5 ms·

When executive pay is based on stock value which depends on keeping costs down, what relief can there be for employees and subcontractors?

atoav 4y ago
Laws.
- mhoad 4y ago
  And improved negation power by continuing to unionize.
deleted 4y ago
[deleted]
sokoloff 4y ago
Stock value depends on growth rate and overall profitability much more than on simply "keeping costs down". Shareholders invest in Amazon for growth and (now) for profit. Compensating the CEO based on how effectively they deliver that seems like a pretty dang obvious strategy for shareholders to support.
GreenPlastic 4y ago
The purpose of a company isn't to employ people. It's to take raw inputs, including employee labor, and turn that into outputs that people want. Employee relief comes in the form of voting with their feet or if they're critical inputs into what the black box produces
- AlexandrB 4y ago
  This is why whenever a company claims to be "creating jobs" they're talking about a byproduct they're often trying to reduce/stop not a goal of their business. IMHO "job creation" rhetoric can be dismissed out of hand when discussing taxation and regulation.
  - triceratops 4y ago
    Pretty much this. "We created jobs" is just code for "We were forced to spend some money to make even more money".
- falcolas 4y ago
  Amusing. The purpose of a company was originally exactly that: to employ people and provide services and value to the community they existed in. I mean, this is still the exact reason politicians cite when providing incentives to companies - bringing jobs to their cities/states. I'm pretty sure I don't like this new definition; it feels like it's based on greed, not value.
  - jimbokun 4y ago
    When was this time?
  - yowlingcat 4y ago
    That's not historically accurate. Historically, the purpose of a company was to be a vehicle that a passive partner could invest capital into an enterprise providing a return on investment, such that an active partner (who did not) could manage it [1]. I do not see historical support for your claim that the purpose of a company was "to employ people and provide services and value to the community they existed in" even if that would be an ideal social outcome (and one which I'd personally prefer to see everywhere). [1] https://news.law.fordham.edu/jcfl/2018/11/18/a-brief-history-of-the-corporate-form-and-why-it-matters/ https://news.law.fordham.edu/jcfl/2018/11/18/a-brief-history...
    - bigfudge 4y ago
      The reason companies are given legal standing and privilege is because they serve a useful social function, in addition to being a legal nicety for investment. If companies don’t serve useful social purposes we can change the law to withdraw those privileges.
      - yowlingcat 4y ago
        That's incorrect. They are given legal standing and privilege because they serve a useful /economic/ function (tax base). The social function is downstream from this, and it's also what creates friction to actually /change the law/ to withdraw those privileges -- you do it at the risk of hemorrhaging that tax base which funds the governing apparatus.
- bo1024 4y ago
  Says who? I think the idea of "purpose" of a company is very nebulous and interacts opaquely with: the "incentives" of a company, the societal purpose for having companies, the mission statement of a particular company, etc. I would say the purpose of a company is mostly to make money for the owners of the company, which is not the exact same as what you said.
- johannes1234321 4y ago
  The question is: Is that the way it has to be? Can't we build a society which is better? Can't we build a society where "sane" employment is a valid and wanted output and not only maximising shareholder value?
  - kelseyfrog 4y ago
    Theoretically or in practice? Practically, we haven't yet developed anti-fragile socio-ideological technologies which can out compete shareholder-maximization ideologies(SMIs). Instead SMIs are adept at castrating anti-SMIs and rendering them inert before they can establish a foothold. The world we enter into today is the product of this anti-SMI castration. You can even see echos of the great SMI war play out whenever SMI granades are casually lobbed in the bushwar of this discussion.
    - bigfudge 4y ago
      Not in the US, but Germany and Scandinavian countries show this very much is a possibility. Medium sized firms in Germany just don’t behave the same way they do in the US and large enterprises are subject to far more state intervention. And it still works fine.
      - kelseyfrog 4y ago
        Yes. My comment was very US-centric. You're right; the outcomes are demonstrably true. Board-level representation is a good example of this. Maybe asking rhetorically in a different way - what is the series of chess moves where that goal is achieved?
- triceratops 4y ago
  It's to take raw inputs and turn it into money. No one really wants telemarketing calls, or patent lawsuits but companies "produce" those things regardless to make money.
diob 4y ago
This is why we need more employee ownership of companies.
- hegemon8 4y ago
  committees cannot run conglomerates.
  - corrral 4y ago
    Boards of Directors exist. I bet a lot of companies already have more non-employee shareholders than they have employees. It doesn't seem to be a problem.

atoav 4y ago

Laws.

mhoad 4y ago
And improved negation power by continuing to unionize.

deleted 4y ago

[deleted]

sokoloff 4y ago

Stock value depends on growth rate and overall profitability much more than on simply "keeping costs down". Shareholders invest in Amazon for growth and (now) for profit. Compensating the CEO based on how effectively they deliver that seems like a pretty dang obvious strategy for shareholders to support.

