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Analysis: Health care CEOs hauled in $4B last year as inflation pinched workers

122 points by leotravis10 3y ago

dools 3y ago
Ah so wages WERE the problem. Just a very small percentage of wages ...
churchill 3y ago
Well, blame the government and their ZIRP policies that caused that inflation in the first place. States will do literally EVERYTHING else but accept well-deserved blame.
cj 3y ago
I’m personally a bit tired of people complaining about executive pay. Would the world really be any different if executives were paid $4 million instead of $4 billion? It’s a drop in the bucket. It’s like blaming climate change on people who drive Lamborghinis. Yea, it’s a part of the problem, but is it really the problem we should be focused on fixing? How would the world be a better place if we stripped executives of their wealth?
- dnissley 3y ago
  I'd like to see the amount that all healthcare workers were paid during this period, for comparison. If it's 400 billion, it seems like 4 billion wouldn't be out of line.
  - speff 3y ago
    22mil healthcare workers according to [1] in 2021 ~$60k annual pay as of 2023 [2] Funny math ends up at $1.3T for healthcare workers. Looks like half an order magnitude higher than your estimate - even if we assume they were paid much less 2 years ago. [1] https://www.census.gov/library/stories/2021/04/who-are-our-health-care-workers.html https://www.census.gov/library/stories/2021/04/who-are-our-h... [2] https://www.salary.com/research/salary/posting/health-care-worker-salary https://www.salary.com/research/salary/posting/health-care-w...
  - lotsofpulp 3y ago
    That information does not advance the ragebait/clickbait agenda.
  - matheusmoreira 3y ago
    Healthcare workers is a much larger group compared to healthcare CEOs though. A few billions divided between a few CEOs is not the same as trillions diluted among tens of millions of workers.
- s5300 3y ago
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- DueDilligence 3y ago
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- onlyrealcuzzo 3y ago
  > Would the world really be any different if executives were paid $4 million instead of $4 billion? The coast wouldn't be dotted with grotesque clown house mansions. YMMV
- r00fus 3y ago
  Your analogy doesn't hold (like most car analogies). Someone making 100x more than the average worker in their industry simply doesn't have the capability to see those workers (nor the consumer) as anything but ants. I somewhat agree that C-levels aren't the root of this problem. What's needed is to rein in hedge funds (who corrupt almost all industries) by closing things like the "carried interest" tax loophole.
  - endisneigh 3y ago
    Why restrict to industry? Do you see the global poor as ants?
    - Eisenstein 3y ago
      That analogy doesn't hold. The reason they see those below them as ants is because there are so few like them. If there are only 2,640 billionaires in the entire world then that is very different from being middle class. Billionaires never have to take a commercial flight and never have to wait in line, and never have to wait for table, etc.
      - endisneigh 3y ago
        There are literally millions of millionaires in America. Millionaires who always have fresh water, food, electricity, a home they own, etc. So what?
        r00fus 3y ago
        There is a quantitative lifestyle difference between a millionaire and a billionaire. And between someone who is compelled to work for a living vs. someone who can subsist at the highest lifestyle on passive income alone.
- ROTMetro 3y ago
  I'm currently modifying a car. Each part is a drop in the bucket yet once I add up the price of them all...oh look I can't afford it and something has to give. Want to guess which 'something' has never been looked at to give for, well, at least my entire past middle age adult life?
- digdugdirk 3y ago
  On the other hand, Moderna's CEO made 400 million last year. Moderna has 4000 total employees. I would argue that ratio is skewed heavily in the wrong direction, and the company would be much better off if the vast majority of that money went nearly anywhere else. That said, I'd genuinely love to hear any legitimate arguments as to why that payout is in the shareholders best interest.
  - WalterBright 3y ago
    The Moderna shareholders can always dump their Moderna stock and invest in other companies if they want.
  - Aunche 3y ago
    He made $400 million from stock sales. He got paid 20 million by Moderna. If the first employees agreed to sacrifice their salaries for more equity, they would be similarly well paid.
    - lacrimacida 3y ago
      The more you get the more you can sacrifice.
  - lotsofpulp 3y ago
    > why that payout is in the shareholders best interest. The shareholders agreed to give their employer a certain number of shares as compensation, before the shares were worth $400M. Notice that you do not read articles about executives who receive lower compensation because the share price didn’t do much.
- WalterBright 3y ago
  > How would the world be a better place if we stripped executives of their wealth? It's been tried in places like Cambodia and the Soviet Union. The result is a lot of dead people, and the rest were worse off.
  - mxkopy 3y ago
    I’m not sure that letting people generally do what they want and limiting egregious amounts of power and wealth are mutually exclusive
  - Cyph0n 3y ago
    That’s quite an.. extreme example. Almost sounds like something you’d read on one of those Cold War era red scare posters.
    - WalterBright 3y ago
