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They could all take massive pay cuts to preserve jobs. They have agency and they have chosen to enrich their stock price at the expense of people’s lives and we

They could all take massive pay cuts to preserve jobs. They have agency and they have chosen to enrich their stock price at the expense of people’s lives and well being.

shiftingleft 4y ago
Microsoft net income 2022: ~$70B. Why force pay cuts or fire workers when you have roughly $300k of net income per employee to work with?
- onlyrealcuzzo 4y ago
  Why make a profit when you can pay your employees >100% of your revenue and just go into debt instead? It's not how business works. You hire people if you need people, and you pay them the least you can get away with, so you maximize profits - because long ago, you raised money with the promise to the people you raised the money from that you would do this, and you have a Fiduciary obligation to do so...
  - coldpie 4y ago
    > you pay them the least you can get away with, so you maximize profits We agree then that employees should put in the least amount of work that they can get away with, right? Fair's fair.
    - ckdarby 4y ago
      That is what a lot of employees do. That is why these layoffs are probably happening, cutting 5% could have been done by freezing hiring and performance evals. They're particular individuals who will take a stance like what you're outlining and sit in a limbo state outside of performance firing them. They bring down team moral, high performing employees feel cheated, etc.
      - coldpie 4y ago
        I think it would be more accurate to say it exposes to the high performers that they are being cheated. Those employees are donating their time & effort to the company so that their bosses can drive fancy cars, fund yacht racing teams, take tourist trips to LEO, buy social media companies to use as toys, and pay off politicians to keep those same employees desperate. The owners want employees fighting amongst themselves for scraps because it keeps them distracted from their real enemy.
  - roflyear 4y ago
    Lots of companies do take no profit and pay out entirely to their employees, and there are some famous examples of that.
    - onlyrealcuzzo 4y ago
      Lots of co-ops and private companies... Please show me one public company that has said - sorry shareholders - we're returning 100%+ of profits to our employees forever.
      - skinnymuch 4y ago
        Who cares if a public company hasn’t done it? We know it’s possible. We need to make the world a better place not have the status quo.
        onlyrealcuzzo 4y ago
        You can't do it with a public company because you have a fiduciary obligation. You can't raise money from Shareholder A with the promise to never return the money. That's a donation. Not gonna be able to raise money like you can from VCs and IPOs.
        skinnymuch 4y ago
        Have people gotten in trouble for breaking the fiduciary obligation by being nicer to workers? Has any one been in a serious chance for getting in trouble for being nicer to workers? I have always assumed this stuff is basically made up. It might be written somewhere, but no one is enforcing it. It appears to be greed and keeping the status quo.
        onlyrealcuzzo 4y ago
        > Have people gotten in trouble for breaking the fiduciary obligation by being nicer to workers? Has any one been in a serious chance for getting in trouble for being nicer to workers? Being nice to workers, and never returning money to shareholders because you're overpaying your workers are two entirely different things. FAANG has treated their workers quite well for a 10+ years, and shareholders have not cared, because profits and growth have been enormous. They could've treated their workers much better and paid them 2-3x as much money, though. But they didn't. Because they would've gotten sued by shareholders.
  - skinnymuch 4y ago
    Long ago capitalism and then neoliberalism infected our brains. There’s no rational reason why any of these promises were made in the first place while still having people without health care or a home.
- w0m 4y ago
  The argument would be sustainability I believe.
  - skinnymuch 4y ago
    Microsoft will survive even if they never fire another person for years.
    - coldpie 4y ago
      Microsoft spending $70B in cash this year is proof of that, in case anyone reading doubts the above statement. https://en.wikipedia.org/wiki/Proposed_acquisition_of_Activision_Blizzard_by_Microsoft https://en.wikipedia.org/wiki/Proposed_acquisition_of_Activi...
onlyrealcuzzo 4y ago
Contrary to popular belief, at a company the size of MSFT - the execs could drop all their wages to $0 - and it would not be able to save 5% of the workforce from getting fired. The execs get paid a lot - but there's not that many of them, and there's 200k people at MSFT making an average salary (with benefits) >$200k. That's >$40B per year. The execs don't take home >$2B per year. Satya made <$60M last year. There's not 35 execs at MSFT making the same amount of money or higher. There's 18 others, and they make a lot less money on average.
- culi 4y ago
  If all 10k of these workers get paid an average of $150k, Satya's salary alone would cover 4% of them. I find it hard to believe you couldn't save 5% Do you have any actual numbers on the number of execs vs workers and their salaries?
  - mrandish 4y ago
    I just saw a headline yesterday based on a new study which said the average U.S. CEO's compensation is 399 times the average employee. So there's your number. A CEO taking zero would cover less than 400 employees. Also, keep in mind the vast majority of Satya's compensation is in long-term vesting stock options which can become worthless if the stock is lower in four years than it is this year. Also, due to how capital gains taxes work, Satya is going to hold his vested options for at least another year after they vest. Plus, every sale of the company's stock by a key executive is immediately reported to the SEC and publicly available on the SEC and company's websites. Wall street watches this like a hawk. If any key exec unloads more than a few percent of their entire holdings at any one time, it will hurt the stock price pretty substantially. Effectively, it makes it so the CEO can't sell a lot their stock at once while they are CEO. The big numbers you see for CEO compensation for this year are largely stock options that were granted years prior which vested this year. Almost all of Satya's compensation is performance-based instead of guaranteed. The company he leads must deliver sustained profitable growth over the long-term for his comp to be worth a lot. The fact it's worth a lot this year is almost entirely due to him already delivering on his commitments to shareholders in the past. Keep in mind that the average public company CEO is in the CEO job less than five years. Satya is in the minority that is succeeding. Due to the high visibility of the CEO role, the majority who don't succeed have a high likelihood of never earning significant compensation again.

