enterprises.
      - robertlagrant 6y ago
        Yeah. The equivalent would be saying the lottery is easy by only looking at lottery winners.
    - RivieraKid 6y ago
      I mean the number of CEO positions at companies that make a lot of money. In order to start such a company you need many things which most people don't have, including luck, timing and access to capital.
tootahe45 6y ago
Take it up with your company. If you can't change it then leave and become your own CEO?..
tluyben2 6y ago
Well some CEO's maybe should; I don't know how it is to run companies with 50000+ employees; as a long term CTO myself, I look to work with CEO's who are not greedy and spread the wealth with the employees and who are not just out there to buy jets and ferrari's. (Actually, I have a natural aversion to people who buy sportscars with their wealth as I find it rancid and decadent in this day-and-age, but that's another story. Also probably because I'm Dutch and know many very rich people over there who drive shit cars, live in small houses and go by car and caravan to France on vacation.) I do see why CEO's (and all c-level if they are founders, have board seats, are early investors, have a high amount of %) should be compensated well over employees; they take the risks. Or rather; they should take the risks. If times are bad, I am looking to work with people who cut their own salary or reinvest to keep the employees and not just throw everyone out and take the bonus and then close up shop (which seems to happen a lot with startups right now). 200x is over the top I guess; I cannot see how you bring that much more value than your employees. Like said; no idea how it works at real enterprises, but in companies I see with few 100 to few 1000 people; I can walk around and remove a few dozen people (employees) and the entire company will grind to a halt. There are always vital things that are governed by a few (early?) employees which, if removed, are extremely hard to replace. This means that at least those employees cannot earn 200x less than the CEO, not 100x less either. I saw a post on Twitter a few days ago about those kind of employees of these kind of companies starting a company together, resigning and then having the new company acqui-hired by the old company for many millions. That's how you should handle that situation if you have a CEO that is that greedy indeed.
- WalterBright 6y ago
  > 200x is over the top I guess; I cannot see how you bring that much more value than your employees. Steve Jobs took over Apple when it was 90 days from bankruptcy and turned it into the most valuable company in the world. Apple had a series of CEOs before Jobs that didn't. Essentially, the CEO decides which hill to climb. The right hill, the company makes $$$. The wrong hill, the company languishes. That's worth a heckuva lot of money. Nobody else in the company has that kind of influence over its fortunes.
  - 6y ago
asiachick 6y ago
Why? In Japan my CEO gets paid $1 million year and I make $50k a year. (20x) In the USA my CEO gets paid $60 million and I get paid $300k a year (200x) I'd much rather have the CEO getting paid 200x
- fsh 6y ago
  I don't see a reason why these figures should be correlated.
- tchaffee 6y ago
  You would make more in Denmark than in the US, and your CEO would make far less. Your one data point fails pretty quickly.
Funes- 6y ago
I think making companies forcibly reinvest a generous fraction of net benefits--into increasing minimum salaries, as well as research and development, sustainability, etcetera--would be a good approach to solve that problem. Establishing a limit on net benefits past a given amount or percentage over expenses, and forcibly allocating that portion to improving every employee's conditions, every product or service's quality, would only do good, in my opinion.

The fact that there are ceos who get paid 200x more, than an employee, is already outrageous.

by pmlnr 6y ago

The fact that there are ceos who get paid 200x more, than an employee, is already outrageous.

jstanley 6y ago

Why?

wrren 6y ago
Because it's an expression of a corrupt system where CEO pay is public, and thus it's easy for candidates to negotiate, but employees are strongly discouraged from sharing their own pay data or are prevented from seeing the company's own pay bands. Where swathes of employees are let go when a company underperforms, but no-one is held accountable for making the strategic blunders that got them there. Where employees who try to unionize are targeted by their employers and harassed out or outright fired because companies are terrified of collective bargaining.
- MrBuddyCasino 6y ago
  > Where swathes of employees are let go when a company underperforms, but no-one is held accountable for making the strategic blunders that got them there. Execs should have more Skin in the Game. But it is also a fact that the higher you go in the hierarchy, the riskier your job gets. You get fired easier, in shorter amounts of time and sometimes just for backstabbing/political reasons. The average tenure of execs has gotten shorter and shorter over the last decades. Finding a new job is also considerably harder, as the market size gets smaller and smaller the higher you go in the pyramid. There are bad and questionable reasons why compensations are high, but also some good and reasonable ones. If markets seem irrational, chances are good you don’t fully understand them.
  - Miner49er 6y ago
    Most CEO's golden parachutes are worth more then some workers make in a decade or even their lifetime. It doesn't matter if they are at a higher risk of being fired or have a harder time finding a job afterwards.
  - mehrdadn 6y ago
    > The average tenure of execs has gotten shorter and shorter over the last decades. "Reduced tenure" when you're making plenty more money than needed to avoid having to work the difference in the first place hardly seems like such a catastrophic outcome. So many people can only dream of making enough money so they can retire early and not have to work at all. I know if you pay me a million dollars I wouldn't exactly shed a tear if I don't find a job anytime soon. I'm not sure I'd be dying to look for one either, and if somehow I were, I wouldn't feel entitled to anyone's sympathy if I don't find one, let alone feel entitled to offloading my emotional "cost" onto their wallets. And I'm not even trying to take a side here. I do get that the situation is not as trivial as some portray it. But in your effort to illustrate that fact, you're oversimplifying massively in the other direction and ignoring some pretty salient facts. > You get fired easier I haven't particularly noticed CEOs match the turnover rates of their average employees, but I suppose you have data to the contrary and it's just my ignorance?
  - pydry 6y ago
    Risky like when Adam Neumann was fired from WeWork with a $1.7 billion severance package? >If markets seem irrational, chances are good you don’t fully understand them. So not a racket then?
    - kakd 6y ago
      Neumann was a co-founder. Hired CEOs will almost never make it to billionaire status (Ballmer, Schmidt and Damon are the only notable exceptions I know of).
      - pydry 6y ago
        That might be so, yet it still seems that CEOs can do pretty magnificently out of being fired even when they fuck up really badly.
  - tpetry 6y ago
    I wouldnt call being a highly paid ceo be „riskier“. The ones not fired because of fraud get a new position ant a new company again very „fast“. Even the incompetent ones with a track history of companies dying after they came.
  - heavenlyblue 6y ago
    Obviously there’s more reasons to backstab when the pay is hundreds of times that of a regular employee
  - Talanes 6y ago
    >You get fired easier, in shorter amounts of time Your average retail worker is responsible for following confusing sets of rules that are rarely fully modeled, if even fully understood, while working under cameras that are selectively and obliquely monitored. If someone wants them fired, or the place just needs to reduce staff, providing a justification is very low-effort.
  - deleted 6y ago
    [deleted]
  - quickthrower2 6y ago
    I’d love to see the gardens of these poor CEOs give the generous gardening leave arrangements being paid out when they are fired.
nandhinianand 6y ago
Uhmm.. mostly because the value an employee(CEO or not) brings to a business is already a probability function with variables(one of them simply being time and it's impact a unknown) and different expected values. If we believe that result-oriented rewarding is practiced, it's questionable that it can be estimated how much of an impact CEO can have and how it can be 200x of other employee. Infact, the reverse question of why pay a CEO a high salary should be the more common question, rather than why not. -- I am skipping unknown unknowns for now, but you use your imagination.