      Do you think I'm joking? https://en.wikipedia.org/wiki/Killing_Fields https://en.wikipedia.org/wiki/Killing_Fields https://en.wikipedia.org/wiki/Holodomor https://en.wikipedia.org/wiki/Holodomor There are many countries, and lots of history. Maybe you could point to an example of getting rid of wealthy people and the lot of everyone else improved?
      - deleted 3y ago
        [deleted]
      - Eisenstein 3y ago
        > There are many countries, and lots of history. Maybe you could point to an example of getting rid of wealthy people and the lot of everyone else improved? I would argue that you are not talking about getting rid of wealthy people in the same context as those you replied to. This is not about 'class warfare' or 'revolution'. No one is going to the 'killing fields'. This is about changing policy via democratic process that changes incentives and structures that allow this to happen in the first place, not by chopping off the heads of rich people. However, I would argue against 'getting rid of billionaires'. The billionaires aren't the problem -- the inequality is the problem. If we put in place a system that had a 'bottom rung' which was high enough from poverty then it wouldn't matter.
- doctorpangloss 3y ago
  You are never going to be a billionaire. But you can conceive of being a landlord, surgeon, or FAANG engineer. Those are all wealthy people, you have a chance. But not billionaire. Do you see? They're like black holes. The laws of physics are speculative at the Billionaire Event Horizon. It seems reasonable that they play by different rules. No one is going to answer your questions, they're neither sincere, nor interesting, nor the gotchas that you think they are.
- candiddevmike 3y ago
  There should be a maximum wage/wealth, yes. Need a check on humanity's need to hoard.
- morby 3y ago
  I think this is inaccurate. Complaints about CEO wages are made from positions that perceive their pay has stagnated and is therefore not compensatory. The facts about wage growth bare this out to be true. When you have executives and C suites making money have over foot but you have no movement in common employee wages you will see comparisons being drawn. Those comparisons will then lead to derision.
- abhayhegde 3y ago
  This whole comment is an unhealthy take. > Would the world really be any different if executives were paid $4 million instead of $4 billion? Definitely! You're asking if worsening wealth inequality hurts anything. This greed and unfair compensation is the entire reason why vasts of people suffer through life while ridiculously few get to have control over theirs. I mean that on one hand you have people who can't afford housing and food, and the other can't meaningfully spend whatever they are bestowed with. > How would the world be a better place if we stripped executives of their wealth? Would a redistribution of that wealth imply better living standards for everyone?
  - s1artibartfast 3y ago
    >> How would the world be a better place if we stripped executives of their wealth? >Would a redistribution of that wealth imply better living standards for everyone? Basically no. This is the misconception about wealth inequality in general. Living standards are more about goods and services produced, not numbers in a bank account. The wealthy consume more, but not proportional to their wealth. most of their wealth isn't used for consumption at all. Elon Musk must doesn't eat 100 cattle a day, have 1,000 personal doctors, or live in 1 million different houses. If you took all of Elon's wealth, sold it off and redistributed it (assuming this is even possible), you would just see more expensive burgers, more expensive doctors, and higher cost of rent. This is because Elon isn't using up all the resources. He just has a higher number in a computer somewhere.
  - andsoitis 3y ago
    > Would a redistribution of that wealth imply better living standards for everyone? No. > I mean on one hand you have people who can't afford housing and food, and the other can't meaningfully spend whatever they are bestowed with. The fabulously wealthy aren't spending their billions on consumption. You're mistaking wealth and captial for money.
    - OGWhales 3y ago
      > > Would a redistribution of that wealth imply better living standards for everyone? > No. Why not? > The fabulously wealthy aren't spending their billions on consumption. Naturally not, that would be impractical. However, their immense wealth affords them immense power in society and that is of concern. > You're mistaking wealth and captial for money. I see this repeated very often by people defending the ultra rich and never understood why they think it was a good reply. Especially in this case, as their point was some people barely scrape by while others have so much money it’s more than they can reasonably spend. Nothing they said indicated they were confused about the difference between money and wealth.
canvascritic 3y ago
One might think of executive pay in the same way startups think about user acquisition cost versus lifetime value. The question isn't just about the numbers per se, but about the underlying value an executive brings to the organization, and whether that value justifies the cost. History has shown that markets often reward the bold and innovative, but they also have a way of self-correcting when things go astray. The parallel with executive pay is intriguing: how do you quantify the value of leadership, vision, and strategic acumen? it seems the debate around executive pay reflects deeper societal questions about value creation and value distribution. maybe, possibly, the solution isn't to reduce executive pay outright, but to tie it more closely to demonstrable long-term value creation, not unlike how successful startups operate.
- onlyrealcuzzo 3y ago
