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The guardian article and the commenter I replied to are pointing out the difference between 1965 and 2020 as if it's a problem. A problem is defined as somethi

The guardian article and the commenter I replied to are pointing out the difference between 1965 and 2020 as if it's a problem. A problem is defined as something that has a negative impact on people. My analysis points out that the only people that modern CEO pay has a negative impact on is the shareholders. I illustrated that it makes literally no difference to your average floor worker whether the CEO gets $0 or $20 million in stock comp.

lanstin 6y ago
If that worker has a pension or 401k, then it does matter. The fleecing isn't directly from him, but aggregate it by "managerial class" and "middle class" and you see the high $ managerial cash flows are directly at the expense of the middle class and retirement of the middle class. Thru in some tax policy, and you can see it is also taking money away from education of young middle class folks, and investment in communal things like roads and public health and so on.
- missedthecue 6y ago
  Yes, it hurts shareholders. That's what I wrote in my first comment. You agree with me then?
  - lanstin 6y ago
    I agree it's a diversion of wealth from the workers to the management class.
CPLX 6y ago
This argument is fucking ludicrous. Money is money. If the business used to have it and now the CEO has it then the business gave it to him. There's no class of equity that wasn't originally created and owned by the business so that's where the money comes from. And lest there be any confusion, all the companies we're talking about do massive stock buy backs so it's not even hypothetical, they spend billions of dollars to prop up the price of stocks and the executives get it.
- missedthecue 6y ago
  It is not "fucking ludicrous". Both stock comp and cash comp are the same from the shareholders view. They are not the same from the employees view. A higher cash comp for CEOs may well result in lower employee pay, a higher stock comp will not.
  - CPLX 6y ago
    > A higher cash comp for CEOs may well result in lower employee pay, a higher stock comp will not. Why? The whole point of publicly traded stock is that it's, like traded, in public. That means it's freely exchanged for cash in a matter of seconds. If the company can use it to compensate one person it can use it to compensate another person. What's your theory here, is it that the company has a resource that can generate compensation without any consequence to the company's finances, but it's only possible to give that compensation to certain people?
PhilipTai 6y ago
No. There is really no difference whether CEO is paid in cash or in stock, regarding the negative impact of the pay. Scenario 1: CEO get paid $50 million in stock. Scenario 2: CEO get paid $50 million in cash. And then the company raise $50 million from stock market, so that it will have the same amount of cash as scenario 1. They are the same.
- missedthecue 6y ago
  Or they may not be able to raise cash, or they may be a private company without access to the stock market, or they may have bylaws preventing such a thing. Either way, the employee is not made worse off because the CEO collects a fat stack of options at the expense of the shareholder.
  - CRConrad 6y ago
    > Either way, the employee is not made worse off because the CEO collects a fat stack of options at the expense of the shareholder. Of course the employees are made worse off by that: If the shareholders didn't give all that money to the CEO, they could give it to the other employees in stead and be no worse off themselves. The CEO uses up all the available potential for employee compensation at the expense of everyone else. Your thesis is just astonishingly weird.

lanstin 6y ago

If that worker has a pension or 401k, then it does matter. The fleecing isn't directly from him, but aggregate it by "managerial class" and "middle class" and you see the high $ managerial cash flows are directly at the expense of the middle class and retirement of the middle class. Thru in some tax policy, and you can see it is also taking money away from education of young middle class folks, and investment in communal things like roads and public health and so on.

missedthecue 6y ago
Yes, it hurts shareholders. That's what I wrote in my first comment. You agree with me then?
- lanstin 6y ago
  I agree it's a diversion of wealth from the workers to the management class.

CPLX 6y ago

This argument is fucking ludicrous. Money is money. If the business used to have it and now the CEO has it then the business gave it to him. There's no class of equity that wasn't originally created and owned by the business so that's where the money comes from. And lest there be any confusion, all the companies we're talking about do massive stock buy backs so it's not even hypothetical, they spend billions of dollars to prop up the price of stocks and the executives get it.

missedthecue 6y ago
It is not "fucking ludicrous". Both stock comp and cash comp are the same from the shareholders view. They are not the same from the employees view. A higher cash comp for CEOs may well result in lower employee pay, a higher stock comp will not.
- CPLX 6y ago
  > A higher cash comp for CEOs may well result in lower employee pay, a higher stock comp will not. Why? The whole point of publicly traded stock is that it's, like traded, in public. That means it's freely exchanged for cash in a matter of seconds. If the company can use it to compensate one person it can use it to compensate another person. What's your theory here, is it that the company has a resource that can generate compensation without any consequence to the company's finances, but it's only possible to give that compensation to certain people?

PhilipTai 6y ago

No. There is really no difference whether CEO is paid in cash or in stock, regarding the negative impact of the pay. Scenario 1: CEO get paid $50 million in stock. Scenario 2: CEO get paid $50 million in cash. And then the company raise $50 million from stock market, so that it will have the same amount of cash as scenario 1. They are the same.

missedthecue 6y ago
Or they may not be able to raise cash, or they may be a private company without access to the stock market, or they may have bylaws preventing such a thing. Either way, the employee is not made worse off because the CEO collects a fat stack of options at the expense of the shareholder.
- CRConrad 6y ago
  > Either way, the employee is not made worse off because the CEO collects a fat stack of options at the expense of the shareholder. Of course the employees are made worse off by that: If the shareholders didn't give all that money to the CEO, they could give it to the other employees in stead and be no worse off themselves. The CEO uses up all the available potential for employee compensation at the expense of everyone else. Your thesis is just astonishingly weird.