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Google, Meta, Microsoft, Amazon CEOs: “Yeah, we are doing layoffs, that’s totally my fault and I take the whole blame.” - they cut 10-15% of workforce, no reper

Google, Meta, Microsoft, Amazon CEOs: “Yeah, we are doing layoffs, that’s totally my fault and I take the whole blame.” - they cut 10-15% of workforce, no repercussions for them Apple CEO: “no layoffs here, but maybe cut my salary by 40%” And yes, I know $50 million is couch change for Tim Apple

CoolGuySteve 4y ago
Yeah, how about if you lay off more than 1% of a publicly traded company, top level executive compensation must be 0 for the year. Right now there's a misaligned incentive to perform layoffs in order to appease investors (including those in the boardroom) and pump the stock price even if the company is doing well.
- 1123581321 4y ago
  That would be trivially gamed by either requiring more compensation up front or the CEO simply behaving against the interests of the company during hard times.
  - CoolGuySteve 4y ago
    CEOs currently get paid either way, either by golden parachutes and retention bonuses when the company fails or by big paydays when the company grows. It's in the best interest of the shareholders that the CEO of a failing company either have faith that it will turn around or negotiate an acquisition. I don't believe this is the case with current executive compensation structures. And at least this penalty would be an incentive towards shrinking the company via attrition instead of disrupting the lives of thousands of employees and shocking the labour market.
    - 1123581321 4y ago
      I understand your sentiment and I agree that a slow trickle of attrition, if executed well and not coupled with an overly conservative hiring rate, would be one of the better side effects of your proposal.
  - Retric 4y ago
    CEO’s don’t have infinite leverage to negotiate compensation.
- rebel 4y ago
  Why would the executive (or anyone) continue to do the job?
  - dumbfounder 4y ago
    Think of it as an investment not a job. Plenty of people do startups and take zero salary early for the upside later on.
    - qwytw 4y ago
      So would those executives be stripped of their stock that they acquired earlier if they decided to leave. Or how would it work?
  - deleted 4y ago
    [deleted]
  - simplotek 4y ago
    I don't understand the question. Do you mean all executives are irreplaceable?
- scarface74 4y ago
  So in that case they would just reduce hiring.
  - Volundr 4y ago
    Which would be a good thing compared to mass layoffs, no?
    - scarface74 4y ago
      No. It’s better to have loved and to have lost than to never have loved at all. I would much rather have been hired at AWS in mid 2020 (which I was), make over six figures more over the next two years than I would have anywhere locally (I work remotely) and gotten laid off (I haven’t) than not be hired at all.
      - Volundr 4y ago
        What makes you assume you wouldn't have simply found another well paying position, and still had it, since in this scenario companies are now thinking about hiring sustainably? I too work remotely making more than I would locally, and I left my previous company for a new place only to be laid off six months later. I would far rather not been hired into the new company and still be where I was at than suddenly job hunting (I have plenty of runway, I should be fine).
        scarface74 4y ago
        > What makes you assume you wouldn't have simply found another well paying position, and still had it, since in this scenario companies are now thinking about hiring sustainably? Well, in my specific case do you know of any other major tech company that would have hired me to consult other enterprise companies on how to develop on top of AWS? > and I left my previous company for a new place only to be laid off six months later. I would far rather not been hired into the new company and still be where I was at than suddenly job hunting (I have plenty of runway, I should be fine). I changed jobs 6 times between 2012-2020. I stay prepared to interview.
- wikfwikf 4y ago
  If investors see layoffs and judge that the company just became more valuable, either they are right or they are wrong. If they are right, then isn't the job of management, in a principle fundamental to the US economic system, to follow their wishes? Management doesn't have to do whatever investors ask for, but there is no real justification for them to do something which is both against their wishes and against the interests of the company. If they are wrong, then surely the problem is that most US companies are having their decision-making driven by a group of people who are paramount but who are making misguided or misinformed decisions. Any tweaking of the exact incentives which doesn't solve this problem is both a distraction and subject to the law of unintended consequences. Note that I am not strongly in favor of either sweeping layoffs or of the specific US variant of capitalism in general. I just think that one should be honest about to what extent problems are unavoidable to the extent that one cleaves to a given system.
- flandish 4y ago
  I’ve been noodling around this thought that businesses that provide “necessary for life and health” services (power, food, housing, healthcare, and tech) should not be allowed to make more than X profit year over year, provide bonus to C level and up, or give dividends/buybacks if, within a rolling 3 year period they have laid off anyone for a “financial” reason, or not increased employee wages tracked with inflation. Those that ignore that rule become heavily fined.
- lost_tourist 4y ago