  > The parallel with executive pay is intriguing: how do you quantify the value of leadership, vision, and strategic acumen? Post-ex?
  - canvascritic 3y ago
    Yeah, no free lunch / easy solutions here. post-ex evaluation often misses the ongoing impact of decisions made during a leader's tenure. also there is difficulty in isolating the effects of a single leader from the myriad of other factors that could influence a company's success post-exit. ex. Market conditions, subsequent leadership, and unforeseen global events, to name a few
    - s1artibartfast 3y ago
      The answer is is probably higher base pay along with longer maturity dates for options, or at least a wider spread of maturity dates.
- whatwhaaaaat 3y ago
  Or how about ceos serve on other ceos boards and have been approving absolutely outrageous packages for 30+ years and now we’re in clown world. All of that nonsense about value and vision means nothing when ceos helm companies who are protected by a myriad of what should be considered antitrust violations. What vision and value could a healthcare ceo possibly provide? Been in the corp world for 20 years and not once have I seen any meaningful change come from a ceo of companies the size of which we’re talking about.
WalterBright 3y ago
Inflation is the result of trillions of dollars in deficit spending, so $4b won't make any perceptible difference.
- ROTMetro 3y ago
  Why are product companies going on earnings calls and saying that inflation is coming from their raising their profits if it results from deficit spending? https://www.theguardian.com/business/2022/apr/27/inflation-corporate-america-increased-prices-profits https://www.theguardian.com/business/2022/apr/27/inflation-c...
  - WalterBright 3y ago
    When a lot of money without collateral is printed, it dilutes the value of the money already in circulation. That dilution of value is called "inflation". I've heard endless other "explanations" for inflation. None of them make any sense, and don't fit the facts.
    - Eisenstein 3y ago
      You being unable to understand something in a certain way that others do does not make that thing into what you can understand. Edit: I am being rate limited, so here is my response to the reply below: Think of it this way: economies are not simplistic analogies to villagers being given free money. Our incomes have grown a lot over the past century yet things get cheaper. It is never a simple equation. If it were that easy that a bit of deductive reasoning could explain it then it would be pretty obvious, but the fact that we are arguing about it at all means that it isn't, and thinking that it is, because you cannot grasp the complexity, is not going help anything. If the utmost minds in the field are saying that it is really complicated and that they don't even know exactly how it works, then why do you think you have it figured out?
      - WalterBright 3y ago
        Think of it this way. Suppose your villagers have $10,000 and their own economy. Now give them another $10,000. Prices will double.
nerdponx 3y ago
Reminder: if prices are going up but your salary isn't going up, it's not really inflation, you're just getting poor.
endisneigh 3y ago
These stats are so meaningless. American big tech workers make literally tens to hundreds of thousands of times more than poor Africans. Ok, what are we going to do about it? Of course, someone will respond moving the goal posts about how it’s different. Turns out when you’re the one making too much money it doesn’t matter or count, which is, funny enough, the same thing these health care CEOs would say. Unlike many hypocrites I have absolutely no problem making thousands more than the global poor and the global rich making more than me either. It is what it is. I can make hundreds of thousands more while still hoping and contributing to raising the floor in quality of life. Not impose meaningless arbitrary income limits. People think this line of thinking is to shut down discussion, but there’s no discussion to be had to begin with. Shall we make everyone have the same wage? No? What’s the actual proposal here? None.
- nerdponx 3y ago
  That sucks too, but it's a different issue.
  - endisneigh 3y ago
    How is it different? If you believe it’s bad for certain individuals to have too much money then there’s a very long tail here.
    - mensetmanusman 3y ago
      It’s different because of roads and infrastructure.
    - nerdponx 3y ago
      Many reasons, but if you're going to whatabout this aggressively it's not worth arguing. But chiefly because African poverty isn't closely related to inflation in the West, while corporate profits are, and are possibly causal for it. You're recasting this as "they have too much money!!" But that's obviously not the problem and it's just bad faith to claim that it is. If you want to get riled up, get riled up over the idea that maybe the same people responsible for poverty in the Global South are also responsible for inflation in the West. Or you can try to deflect on any related issues in the hope that you never have to worry about it, your choice. Edit: you added this and I found it particularly ridiculous. > no problem making thousands more than the global poor and the global rich making more than me either. It is what it is. Great, so let other people who care do their thing. Do you expect someone making $100k a year to give it all away to some random family with less money? That's an individual act of heroism, but it doesn't make a dent in the problem on a bigger scale. Also let's be clear: I for one don't care that some people are rich, I care that some people are poor. If one person's richness is a cause for the other's poverty, then it's a problem. > Not impose meaningless arbitrary income limits. Who is? You might not be aware, but a large number of people in the US and Canada are struggling financially right now due to inflation. So when someone else seems to be making increasing profits at the same time as they're raising those prices, you start to wonder about the causes. This isn't some Harrison Bergeron situation, it's about actually trying to solve problems. If you are content with your life then stay out of the way of the people who want to make things better.
