4 ms·

Imagine if I was visiting Laos and told someone I met in the countryside that I spent, say $2,000 on a racing bicycle -- which would be considered "normal" in b

by xpe 4y ago

Imagine if I was visiting Laos and told someone I met in the countryside that I spent, say $2,000 on a racing bicycle -- which would be considered "normal" in bike racing culture in many parts of the US. Imagine what that person would think! My central point is this: People are quick to "normalize" their behavior relative to their perceived peer group. So, yes, multinational CEO compensation is hard to comprehend. (It is arguably to the point where it does not serve those very corporations well. But that isn't my point...) Just remember, the income and spending habits of a "typical" mid-range software developer in a major U.S. city are similarly incomprehensible for a wide range of people. In some sense, it is turtles all the way down. P.S. I'm not defending CEO pay. First, I haven't really studied it up close. I'd like to see more, erm, experimentation in it. Lowering it, sure. But also I'd like to see it deferred, for example, so a CEO's compensation is also tied to what happens after they leave. That would increase the incentive to not plunder the place or take shortcuts. Yes, I recognize this proposal seems to mix incentives between past and current CEOs. But that reflects reality. You can't just "wash off" a terrible previous CEO. And the "glean" from a wonderful predecessor will pay dividends for a long time. P.P.S. Shameless plug: if you are a well-funded not-for-profit with a generous comp and benefits package, you could do worse than hire me. I'm an expert at studying CEO pay and pay inequity at organizations, both using intra- and inter- methodologies. I'm part of an exclusive self-selected, self-reinforcing group of self-proclaimed experts, so be sure to send your best offer.

refurb 4y ago
Indeed. I see plenty of people on HN complain that no, they are not middle class while making $400,000/yr because they can't afford a 2,000 sq ft house in the most expensive area of the US. Like the old saying "An alcoholic is someone who has one more drink than me."
ethbr0 4y ago
There was a podcast episode on the psychology behind this. Radio Lab? Summary: people only look up, never down. Ask someone who makes $100, and they'll explain they don't have a lot because someone makes $500. Ask someone who makes $100,000, and they'll explain they don't have a lot because someone makes $500,000. Ask someone who makes $100,000,000, and they'll explain they don't have a lot because someone makes $500,000,000.
- xpe 4y ago
  Is this an offer of employment? It doesn't look like an offer of employment. \s
jsjohnst 4y ago
> I'm part of an exclusive self-selected, self-reinforcing group of self-proclaimed experts, so be sure to send your best offer. Not a job offer and no offense intended, but you sound like an excellent crypto startup founder there. Oh wait, they wouldn’t have used the term self and instead used a much more grandiose term. :P
citizenkeen 4y ago
At my company (non-tech), all leadership compensation is paid based on percentages hit over the next five years. Your first year, you’re only getting 20% off the position’s salary, and 80% goes to your predecessors. When you retire, 20% of your salary got the previous four years is based on how well the company does the year after you leave. It strongly incentivizes healthy transitions and long-term plans.
- xpe 4y ago
  The study of reinforcement learning, I've found, is incredibly insightful as a way to really force us to operationalize reward functions. I've benefitted from the process of reasoning and exploring RL reward functions. Sure, I also value game theory, sociology, and psychology as well. People are complex, with culture, identities, imperfect reasoning, and biochemical influences. That said, one key benefit of RL is the hands-on experimental aspect. You get to play God and see what happens. Surprise triggers cognitive dissonance and drives further questions. In contrast, some academic disciplines become rather enamored with their own theories, to the detriment of operationalizing them.
- moneywoes 4y ago
  What type of company is this if you don’t mind sharing?
spullara 4y ago
Imagine everyone is on a ladder. In order to ascend they have to step on the faces of the people below them while simultaneously getting their face stepped on by the people above them. Which one do they care more about?
- xpe 4y ago
  Another way to think about it: Who has various kinds of power? To set pay? To help get one promoted? To help the company succeed? Treating people well tends to have good long-term results. There are exceptions, situations, and cases where you have to be more cautious. To put it nicely, there are some people who favor shorter-term strategies. We all should recognize there is a fraction of people lacking in awareness or empathy or ethics. Some of the folks, wittingly or unwittingly, will bring down the entire ship if you let them. Still, IMO, a wise, ethical person gives the benefit of the doubt and helps others to the extent possible, without overextending themselves. As time passes, a good strategy is to help relatively more people who (a) need the help; (b) reciprocate, to the degree they are able; (c) and let's face it, those who can help you get a foothold. The third point is based on this logic: if you are a conscientious person, it is your ethical responsibility to not be naive. You should carefully strive to use your power to help. Sometimes this means playing the game. What I've said above leaves open all sorts of paradoxes, value judgments, and dilemmas. Such is life. I think it is useful to frame ethics as striving towards an ideal (not just a goal) despite all the complexities. I could use all the feedback you all have to offer... I have a long way to go.
stackbutterflow 4y ago
I don't entirely disagree with your point. However you and that person in Laos both have to work to put a roof over your head and food in your plate. There's an absolute threshold at a few million dollars that guarantees financial independence wherever you are in the world. These rich people are well above that threshold. That's why it is more ridiculous to chase ever more money at their level than it is for you to purchase an expensive bike.