GreenPlastic 4y ago

The purpose of a company isn't to employ people. It's to take raw inputs, including employee labor, and turn that into outputs that people want. Employee relief comes in the form of voting with their feet or if they're critical inputs into what the black box produces

AlexandrB 4y ago
This is why whenever a company claims to be "creating jobs" they're talking about a byproduct they're often trying to reduce/stop not a goal of their business. IMHO "job creation" rhetoric can be dismissed out of hand when discussing taxation and regulation.
- triceratops 4y ago
  Pretty much this. "We created jobs" is just code for "We were forced to spend some money to make even more money".
falcolas 4y ago
Amusing. The purpose of a company was originally exactly that: to employ people and provide services and value to the community they existed in. I mean, this is still the exact reason politicians cite when providing incentives to companies - bringing jobs to their cities/states. I'm pretty sure I don't like this new definition; it feels like it's based on greed, not value.
- jimbokun 4y ago
  When was this time?
- yowlingcat 4y ago
  That's not historically accurate. Historically, the purpose of a company was to be a vehicle that a passive partner could invest capital into an enterprise providing a return on investment, such that an active partner (who did not) could manage it [1]. I do not see historical support for your claim that the purpose of a company was "to employ people and provide services and value to the community they existed in" even if that would be an ideal social outcome (and one which I'd personally prefer to see everywhere). [1] https://news.law.fordham.edu/jcfl/2018/11/18/a-brief-history-of-the-corporate-form-and-why-it-matters/ https://news.law.fordham.edu/jcfl/2018/11/18/a-brief-history...
  - bigfudge 4y ago
    The reason companies are given legal standing and privilege is because they serve a useful social function, in addition to being a legal nicety for investment. If companies don’t serve useful social purposes we can change the law to withdraw those privileges.
    - yowlingcat 4y ago
      That's incorrect. They are given legal standing and privilege because they serve a useful /economic/ function (tax base). The social function is downstream from this, and it's also what creates friction to actually /change the law/ to withdraw those privileges -- you do it at the risk of hemorrhaging that tax base which funds the governing apparatus.
bo1024 4y ago
Says who? I think the idea of "purpose" of a company is very nebulous and interacts opaquely with: the "incentives" of a company, the societal purpose for having companies, the mission statement of a particular company, etc. I would say the purpose of a company is mostly to make money for the owners of the company, which is not the exact same as what you said.
johannes1234321 4y ago
The question is: Is that the way it has to be? Can't we build a society which is better? Can't we build a society where "sane" employment is a valid and wanted output and not only maximising shareholder value?
- kelseyfrog 4y ago
  Theoretically or in practice? Practically, we haven't yet developed anti-fragile socio-ideological technologies which can out compete shareholder-maximization ideologies(SMIs). Instead SMIs are adept at castrating anti-SMIs and rendering them inert before they can establish a foothold. The world we enter into today is the product of this anti-SMI castration. You can even see echos of the great SMI war play out whenever SMI granades are casually lobbed in the bushwar of this discussion.
  - bigfudge 4y ago
    Not in the US, but Germany and Scandinavian countries show this very much is a possibility. Medium sized firms in Germany just don’t behave the same way they do in the US and large enterprises are subject to far more state intervention. And it still works fine.
    - kelseyfrog 4y ago
      Yes. My comment was very US-centric. You're right; the outcomes are demonstrably true. Board-level representation is a good example of this. Maybe asking rhetorically in a different way - what is the series of chess moves where that goal is achieved?
triceratops 4y ago
It's to take raw inputs and turn it into money. No one really wants telemarketing calls, or patent lawsuits but companies "produce" those things regardless to make money.

diob 4y ago

This is why we need more employee ownership of companies.

hegemon8 4y ago
committees cannot run conglomerates.
- corrral 4y ago
  Boards of Directors exist. I bet a lot of companies already have more non-employee shareholders than they have employees. It doesn't seem to be a problem.