yieldcrv 3y ago
> The data offer a detailed view of how top executives are incentivized, like how stock continues to comprise most of their compensation Okay. We should blame the market for supporting the price, fungibility and liquidity of these compensation packages Or not blame anyone at all Rage bait.
refurb 3y ago
My complaint about these stats about CEO pay is they always limit it to the CEOs at the top 100 corporations to every employee. There are millions of CEOs in the US, more in smaller companies than larger companies, and shockingly small companies pay CEOs much less. So why not do that comparison? Oh yeah, because the numbers aren't clickbait worthy.
mycentstoo 3y ago
I think Americans workers are willing to tolerate conditions of exorbitant wealth disparity for at least two reasons. First, because Americans believe someday that they will be wealthy and they do not want to eliminate their chance to join the club[a]. In my opinion, this is the most satisfying explanation. Workers do not want to remove that ladder to the upper class because in doing so, they place a hard cap on their expected outcomes. Second, American political culture is derivative of a property-rights focused political philosophy. One of the biggest influences on the Bill of Rights and it's explicit protection of property rights was John Locke's Two Treatises of Government. John Locke argues that a defining purpose of government is in the protection of property (life, liberty and property). Americans therefore, view wealth as at least in some part meritocratic and rich, having earned their extra property, are wary of retracting that property. The importance of protecting what's "theirs" is politically, socially and legally baked-in to society. If Americans' belief in their own prosperity suffer and/or the relative importance of property diminishes in light of other rights (health care, equality, etc.), I think then we might begin to see changes for high-wealth compensation. But, I would argue as long as each of these remain strong, we aren't likely to see any changes. a. https://www.magnifymoney.com/news/wealthy-survey/ https://www.magnifymoney.com/news/wealthy-survey/, https://www.cnbc.com/2022/08/31/44percent-of-americans-think-they-can-achieve-billionaire-status.html https://www.cnbc.com/2022/08/31/44percent-of-americans-think...
- DoreenMichele 3y ago
  I think Americans workers are willing to tolerate conditions of exorbitant wealth disparity for at least two reasons. I think most likely most American workers feel pretty helpless, like pawns in a game they can't exercise control over. They likely do not think of themselves as tolerating wealth disparity. They most likely think of themselves as enduring something they simply can't fix.
  - andsoitis 3y ago
    While most Americas say there is too much economic inequality in the US, there are other issues that they are much more concerned about: 1. Making health care more affordable 2. Dealing with terrorism 3. Reducing gun violence 4. Addressing climate change 5. Reducing income inequality 6. Reducing illegal immigration And #6 is quite telling in the context of income inequality. https://www.pewresearch.org/social-trends/2020/01/09/most-americans-say-there-is-too-much-economic-inequality-in-the-u-s-but-fewer-than-half-call-it-a-top-priority/ https://www.pewresearch.org/social-trends/2020/01/09/most-am...
didibus 3y ago
CEO compensation is often disconnected from traditional supply and demand dynamics or direct value creation, and that's a problem. 1. They set their own pay CEOs determine their own pay packages or have influence over the decisions of compensation committees. 2. Their compensation keeps escalating higher and higher over time, beyond reasonable impact to performance Companies benchmark their CEO's compensation against that of peers in similar roles at other companies. This leads to a "race to the top" effect, where CEOs' pay keeps escalating without direct correlation to company performance. 3. They're rewarded for short term gains CEO's often have bonuses driven by short term stock performance, so they can game their decisions to maximize their own pay over the companies long term benefit. 4. Who is considered for the role of CEO is artificially limited Only people with experience managing a slightly smaller company are considered qualified. This makes the pool of candidate small, which allows them to justify a high pay. 5. They're an inner club Eventually, it's CEO's hiring CEO's and setting each other's pay. It's normal that they all eventually decide to pay each other more and more. As CEOs are on boards and board members are CEOs.
- peanuty1 3y ago
  Technically isn't it the Board of Directors that sets the CEO's total comp?
  - didibus 3y ago
    It depends. In private companies it can be the CEO, or the CEO can be the owner who sets it's own comp. But generally yes, it's the board of directors, but rarely without input from the CEO. So it's not uncommon for CEOs to have an influence over the compensation committee about what their comp should be.
imgabe 3y ago
How much of that is stock based compensation that is artificially inflated by the Fed pumping trillions of dollars into the economy? These comparisons are so disingenuous when they implicitly equate a stock grant to cash.

