8 ms·

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 misalign

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.

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.