  That's not the way companies and capitalism works, nor a company. Most of these firings are because they were booming during the pandemic. The role of a publically traded company isn't to provide jobs, it's to provide return on investment, and however the people who run a company see that should be carried out. I wish they could see beyond a quarter of two and see the value of building employee loyalty, but that seems to be a thing of the past.
- nxmnxm99 4y ago
  …what? All the executives would leave. What are you talking about
- fancyfredbot 4y ago
  Cut the dividend, not exec compensation.
  - simplotek 4y ago
    > Cut the dividend, not exec compensation. Also, stock value definitely needs to be in the equation. It makes no sense to fire people if the company's valuation is increasing and thus stockholders are getting richer.
curiousllama 4y ago
Doesn't Zuckerburg not take a salary?
- deleted 4y ago
  [deleted]
- Alupis 4y ago
  Salaries for most of these Tech CEO's are irrelevant. This gesture from Cook is all about the PR and will have nearly zero (or zero) impact on his daily life and compensation from running Apple. It looks really good though, and makes for a great headline. For these folks, it's all about the stock. By making this salary cut into a PR event, Cook's long term compensation is likely to skyrocket as shareholders reward the company's direction.
  - cma 4y ago
    The article says this is a total comp cut, not just a salary cut. Salary before stock incentives for 2022 was only $3 million or so. I'm not sure what it had gone up to for 2023, but if it is a similar ratio of salary to other incentives, almost all of this 40% cut would be through stock incentive cuts wouldn't it?
    - Alupis 4y ago
      What you say is true. The comment I was responding to mentioned other tech ceo's with a token or no salary. Regardless, Cook already owns a massive amount of stock. The PR event, and the eventual rise in Apple's price will reward Cook massively over the long term. It also paves the way for a dramatic increase in total compensation when the economy gets back to normal and Apple share price rises with the tide naturally.
      - cma 4y ago
        The PR will fade, obviously his reduction isn't going to impact the stock enough to make up for it to him when multiplied by his minor fraction of the total (Cook owns around 0.02% of Apple). It will make up for it multiplied across all non-Cook Apple shares, but isn't that the point?
jayd16 4y ago
I guess I really don't get the sentiment here. Layoffs are inherently bad and not just reflective of the market changing focus from growth to profits? Why is it clear that layoffs should have repercussions? What does it mean when almost every big company's management made the same mistake? I'm all for worker protections and good severance and unemployment benefits and its not great to be laid off but these takes just don't resonate with me.
- baryphonic 4y ago
  Because most mgmt seems to have no skin in the game. When they make bad decisions, the underlings often pay for it. This is especially true when they write corpo-speak blog posts "taking responsibility," which includes laying off 10% of the workforce. A CEO cutting his own pay seems like a much better first step. It signals accountability.
  - amf12 4y ago
    > Because most mgmt seems to have no skin in the game This is not true. Most executives' compensation is tied to equity. For example, Tim Cook's base pay + bonus is 9M, but he has 40M in equity comp (performance + time based). > A CEO cutting his own pay seems like a much better first step. It signals accountability. This, I agree with.
    - simplotek 4y ago
      > This is not true. Most executives' compensation is tied to equity. For example, Tim Cook's base pay + bonus is 9M, but he has 40M in equity comp (performance + time based). Tim Cook is still getting paid millions. His pay cut was voluntary. Workers getting fired are getting zero salary and are not leaving because they want to. I'm sure Tim Cook isn't stressing about how to make rent or pay the mortgage, unlike people getting laid off.
    - baryphonic 4y ago
      You make a fair point I seem to remember when studying economics that someone analyzed management behavior and found senior executives were typically decent at their jobs and more or less had incentives to make decent decisions. Middle management was completely risk averse, had no skin in the game and made decisions only insofar as they wouldn't be fired. I wish I could find a link, but I read it years ago, though this more informal discussion cites similar work (they use family-owned businesses as a proxy for middle managers who do have skin in the game)[0] I do think that a CEO showing accountability sets a standard for the rest of mgmt and the organization, which is perhaps more accurate; though I'd hope that organizations find ways to hold middle management accountable for failures [0] https://www.wealthmanagement.com/equities/why-management-needs-have-skin-game https://www.wealthmanagement.com/equities/why-management-nee...
onlyrealcuzzo 4y ago
$50M pays for like 100 employees at Apple. It's not saving the company from doing 10% layoffs. Not even 0.1%...
- akmarinov 4y ago
  That's the thing - the company's not even doing layoffs
cableshaft 4y ago
I know whose stock I'll be buying for the forseeable future (Apple). I have both Google and Apple stock, but I'll stop buying Google for now. For most of these big wig shareholders it's probably the other way around, though.
anotherevan 4y ago
This article[1] may give a better explanation. Since Sep 2019, Apple's workforce increased by 20%. Microsoft was next closest with 53%, and both Meta and Amazon pretty much doubled. [1] https://www.wsj.com/articles/how-apple-has-so-far-avoided-layoffs-lean-hiring-no-free-lunches-11674274185 https://www.wsj.com/articles/how-apple-has-so-far-avoided-la...