122 points by leotravis10 3y ago

Ah so wages WERE the problem. Just a very small percentage of wages ...

Well, blame the government and their ZIRP policies that caused that inflation in the first place. States will do literally EVERYTHING else but accept well-deserved blame.

cj 3y ago

I’m personally a bit tired of people complaining about executive pay. Would the world really be any different if executives were paid $4 million instead of $4 billion? It’s a drop in the bucket. It’s like blaming climate change on people who drive Lamborghinis. Yea, it’s a part of the problem, but is it really the problem we should be focused on fixing? How would the world be a better place if we stripped executives of their wealth?

dnissley 3y ago
I'd like to see the amount that all healthcare workers were paid during this period, for comparison. If it's 400 billion, it seems like 4 billion wouldn't be out of line.
- speff 3y ago
  22mil healthcare workers according to [1] in 2021 ~$60k annual pay as of 2023 [2] Funny math ends up at $1.3T for healthcare workers. Looks like half an order magnitude higher than your estimate - even if we assume they were paid much less 2 years ago. [1] https://www.census.gov/library/stories/2021/04/who-are-our-health-care-workers.html https://www.census.gov/library/stories/2021/04/who-are-our-h... [2] https://www.salary.com/research/salary/posting/health-care-worker-salary https://www.salary.com/research/salary/posting/health-care-w...
- lotsofpulp 3y ago
  That information does not advance the ragebait/clickbait agenda.
- matheusmoreira 3y ago
  Healthcare workers is a much larger group compared to healthcare CEOs though. A few billions divided between a few CEOs is not the same as trillions diluted among tens of millions of workers.
s5300 3y ago
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DueDilligence 3y ago
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onlyrealcuzzo 3y ago
> Would the world really be any different if executives were paid $4 million instead of $4 billion? The coast wouldn't be dotted with grotesque clown house mansions. YMMV
r00fus 3y ago
Your analogy doesn't hold (like most car analogies). Someone making 100x more than the average worker in their industry simply doesn't have the capability to see those workers (nor the consumer) as anything but ants. I somewhat agree that C-levels aren't the root of this problem. What's needed is to rein in hedge funds (who corrupt almost all industries) by closing things like the "carried interest" tax loophole.
- endisneigh 3y ago
  Why restrict to industry? Do you see the global poor as ants?
  - Eisenstein 3y ago
    That analogy doesn't hold. The reason they see those below them as ants is because there are so few like them. If there are only 2,640 billionaires in the entire world then that is very different from being middle class. Billionaires never have to take a commercial flight and never have to wait in line, and never have to wait for table, etc.
    - endisneigh 3y ago
      There are literally millions of millionaires in America. Millionaires who always have fresh water, food, electricity, a home they own, etc. So what?
      - r00fus 3y ago
        There is a quantitative lifestyle difference between a millionaire and a billionaire. And between someone who is compelled to work for a living vs. someone who can subsist at the highest lifestyle on passive income alone.
ROTMetro 3y ago
I'm currently modifying a car. Each part is a drop in the bucket yet once I add up the price of them all...oh look I can't afford it and something has to give. Want to guess which 'something' has never been looked at to give for, well, at least my entire past middle age adult life?
digdugdirk 3y ago
On the other hand, Moderna's CEO made 400 million last year. Moderna has 4000 total employees. I would argue that ratio is skewed heavily in the wrong direction, and the company would be much better off if the vast majority of that money went nearly anywhere else. That said, I'd genuinely love to hear any legitimate arguments as to why that payout is in the shareholders best interest.
- WalterBright 3y ago
  The Moderna shareholders can always dump their Moderna stock and invest in other companies if they want.
- Aunche 3y ago
  He made $400 million from stock sales. He got paid 20 million by Moderna. If the first employees agreed to sacrifice their salaries for more equity, they would be similarly well paid.
  - lacrimacida 3y ago
    The more you get the more you can sacrifice.
- lotsofpulp 3y ago
  > why that payout is in the shareholders best interest. The shareholders agreed to give their employer a certain number of shares as compensation, before the shares were worth $400M. Notice that you do not read articles about executives who receive lower compensation because the share price didn’t do much.
WalterBright 3y ago
> How would the world be a better place if we stripped executives of their wealth? It's been tried in places like Cambodia and the Soviet Union. The result is a lot of dead people, and the rest were worse off.
- mxkopy 3y ago
  I’m not sure that letting people generally do what they want and limiting egregious amounts of power and wealth are mutually exclusive
- Cyph0n 3y ago
  That’s quite an.. extreme example. Almost sounds like something you’d read on one of those Cold War era red scare posters.
  - WalterBright 3y ago
    Do you think I'm joking? https://en.wikipedia.org/wiki/Killing_Fields https://en.wikipedia.org/wiki/Killing_Fields https://en.wikipedia.org/wiki/Holodomor https://en.wikipedia.org/wiki/Holodomor There are many countries, and lots of history. Maybe you could point to an example of getting rid of wealthy people and the lot of everyone else improved?
