5 ms·

Who cares? It's just business.

by Invictus0 3y ago

Retric 3y ago
Investors for one, I get annoyed at overly generous executive pay because it costs me money.
- mgkimsal 3y ago
  > overly generous executive pay ... it costs me money But how can you prove that? The very justification for generous executive pay is that you couldn't get most people to do that role because it's so demanding and without these particular people, revenue/profits would tank. (slight exaggeration, but I don't think by much).
  - orangepurple 3y ago
    I would buy that argument if entire American industries in question weren't mired by regulatory capture making competition impossible
  - BugsJustFindMe 3y ago
    > The very justification for generous executive pay is that you couldn't get most people to do that role because it's so demanding That's also my justification when I eat a second bowl of ice cream. Surely nobody else will want this ice cream. I guess I'll just have to eat it myself.
    - mgkimsal 3y ago
      "This ice cream isn't going to eat itself" :)
  - Retric 3y ago
    Overly generous is by definition excessive, not everyone paid at or above market rates is worth it. Someone making 5 million a year could actually be worth the money. So, it’s not a universal failing at every company, but there’s many examples of such things happening. Private equity is much maligned, but it has turned around some failing companies by gutting upper management then having a new IPO which worked out fine.
- FredPret 3y ago
  It'd be great for investors if the top positions were paid mostly / entirely in stock. That way we can entice a good CEO with high pay and our interests will still align.
  - silvestrov 3y ago
    That leads to short term thinking and pumping of stocks, often done by firing R&D and maintenance people.
    - lotsofpulp 3y ago
      There exist both long term and short term incentive plans. See page 10: https://www.zurich.com/-/media/project/zurich/dotcom/investor-relations/docs/general/board-of-directors-report-zig-march-2020.pdf?rev=79425b28e8b04719b94d040267b85311&sc_lang=en&hash=037DB574EE518259A9915200C00A8EFC https://www.zurich.com/-/media/project/zurich/dotcom/investo...
    - aurizon 3y ago
      A major example of this was the decline of Intel (that they are trying to reverse) that was driven by an inane diversion of $$ by accountants who spent billions on 'share buybacks' instead of R&D = the inexorable fall from grace. I have never understood this buyback philosophy and spoke against it(my whispers in a hurricane). It was done to increase the share price - it failed, buckets with no bottoms are hard to fill. Intel now has the chips program they now hope will fill the bucket - they should spend more on the bottom. TBF to Intel, they have stopped the BB and have (hopefully) repaired the bucket and might regain their lost stature. I see another bad act in the form of patent 'mining', a high brow form of trolling.
      - lotsofpulp 3y ago
        > I have never understood this buyback philosophy and spoke against it(my whispers in a hurricane) Buybacks come from net income (profit). A business always has a choice of using the profit to pay the business’s owners (via dividend or buybacks) or to invest it back into the business (such as spending on R&D). Obviously, what portion of the profit is ideal to spend on R&D and what portion of the profit to pay to owners is not an objective truth. And buybacks are nothing special, except that they allow more flexibility in how to reward the owners.

Who cares? It's just business.

Retric 3y ago

Investors for one, I get annoyed at overly generous executive pay because it costs me money.

mgkimsal 3y ago
> overly generous executive pay ... it costs me money But how can you prove that? The very justification for generous executive pay is that you couldn't get most people to do that role because it's so demanding and without these particular people, revenue/profits would tank. (slight exaggeration, but I don't think by much).
- orangepurple 3y ago
  I would buy that argument if entire American industries in question weren't mired by regulatory capture making competition impossible
- BugsJustFindMe 3y ago
  > The very justification for generous executive pay is that you couldn't get most people to do that role because it's so demanding That's also my justification when I eat a second bowl of ice cream. Surely nobody else will want this ice cream. I guess I'll just have to eat it myself.
  - mgkimsal 3y ago
    "This ice cream isn't going to eat itself" :)
- Retric 3y ago
  Overly generous is by definition excessive, not everyone paid at or above market rates is worth it. Someone making 5 million a year could actually be worth the money. So, it’s not a universal failing at every company, but there’s many examples of such things happening. Private equity is much maligned, but it has turned around some failing companies by gutting upper management then having a new IPO which worked out fine.
FredPret 3y ago
It'd be great for investors if the top positions were paid mostly / entirely in stock. That way we can entice a good CEO with high pay and our interests will still align.
- silvestrov 3y ago
  That leads to short term thinking and pumping of stocks, often done by firing R&D and maintenance people.
  - lotsofpulp 3y ago
    There exist both long term and short term incentive plans. See page 10: https://www.zurich.com/-/media/project/zurich/dotcom/investor-relations/docs/general/board-of-directors-report-zig-march-2020.pdf?rev=79425b28e8b04719b94d040267b85311&sc_lang=en&hash=037DB574EE518259A9915200C00A8EFC https://www.zurich.com/-/media/project/zurich/dotcom/investo...
  - aurizon 3y ago
    A major example of this was the decline of Intel (that they are trying to reverse) that was driven by an inane diversion of $$ by accountants who spent billions on 'share buybacks' instead of R&D = the inexorable fall from grace. I have never understood this buyback philosophy and spoke against it(my whispers in a hurricane). It was done to increase the share price - it failed, buckets with no bottoms are hard to fill. Intel now has the chips program they now hope will fill the bucket - they should spend more on the bottom. TBF to Intel, they have stopped the BB and have (hopefully) repaired the bucket and might regain their lost stature. I see another bad act in the form of patent 'mining', a high brow form of trolling.
    - lotsofpulp 3y ago
      > I have never understood this buyback philosophy and spoke against it(my whispers in a hurricane) Buybacks come from net income (profit). A business always has a choice of using the profit to pay the business’s owners (via dividend or buybacks) or to invest it back into the business (such as spending on R&D). Obviously, what portion of the profit is ideal to spend on R&D and what portion of the profit to pay to owners is not an objective truth. And buybacks are nothing special, except that they allow more flexibility in how to reward the owners.