by xpe 4y ago

refurb 4y ago

Indeed. I see plenty of people on HN complain that no, they are not middle class while making $400,000/yr because they can't afford a 2,000 sq ft house in the most expensive area of the US. Like the old saying "An alcoholic is someone who has one more drink than me."

ethbr0 4y ago

There was a podcast episode on the psychology behind this. Radio Lab? Summary: people only look up, never down. Ask someone who makes $100, and they'll explain they don't have a lot because someone makes $500. Ask someone who makes $100,000, and they'll explain they don't have a lot because someone makes $500,000. Ask someone who makes $100,000,000, and they'll explain they don't have a lot because someone makes $500,000,000.

xpe 4y ago
Is this an offer of employment? It doesn't look like an offer of employment. \s

jsjohnst 4y ago

> I'm part of an exclusive self-selected, self-reinforcing group of self-proclaimed experts, so be sure to send your best offer. Not a job offer and no offense intended, but you sound like an excellent crypto startup founder there. Oh wait, they wouldn’t have used the term self and instead used a much more grandiose term. :P

citizenkeen 4y ago

At my company (non-tech), all leadership compensation is paid based on percentages hit over the next five years. Your first year, you’re only getting 20% off the position’s salary, and 80% goes to your predecessors. When you retire, 20% of your salary got the previous four years is based on how well the company does the year after you leave. It strongly incentivizes healthy transitions and long-term plans.

xpe 4y ago
The study of reinforcement learning, I've found, is incredibly insightful as a way to really force us to operationalize reward functions. I've benefitted from the process of reasoning and exploring RL reward functions. Sure, I also value game theory, sociology, and psychology as well. People are complex, with culture, identities, imperfect reasoning, and biochemical influences. That said, one key benefit of RL is the hands-on experimental aspect. You get to play God and see what happens. Surprise triggers cognitive dissonance and drives further questions. In contrast, some academic disciplines become rather enamored with their own theories, to the detriment of operationalizing them.
moneywoes 4y ago
What type of company is this if you don’t mind sharing?

spullara 4y ago

Imagine everyone is on a ladder. In order to ascend they have to step on the faces of the people below them while simultaneously getting their face stepped on by the people above them. Which one do they care more about?

xpe 4y ago
Another way to think about it: Who has various kinds of power? To set pay? To help get one promoted? To help the company succeed? Treating people well tends to have good long-term results. There are exceptions, situations, and cases where you have to be more cautious. To put it nicely, there are some people who favor shorter-term strategies. We all should recognize there is a fraction of people lacking in awareness or empathy or ethics. Some of the folks, wittingly or unwittingly, will bring down the entire ship if you let them. Still, IMO, a wise, ethical person gives the benefit of the doubt and helps others to the extent possible, without overextending themselves. As time passes, a good strategy is to help relatively more people who (a) need the help; (b) reciprocate, to the degree they are able; (c) and let's face it, those who can help you get a foothold. The third point is based on this logic: if you are a conscientious person, it is your ethical responsibility to not be naive. You should carefully strive to use your power to help. Sometimes this means playing the game. What I've said above leaves open all sorts of paradoxes, value judgments, and dilemmas. Such is life. I think it is useful to frame ethics as striving towards an ideal (not just a goal) despite all the complexities. I could use all the feedback you all have to offer... I have a long way to go.

stackbutterflow 4y ago

I don't entirely disagree with your point. However you and that person in Laos both have to work to put a roof over your head and food in your plate. There's an absolute threshold at a few million dollars that guarantees financial independence wherever you are in the world. These rich people are well above that threshold. That's why it is more ridiculous to chase ever more money at their level than it is for you to purchase an expensive bike.