    - deleted 3y ago
      [deleted]
    - Eisenstein 3y ago
      > There are many countries, and lots of history. Maybe you could point to an example of getting rid of wealthy people and the lot of everyone else improved? I would argue that you are not talking about getting rid of wealthy people in the same context as those you replied to. This is not about 'class warfare' or 'revolution'. No one is going to the 'killing fields'. This is about changing policy via democratic process that changes incentives and structures that allow this to happen in the first place, not by chopping off the heads of rich people. However, I would argue against 'getting rid of billionaires'. The billionaires aren't the problem -- the inequality is the problem. If we put in place a system that had a 'bottom rung' which was high enough from poverty then it wouldn't matter.
doctorpangloss 3y ago
You are never going to be a billionaire. But you can conceive of being a landlord, surgeon, or FAANG engineer. Those are all wealthy people, you have a chance. But not billionaire. Do you see? They're like black holes. The laws of physics are speculative at the Billionaire Event Horizon. It seems reasonable that they play by different rules. No one is going to answer your questions, they're neither sincere, nor interesting, nor the gotchas that you think they are.
candiddevmike 3y ago
There should be a maximum wage/wealth, yes. Need a check on humanity's need to hoard.
morby 3y ago
I think this is inaccurate. Complaints about CEO wages are made from positions that perceive their pay has stagnated and is therefore not compensatory. The facts about wage growth bare this out to be true. When you have executives and C suites making money have over foot but you have no movement in common employee wages you will see comparisons being drawn. Those comparisons will then lead to derision.
abhayhegde 3y ago
This whole comment is an unhealthy take. > Would the world really be any different if executives were paid $4 million instead of $4 billion? Definitely! You're asking if worsening wealth inequality hurts anything. This greed and unfair compensation is the entire reason why vasts of people suffer through life while ridiculously few get to have control over theirs. I mean that on one hand you have people who can't afford housing and food, and the other can't meaningfully spend whatever they are bestowed with. > How would the world be a better place if we stripped executives of their wealth? Would a redistribution of that wealth imply better living standards for everyone?
- s1artibartfast 3y ago
  >> How would the world be a better place if we stripped executives of their wealth? >Would a redistribution of that wealth imply better living standards for everyone? Basically no. This is the misconception about wealth inequality in general. Living standards are more about goods and services produced, not numbers in a bank account. The wealthy consume more, but not proportional to their wealth. most of their wealth isn't used for consumption at all. Elon Musk must doesn't eat 100 cattle a day, have 1,000 personal doctors, or live in 1 million different houses. If you took all of Elon's wealth, sold it off and redistributed it (assuming this is even possible), you would just see more expensive burgers, more expensive doctors, and higher cost of rent. This is because Elon isn't using up all the resources. He just has a higher number in a computer somewhere.
- andsoitis 3y ago
  > Would a redistribution of that wealth imply better living standards for everyone? No. > I mean on one hand you have people who can't afford housing and food, and the other can't meaningfully spend whatever they are bestowed with. The fabulously wealthy aren't spending their billions on consumption. You're mistaking wealth and captial for money.
  - OGWhales 3y ago
    > > Would a redistribution of that wealth imply better living standards for everyone? > No. Why not? > The fabulously wealthy aren't spending their billions on consumption. Naturally not, that would be impractical. However, their immense wealth affords them immense power in society and that is of concern. > You're mistaking wealth and captial for money. I see this repeated very often by people defending the ultra rich and never understood why they think it was a good reply. Especially in this case, as their point was some people barely scrape by while others have so much money it’s more than they can reasonably spend. Nothing they said indicated they were confused about the difference between money and wealth.

canvascritic 3y ago

One might think of executive pay in the same way startups think about user acquisition cost versus lifetime value. The question isn't just about the numbers per se, but about the underlying value an executive brings to the organization, and whether that value justifies the cost. History has shown that markets often reward the bold and innovative, but they also have a way of self-correcting when things go astray. The parallel with executive pay is intriguing: how do you quantify the value of leadership, vision, and strategic acumen? it seems the debate around executive pay reflects deeper societal questions about value creation and value distribution. maybe, possibly, the solution isn't to reduce executive pay outright, but to tie it more closely to demonstrable long-term value creation, not unlike how successful startups operate.