Galanwe 6y ago

Then why isn't everyone becoming CEO?

Talanes 6y ago
When someone calls "Shotgun" do you ask "Why don't we all ride shotgun?" Because someone has to actually make the car move.
RivieraKid 6y ago
Because the number of CEO positions much lower than the number of people.
- gambiting 6y ago
  What do you mean? Everyone can start their own company and become a CEO overnight. The answer isn't what you said it is.
  - quickthrower2 6y ago
    Sure you can pay yourself 200x nothing! But the argument is people are fighting for those well paid posts at established enterprises.
    - robertlagrant 6y ago
      Yeah. The equivalent would be saying the lottery is easy by only looking at lottery winners.
  - RivieraKid 6y ago
    I mean the number of CEO positions at companies that make a lot of money. In order to start such a company you need many things which most people don't have, including luck, timing and access to capital.

tootahe45 6y ago

Take it up with your company. If you can't change it then leave and become your own CEO?..

tluyben2 6y ago

Well some CEO's maybe should; I don't know how it is to run companies with 50000+ employees; as a long term CTO myself, I look to work with CEO's who are not greedy and spread the wealth with the employees and who are not just out there to buy jets and ferrari's. (Actually, I have a natural aversion to people who buy sportscars with their wealth as I find it rancid and decadent in this day-and-age, but that's another story. Also probably because I'm Dutch and know many very rich people over there who drive shit cars, live in small houses and go by car and caravan to France on vacation.) I do see why CEO's (and all c-level if they are founders, have board seats, are early investors, have a high amount of %) should be compensated well over employees; they take the risks. Or rather; they should take the risks. If times are bad, I am looking to work with people who cut their own salary or reinvest to keep the employees and not just throw everyone out and take the bonus and then close up shop (which seems to happen a lot with startups right now). 200x is over the top I guess; I cannot see how you bring that much more value than your employees. Like said; no idea how it works at real enterprises, but in companies I see with few 100 to few 1000 people; I can walk around and remove a few dozen people (employees) and the entire company will grind to a halt. There are always vital things that are governed by a few (early?) employees which, if removed, are extremely hard to replace. This means that at least those employees cannot earn 200x less than the CEO, not 100x less either. I saw a post on Twitter a few days ago about those kind of employees of these kind of companies starting a company together, resigning and then having the new company acqui-hired by the old company for many millions. That's how you should handle that situation if you have a CEO that is that greedy indeed.

WalterBright 6y ago
> 200x is over the top I guess; I cannot see how you bring that much more value than your employees. Steve Jobs took over Apple when it was 90 days from bankruptcy and turned it into the most valuable company in the world. Apple had a series of CEOs before Jobs that didn't. Essentially, the CEO decides which hill to climb. The right hill, the company makes $$$. The wrong hill, the company languishes. That's worth a heckuva lot of money. Nobody else in the company has that kind of influence over its fortunes.
- 6y ago

asiachick 6y ago

Why? In Japan my CEO gets paid $1 million year and I make $50k a year. (20x) In the USA my CEO gets paid $60 million and I get paid $300k a year (200x) I'd much rather have the CEO getting paid 200x

fsh 6y ago
I don't see a reason why these figures should be correlated.
tchaffee 6y ago
You would make more in Denmark than in the US, and your CEO would make far less. Your one data point fails pretty quickly.

Funes- 6y ago

I think making companies forcibly reinvest a generous fraction of net benefits--into increasing minimum salaries, as well as research and development, sustainability, etcetera--would be a good approach to solve that problem. Establishing a limit on net benefits past a given amount or percentage over expenses, and forcibly allocating that portion to improving every employee's conditions, every product or service's quality, would only do good, in my opinion.