5 ms·

CEOs are employed by the board, the board is made of major stockholders, those are pensions funds and other investors mainly interested in stock prices. No need

CEOs are employed by the board, the board is made of major stockholders, those are pensions funds and other investors mainly interested in stock prices. No need for conspiracy theories or pitchfork waving, it's just all working exactly how it's openly designed to.

0xDEAFBEAD 3y ago
If you were a major shareholder in a company, would you favor a CEO who ran it into the ground?
- SyzygistSix 3y ago
  For short term profit that I can walk away with? That is very different from building long term value. Both are profit. One profits from creation and has long term recurring benefits, the other profits from extraction, which only happens once. Both building a fire and building a house profit from a supply of wood. But they are pretty different in terms of long term pay off.
- p_l 3y ago
  If I am a faceless pension fund that is going to earn short term on this much better, and be free to walk away and do the same thing to another company? Sure. This is exactly the same playbook as with private equity - the point is to make the shareholders richer as fast as possible, and long-term strategies do not pay out as fast while possibly introducing longer term risks.
- sudosysgen 3y ago
  If I am a major shareholder, I would prefer a quick profit because I can then invest it somewhere else and have higher overall profits.
- tharmas 3y ago
  Please see the story of Jack Welch CEO of GE.
  - 0xDEAFBEAD 3y ago
    Can you elaborate? Wikipedia says Welch took GE from a market cap of $12 billion to $410 billion over the course of 20 years.
    - tharmas 3y ago
      He destroyed the Company in the long run. https://www.npr.org/2022/06/01/1101505691/short-term-profits-and-long-term-consequences-did-jack-welch-break-capitalism https://www.npr.org/2022/06/01/1101505691/short-term-profits...
cced 3y ago
You guys keep saying pension funds. Where are the sources that financialisation sucking us dry is because pension funds need to get seeded? We’re living in a time of record profits and ceo to worker pay ratio through the roof and you guys are implying pension funds, the little to last thing workers have, as the issue? Gee I’m wondering what we should all be thinking and doing about those pension funds and who that would actually serve. Y’all get that most of us don’t have pension funds, right? They’ve been gutted long time ago. Defined benefit to defined contribution ring any bells? But yes, let’s fight against the other plebs that have things we don’t, let’s blame pension funds and not the plethora of other issues. I tell ya, we’re funding pensions alright but it ain’t the teachers kind.
- michaelt 3y ago
  CEO pay is certainly way too high, I agree. But look at any big corporation, take the CEO's total compensation and divide it by the number of employees. The CEO of IBM earns an obscene $16.5 million per year - but divide that by IBM's 288,300 employees and it's $60 per employee per year. Wal-mart's CEO makes $25.31 million, but it's only $12 per employee per year. Even if we redistributed the CEO's entire salary to workers, $60/year isn't going to do much to close the gap between rich and poor.
  - yterdy 3y ago
    This is quite an arbitrary metric.
    - CoastalCoder 3y ago
      I find GP's metric useful. It helps address the question: wouldn't the company perform better if we did other things with that excess money?
      - yterdy 3y ago
        >wouldn't the company perform better if we did other things with that excess money? Of course. That's not what CEO pay/employee does, though; it trivializes the massive (over)compensation by putting it in seemingly-small terms. What we need to be analyzing CEO pay in terms of is 1) How much a person needs in order to live decently and with dignity in one's particular area, and 2) How much better than the "average" CEO any give one performs (to determine incentive pay). Certain entities, institutions, and groups have cartel-ized executive positions as a class and bid up their compensation, decoupled from real value. Another view: $60/employee doesn't seem like a lot, but if you remove the employees making over the median, or $100k, or some other resaonable cut-off, something tells me that the lowest-paid employees would see a meaningful increase in their take-home. GGP is purposely being reductive in a way that makes rethinking the issue more silly than it actually is.
jnash 3y ago
Nope. CEO's tend to be on the board of each others companies, making sure that there is never any argument over CEO compensation.

0xDEAFBEAD 3y ago

If you were a major shareholder in a company, would you favor a CEO who ran it into the ground?

SyzygistSix 3y ago
For short term profit that I can walk away with? That is very different from building long term value. Both are profit. One profits from creation and has long term recurring benefits, the other profits from extraction, which only happens once. Both building a fire and building a house profit from a supply of wood. But they are pretty different in terms of long term pay off.
p_l 3y ago
If I am a faceless pension fund that is going to earn short term on this much better, and be free to walk away and do the same thing to another company? Sure. This is exactly the same playbook as with private equity - the point is to make the shareholders richer as fast as possible, and long-term strategies do not pay out as fast while possibly introducing longer term risks.
sudosysgen 3y ago
If I am a major shareholder, I would prefer a quick profit because I can then invest it somewhere else and have higher overall profits.
tharmas 3y ago
Please see the story of Jack Welch CEO of GE.
- 0xDEAFBEAD 3y ago
  Can you elaborate? Wikipedia says Welch took GE from a market cap of $12 billion to $410 billion over the course of 20 years.
  - tharmas 3y ago
    He destroyed the Company in the long run. https://www.npr.org/2022/06/01/1101505691/short-term-profits-and-long-term-consequences-did-jack-welch-break-capitalism https://www.npr.org/2022/06/01/1101505691/short-term-profits...

cced 3y ago

You guys keep saying pension funds. Where are the sources that financialisation sucking us dry is because pension funds need to get seeded? We’re living in a time of record profits and ceo to worker pay ratio through the roof and you guys are implying pension funds, the little to last thing workers have, as the issue? Gee I’m wondering what we should all be thinking and doing about those pension funds and who that would actually serve. Y’all get that most of us don’t have pension funds, right? They’ve been gutted long time ago. Defined benefit to defined contribution ring any bells? But yes, let’s fight against the other plebs that have things we don’t, let’s blame pension funds and not the plethora of other issues. I tell ya, we’re funding pensions alright but it ain’t the teachers kind.

michaelt 3y ago
CEO pay is certainly way too high, I agree. But look at any big corporation, take the CEO's total compensation and divide it by the number of employees. The CEO of IBM earns an obscene $16.5 million per year - but divide that by IBM's 288,300 employees and it's $60 per employee per year. Wal-mart's CEO makes $25.31 million, but it's only $12 per employee per year. Even if we redistributed the CEO's entire salary to workers, $60/year isn't going to do much to close the gap between rich and poor.
- yterdy 3y ago
  This is quite an arbitrary metric.
  - CoastalCoder 3y ago
    I find GP's metric useful. It helps address the question: wouldn't the company perform better if we did other things with that excess money?
    - yterdy 3y ago
      >wouldn't the company perform better if we did other things with that excess money? Of course. That's not what CEO pay/employee does, though; it trivializes the massive (over)compensation by putting it in seemingly-small terms. What we need to be analyzing CEO pay in terms of is 1) How much a person needs in order to live decently and with dignity in one's particular area, and 2) How much better than the "average" CEO any give one performs (to determine incentive pay). Certain entities, institutions, and groups have cartel-ized executive positions as a class and bid up their compensation, decoupled from real value. Another view: $60/employee doesn't seem like a lot, but if you remove the employees making over the median, or $100k, or some other resaonable cut-off, something tells me that the lowest-paid employees would see a meaningful increase in their take-home. GGP is purposely being reductive in a way that makes rethinking the issue more silly than it actually is.

jnash 3y ago

Nope. CEO's tend to be on the board of each others companies, making sure that there is never any argument over CEO compensation.