onlyrealcuzzo 3y ago
> The parallel with executive pay is intriguing: how do you quantify the value of leadership, vision, and strategic acumen? Post-ex?
- canvascritic 3y ago
  Yeah, no free lunch / easy solutions here. post-ex evaluation often misses the ongoing impact of decisions made during a leader's tenure. also there is difficulty in isolating the effects of a single leader from the myriad of other factors that could influence a company's success post-exit. ex. Market conditions, subsequent leadership, and unforeseen global events, to name a few
  - s1artibartfast 3y ago
    The answer is is probably higher base pay along with longer maturity dates for options, or at least a wider spread of maturity dates.
whatwhaaaaat 3y ago
Or how about ceos serve on other ceos boards and have been approving absolutely outrageous packages for 30+ years and now we’re in clown world. All of that nonsense about value and vision means nothing when ceos helm companies who are protected by a myriad of what should be considered antitrust violations. What vision and value could a healthcare ceo possibly provide? Been in the corp world for 20 years and not once have I seen any meaningful change come from a ceo of companies the size of which we’re talking about.

WalterBright 3y ago

Inflation is the result of trillions of dollars in deficit spending, so $4b won't make any perceptible difference.

ROTMetro 3y ago
Why are product companies going on earnings calls and saying that inflation is coming from their raising their profits if it results from deficit spending? https://www.theguardian.com/business/2022/apr/27/inflation-corporate-america-increased-prices-profits https://www.theguardian.com/business/2022/apr/27/inflation-c...
- WalterBright 3y ago
  When a lot of money without collateral is printed, it dilutes the value of the money already in circulation. That dilution of value is called "inflation". I've heard endless other "explanations" for inflation. None of them make any sense, and don't fit the facts.
  - Eisenstein 3y ago
    You being unable to understand something in a certain way that others do does not make that thing into what you can understand. Edit: I am being rate limited, so here is my response to the reply below: Think of it this way: economies are not simplistic analogies to villagers being given free money. Our incomes have grown a lot over the past century yet things get cheaper. It is never a simple equation. If it were that easy that a bit of deductive reasoning could explain it then it would be pretty obvious, but the fact that we are arguing about it at all means that it isn't, and thinking that it is, because you cannot grasp the complexity, is not going help anything. If the utmost minds in the field are saying that it is really complicated and that they don't even know exactly how it works, then why do you think you have it figured out?
    - WalterBright 3y ago
      Think of it this way. Suppose your villagers have $10,000 and their own economy. Now give them another $10,000. Prices will double.

nerdponx 3y ago

Reminder: if prices are going up but your salary isn't going up, it's not really inflation, you're just getting poor.

endisneigh 3y ago

These stats are so meaningless. American big tech workers make literally tens to hundreds of thousands of times more than poor Africans. Ok, what are we going to do about it? Of course, someone will respond moving the goal posts about how it’s different. Turns out when you’re the one making too much money it doesn’t matter or count, which is, funny enough, the same thing these health care CEOs would say. Unlike many hypocrites I have absolutely no problem making thousands more than the global poor and the global rich making more than me either. It is what it is. I can make hundreds of thousands more while still hoping and contributing to raising the floor in quality of life. Not impose meaningless arbitrary income limits. People think this line of thinking is to shut down discussion, but there’s no discussion to be had to begin with. Shall we make everyone have the same wage? No? What’s the actual proposal here? None.

nerdponx 3y ago
That sucks too, but it's a different issue.
- endisneigh 3y ago
  How is it different? If you believe it’s bad for certain individuals to have too much money then there’s a very long tail here.
  - mensetmanusman 3y ago
    It’s different because of roads and infrastructure.
  - nerdponx 3y ago
    Many reasons, but if you're going to whatabout this aggressively it's not worth arguing. But chiefly because African poverty isn't closely related to inflation in the West, while corporate profits are, and are possibly causal for it. You're recasting this as "they have too much money!!" But that's obviously not the problem and it's just bad faith to claim that it is. If you want to get riled up, get riled up over the idea that maybe the same people responsible for poverty in the Global South are also responsible for inflation in the West. Or you can try to deflect on any related issues in the hope that you never have to worry about it, your choice. Edit: you added this and I found it particularly ridiculous. > no problem making thousands more than the global poor and the global rich making more than me either. It is what it is. Great, so let other people who care do their thing. Do you expect someone making $100k a year to give it all away to some random family with less money? That's an individual act of heroism, but it doesn't make a dent in the problem on a bigger scale. Also let's be clear: I for one don't care that some people are rich, I care that some people are poor. If one person's richness is a cause for the other's poverty, then it's a problem. > Not impose meaningless arbitrary income limits. Who is? You might not be aware, but a large number of people in the US and Canada are struggling financially right now due to inflation. So when someone else seems to be making increasing profits at the same time as they're raising those prices, you start to wonder about the causes. This isn't some Harrison Bergeron situation, it's about actually trying to solve problems. If you are content with your life then stay out of the way of the people who want to make things better.