CoolGuySteve 4y ago

Yeah, how about if you lay off more than 1% of a publicly traded company, top level executive compensation must be 0 for the year. Right now there's a misaligned incentive to perform layoffs in order to appease investors (including those in the boardroom) and pump the stock price even if the company is doing well.

1123581321 4y ago
That would be trivially gamed by either requiring more compensation up front or the CEO simply behaving against the interests of the company during hard times.
- CoolGuySteve 4y ago
  CEOs currently get paid either way, either by golden parachutes and retention bonuses when the company fails or by big paydays when the company grows. It's in the best interest of the shareholders that the CEO of a failing company either have faith that it will turn around or negotiate an acquisition. I don't believe this is the case with current executive compensation structures. And at least this penalty would be an incentive towards shrinking the company via attrition instead of disrupting the lives of thousands of employees and shocking the labour market.
  - 1123581321 4y ago
    I understand your sentiment and I agree that a slow trickle of attrition, if executed well and not coupled with an overly conservative hiring rate, would be one of the better side effects of your proposal.
- Retric 4y ago
  CEO’s don’t have infinite leverage to negotiate compensation.
rebel 4y ago
Why would the executive (or anyone) continue to do the job?
- dumbfounder 4y ago
  Think of it as an investment not a job. Plenty of people do startups and take zero salary early for the upside later on.
  - qwytw 4y ago
    So would those executives be stripped of their stock that they acquired earlier if they decided to leave. Or how would it work?
- deleted 4y ago
  [deleted]
- simplotek 4y ago
  I don't understand the question. Do you mean all executives are irreplaceable?
scarface74 4y ago
So in that case they would just reduce hiring.
- Volundr 4y ago
  Which would be a good thing compared to mass layoffs, no?
  - scarface74 4y ago
    No. It’s better to have loved and to have lost than to never have loved at all. I would much rather have been hired at AWS in mid 2020 (which I was), make over six figures more over the next two years than I would have anywhere locally (I work remotely) and gotten laid off (I haven’t) than not be hired at all.
    - Volundr 4y ago
      What makes you assume you wouldn't have simply found another well paying position, and still had it, since in this scenario companies are now thinking about hiring sustainably? I too work remotely making more than I would locally, and I left my previous company for a new place only to be laid off six months later. I would far rather not been hired into the new company and still be where I was at than suddenly job hunting (I have plenty of runway, I should be fine).
      - scarface74 4y ago
        > What makes you assume you wouldn't have simply found another well paying position, and still had it, since in this scenario companies are now thinking about hiring sustainably? Well, in my specific case do you know of any other major tech company that would have hired me to consult other enterprise companies on how to develop on top of AWS? > and I left my previous company for a new place only to be laid off six months later. I would far rather not been hired into the new company and still be where I was at than suddenly job hunting (I have plenty of runway, I should be fine). I changed jobs 6 times between 2012-2020. I stay prepared to interview.
wikfwikf 4y ago
If investors see layoffs and judge that the company just became more valuable, either they are right or they are wrong. If they are right, then isn't the job of management, in a principle fundamental to the US economic system, to follow their wishes? Management doesn't have to do whatever investors ask for, but there is no real justification for them to do something which is both against their wishes and against the interests of the company. If they are wrong, then surely the problem is that most US companies are having their decision-making driven by a group of people who are paramount but who are making misguided or misinformed decisions. Any tweaking of the exact incentives which doesn't solve this problem is both a distraction and subject to the law of unintended consequences. Note that I am not strongly in favor of either sweeping layoffs or of the specific US variant of capitalism in general. I just think that one should be honest about to what extent problems are unavoidable to the extent that one cleaves to a given system.
flandish 4y ago
I’ve been noodling around this thought that businesses that provide “necessary for life and health” services (power, food, housing, healthcare, and tech) should not be allowed to make more than X profit year over year, provide bonus to C level and up, or give dividends/buybacks if, within a rolling 3 year period they have laid off anyone for a “financial” reason, or not increased employee wages tracked with inflation. Those that ignore that rule become heavily fined.
lost_tourist 4y ago
That's not the way companies and capitalism works, nor a company. Most of these firings are because they were booming during the pandemic. The role of a publically traded company isn't to provide jobs, it's to provide return on investment, and however the people who run a company see that should be carried out. I wish they could see beyond a quarter of two and see the value of building employee loyalty, but that seems to be a thing of the past.
nxmnxm99 4y ago
…what? All the executives would leave. What are you talking about
fancyfredbot 4y ago
Cut the dividend, not exec compensation.
- simplotek 4y ago
  > Cut the dividend, not exec compensation. Also, stock value definitely needs to be in the equation. It makes no sense to fire people if the company's valuation is increasing and thus stockholders are getting richer.