They could all take massive pay cuts to preserve jobs. They have agency and they have chosen to enrich their stock price at the expense of people’s lives and well being.

shiftingleft 4y ago

Microsoft net income 2022: ~$70B. Why force pay cuts or fire workers when you have roughly $300k of net income per employee to work with?

onlyrealcuzzo 4y ago
Why make a profit when you can pay your employees >100% of your revenue and just go into debt instead? It's not how business works. You hire people if you need people, and you pay them the least you can get away with, so you maximize profits - because long ago, you raised money with the promise to the people you raised the money from that you would do this, and you have a Fiduciary obligation to do so...
- coldpie 4y ago
  > you pay them the least you can get away with, so you maximize profits We agree then that employees should put in the least amount of work that they can get away with, right? Fair's fair.
  - ckdarby 4y ago
    That is what a lot of employees do. That is why these layoffs are probably happening, cutting 5% could have been done by freezing hiring and performance evals. They're particular individuals who will take a stance like what you're outlining and sit in a limbo state outside of performance firing them. They bring down team moral, high performing employees feel cheated, etc.
    - coldpie 4y ago
      I think it would be more accurate to say it exposes to the high performers that they are being cheated. Those employees are donating their time & effort to the company so that their bosses can drive fancy cars, fund yacht racing teams, take tourist trips to LEO, buy social media companies to use as toys, and pay off politicians to keep those same employees desperate. The owners want employees fighting amongst themselves for scraps because it keeps them distracted from their real enemy.
- roflyear 4y ago
  Lots of companies do take no profit and pay out entirely to their employees, and there are some famous examples of that.
  - onlyrealcuzzo 4y ago
    Lots of co-ops and private companies... Please show me one public company that has said - sorry shareholders - we're returning 100%+ of profits to our employees forever.
    - skinnymuch 4y ago
      Who cares if a public company hasn’t done it? We know it’s possible. We need to make the world a better place not have the status quo.
      - onlyrealcuzzo 4y ago
        You can't do it with a public company because you have a fiduciary obligation. You can't raise money from Shareholder A with the promise to never return the money. That's a donation. Not gonna be able to raise money like you can from VCs and IPOs.
        skinnymuch 4y ago
        Have people gotten in trouble for breaking the fiduciary obligation by being nicer to workers? Has any one been in a serious chance for getting in trouble for being nicer to workers? I have always assumed this stuff is basically made up. It might be written somewhere, but no one is enforcing it. It appears to be greed and keeping the status quo.
        onlyrealcuzzo 4y ago
        > Have people gotten in trouble for breaking the fiduciary obligation by being nicer to workers? Has any one been in a serious chance for getting in trouble for being nicer to workers? Being nice to workers, and never returning money to shareholders because you're overpaying your workers are two entirely different things. FAANG has treated their workers quite well for a 10+ years, and shareholders have not cared, because profits and growth have been enormous. They could've treated their workers much better and paid them 2-3x as much money, though. But they didn't. Because they would've gotten sued by shareholders.
- skinnymuch 4y ago
  Long ago capitalism and then neoliberalism infected our brains. There’s no rational reason why any of these promises were made in the first place while still having people without health care or a home.
w0m 4y ago
The argument would be sustainability I believe.
- skinnymuch 4y ago
  Microsoft will survive even if they never fire another person for years.
  - coldpie 4y ago
    Microsoft spending $70B in cash this year is proof of that, in case anyone reading doubts the above statement. https://en.wikipedia.org/wiki/Proposed_acquisition_of_Activision_Blizzard_by_Microsoft https://en.wikipedia.org/wiki/Proposed_acquisition_of_Activi...

onlyrealcuzzo 4y ago

Contrary to popular belief, at a company the size of MSFT - the execs could drop all their wages to $0 - and it would not be able to save 5% of the workforce from getting fired. The execs get paid a lot - but there's not that many of them, and there's 200k people at MSFT making an average salary (with benefits) >$200k. That's >$40B per year. The execs don't take home >$2B per year. Satya made <$60M last year. There's not 35 execs at MSFT making the same amount of money or higher. There's 18 others, and they make a lot less money on average.

culi 4y ago
If all 10k of these workers get paid an average of $150k, Satya's salary alone would cover 4% of them. I find it hard to believe you couldn't save 5% Do you have any actual numbers on the number of execs vs workers and their salaries?
- mrandish 4y ago
  I just saw a headline yesterday based on a new study which said the average U.S. CEO's compensation is 399 times the average employee. So there's your number. A CEO taking zero would cover less than 400 employees. Also, keep in mind the vast majority of Satya's compensation is in long-term vesting stock options which can become worthless if the stock is lower in four years than it is this year. Also, due to how capital gains taxes work, Satya is going to hold his vested options for at least another year after they vest. Plus, every sale of the company's stock by a key executive is immediately reported to the SEC and publicly available on the SEC and company's websites. Wall street watches this like a hawk. If any key exec unloads more than a few percent of their entire holdings at any one time, it will hurt the stock price pretty substantially. Effectively, it makes it so the CEO can't sell a lot their stock at once while they are CEO. The big numbers you see for CEO compensation for this year are largely stock options that were granted years prior which vested this year. Almost all of Satya's compensation is performance-based instead of guaranteed. The company he leads must deliver sustained profitable growth over the long-term for his comp to be worth a lot. The fact it's worth a lot this year is almost entirely due to him already delivering on his commitments to shareholders in the past. Keep in mind that the average public company CEO is in the CEO job less than five years. Satya is in the minority that is succeeding. Due to the high visibility of the CEO role, the majority who don't succeed have a high likelihood of never earning significant compensation again.