yieldcrv 3y ago

> The data offer a detailed view of how top executives are incentivized, like how stock continues to comprise most of their compensation Okay. We should blame the market for supporting the price, fungibility and liquidity of these compensation packages Or not blame anyone at all Rage bait.

refurb 3y ago

My complaint about these stats about CEO pay is they always limit it to the CEOs at the top 100 corporations to every employee. There are millions of CEOs in the US, more in smaller companies than larger companies, and shockingly small companies pay CEOs much less. So why not do that comparison? Oh yeah, because the numbers aren't clickbait worthy.

mycentstoo 3y ago

I think Americans workers are willing to tolerate conditions of exorbitant wealth disparity for at least two reasons. First, because Americans believe someday that they will be wealthy and they do not want to eliminate their chance to join the club[a]. In my opinion, this is the most satisfying explanation. Workers do not want to remove that ladder to the upper class because in doing so, they place a hard cap on their expected outcomes. Second, American political culture is derivative of a property-rights focused political philosophy. One of the biggest influences on the Bill of Rights and it's explicit protection of property rights was John Locke's Two Treatises of Government. John Locke argues that a defining purpose of government is in the protection of property (life, liberty and property). Americans therefore, view wealth as at least in some part meritocratic and rich, having earned their extra property, are wary of retracting that property. The importance of protecting what's "theirs" is politically, socially and legally baked-in to society. If Americans' belief in their own prosperity suffer and/or the relative importance of property diminishes in light of other rights (health care, equality, etc.), I think then we might begin to see changes for high-wealth compensation. But, I would argue as long as each of these remain strong, we aren't likely to see any changes. a. https://www.magnifymoney.com/news/wealthy-survey/ https://www.magnifymoney.com/news/wealthy-survey/, https://www.cnbc.com/2022/08/31/44percent-of-americans-think-they-can-achieve-billionaire-status.html https://www.cnbc.com/2022/08/31/44percent-of-americans-think...

DoreenMichele 3y ago
I think Americans workers are willing to tolerate conditions of exorbitant wealth disparity for at least two reasons. I think most likely most American workers feel pretty helpless, like pawns in a game they can't exercise control over. They likely do not think of themselves as tolerating wealth disparity. They most likely think of themselves as enduring something they simply can't fix.
- andsoitis 3y ago
  While most Americas say there is too much economic inequality in the US, there are other issues that they are much more concerned about: 1. Making health care more affordable 2. Dealing with terrorism 3. Reducing gun violence 4. Addressing climate change 5. Reducing income inequality 6. Reducing illegal immigration And #6 is quite telling in the context of income inequality. https://www.pewresearch.org/social-trends/2020/01/09/most-americans-say-there-is-too-much-economic-inequality-in-the-u-s-but-fewer-than-half-call-it-a-top-priority/ https://www.pewresearch.org/social-trends/2020/01/09/most-am...

didibus 3y ago

CEO compensation is often disconnected from traditional supply and demand dynamics or direct value creation, and that's a problem. 1. They set their own pay CEOs determine their own pay packages or have influence over the decisions of compensation committees. 2. Their compensation keeps escalating higher and higher over time, beyond reasonable impact to performance Companies benchmark their CEO's compensation against that of peers in similar roles at other companies. This leads to a "race to the top" effect, where CEOs' pay keeps escalating without direct correlation to company performance. 3. They're rewarded for short term gains CEO's often have bonuses driven by short term stock performance, so they can game their decisions to maximize their own pay over the companies long term benefit. 4. Who is considered for the role of CEO is artificially limited Only people with experience managing a slightly smaller company are considered qualified. This makes the pool of candidate small, which allows them to justify a high pay. 5. They're an inner club Eventually, it's CEO's hiring CEO's and setting each other's pay. It's normal that they all eventually decide to pay each other more and more. As CEOs are on boards and board members are CEOs.

peanuty1 3y ago
Technically isn't it the Board of Directors that sets the CEO's total comp?
- didibus 3y ago
  It depends. In private companies it can be the CEO, or the CEO can be the owner who sets it's own comp. But generally yes, it's the board of directors, but rarely without input from the CEO. So it's not uncommon for CEOs to have an influence over the compensation committee about what their comp should be.

imgabe 3y ago

How much of that is stock based compensation that is artificially inflated by the Fed pumping trillions of dollars into the economy? These comparisons are so disingenuous when they implicitly equate a stock grant to cash.