curiousllama 4y ago

Doesn't Zuckerburg not take a salary?

deleted 4y ago
[deleted]
Alupis 4y ago
Salaries for most of these Tech CEO's are irrelevant. This gesture from Cook is all about the PR and will have nearly zero (or zero) impact on his daily life and compensation from running Apple. It looks really good though, and makes for a great headline. For these folks, it's all about the stock. By making this salary cut into a PR event, Cook's long term compensation is likely to skyrocket as shareholders reward the company's direction.
- cma 4y ago
  The article says this is a total comp cut, not just a salary cut. Salary before stock incentives for 2022 was only $3 million or so. I'm not sure what it had gone up to for 2023, but if it is a similar ratio of salary to other incentives, almost all of this 40% cut would be through stock incentive cuts wouldn't it?
  - Alupis 4y ago
    What you say is true. The comment I was responding to mentioned other tech ceo's with a token or no salary. Regardless, Cook already owns a massive amount of stock. The PR event, and the eventual rise in Apple's price will reward Cook massively over the long term. It also paves the way for a dramatic increase in total compensation when the economy gets back to normal and Apple share price rises with the tide naturally.
    - cma 4y ago
      The PR will fade, obviously his reduction isn't going to impact the stock enough to make up for it to him when multiplied by his minor fraction of the total (Cook owns around 0.02% of Apple). It will make up for it multiplied across all non-Cook Apple shares, but isn't that the point?

jayd16 4y ago

I guess I really don't get the sentiment here. Layoffs are inherently bad and not just reflective of the market changing focus from growth to profits? Why is it clear that layoffs should have repercussions? What does it mean when almost every big company's management made the same mistake? I'm all for worker protections and good severance and unemployment benefits and its not great to be laid off but these takes just don't resonate with me.

baryphonic 4y ago
Because most mgmt seems to have no skin in the game. When they make bad decisions, the underlings often pay for it. This is especially true when they write corpo-speak blog posts "taking responsibility," which includes laying off 10% of the workforce. A CEO cutting his own pay seems like a much better first step. It signals accountability.
- amf12 4y ago
  > Because most mgmt seems to have no skin in the game This is not true. Most executives' compensation is tied to equity. For example, Tim Cook's base pay + bonus is 9M, but he has 40M in equity comp (performance + time based). > A CEO cutting his own pay seems like a much better first step. It signals accountability. This, I agree with.
  - simplotek 4y ago
    > This is not true. Most executives' compensation is tied to equity. For example, Tim Cook's base pay + bonus is 9M, but he has 40M in equity comp (performance + time based). Tim Cook is still getting paid millions. His pay cut was voluntary. Workers getting fired are getting zero salary and are not leaving because they want to. I'm sure Tim Cook isn't stressing about how to make rent or pay the mortgage, unlike people getting laid off.
  - baryphonic 4y ago
    You make a fair point I seem to remember when studying economics that someone analyzed management behavior and found senior executives were typically decent at their jobs and more or less had incentives to make decent decisions. Middle management was completely risk averse, had no skin in the game and made decisions only insofar as they wouldn't be fired. I wish I could find a link, but I read it years ago, though this more informal discussion cites similar work (they use family-owned businesses as a proxy for middle managers who do have skin in the game)[0] I do think that a CEO showing accountability sets a standard for the rest of mgmt and the organization, which is perhaps more accurate; though I'd hope that organizations find ways to hold middle management accountable for failures [0] https://www.wealthmanagement.com/equities/why-management-needs-have-skin-game https://www.wealthmanagement.com/equities/why-management-nee...

onlyrealcuzzo 4y ago

$50M pays for like 100 employees at Apple. It's not saving the company from doing 10% layoffs. Not even 0.1%...

akmarinov 4y ago
That's the thing - the company's not even doing layoffs

cableshaft 4y ago

I know whose stock I'll be buying for the forseeable future (Apple). I have both Google and Apple stock, but I'll stop buying Google for now. For most of these big wig shareholders it's probably the other way around, though.

anotherevan 4y ago

This article[1] may give a better explanation. Since Sep 2019, Apple's workforce increased by 20%. Microsoft was next closest with 53%, and both Meta and Amazon pretty much doubled. [1] https://www.wsj.com/articles/how-apple-has-so-far-avoided-layoffs-lean-hiring-no-free-lunches-11674274185 https://www.wsj.com/articles/how-apple-has-so-far-avoided-la...