5 ms·

IMO an equation like that would be fine as long as you made it possible for CEOs of larger companies to make more money than CEOs of small and medium sized comp

by cj 3y ago

IMO an equation like that would be fine as long as you made it possible for CEOs of larger companies to make more money than CEOs of small and medium sized companies. There’s a job market for C-Suite employees (whether we care to admit it or not). At a certain point you won’t get qualified candidates if you can’t reward them enough, same as engineers or any other role. The answer for how much CEOs should be paid is the amount of money you would need to pay to employ the most optimal person to run the company. Figuring out what that number is is difficult.

skyyler 3y ago
Well that's simple, larger companies that want to pay their CEO more can pay their lowest paid employees more.
- deleted 3y ago
  [deleted]
- burnerburnson 3y ago
  That's moronic. A good CEO at a fortune 500 company could have a $100M revenue impact. That same CEO could never be worth $100M to a local restaurant. The idea that the bigger company can't offer more to attract a better CEO just because both businesses employ janitors that make market rate is mind-numbingly stupid.
  - tbrownaw 3y ago
    I thought janitoring was all contracted out these days.
  - tpush 3y ago
    But the fortune 500 company can offer more for its CEO. It just has to pay its janitor more. Which it totally can, being a fortune 500 company.
  - skyyler 3y ago
    If they can afford to pay the CEO 100M they can afford to pay above market rate to the janitors, no? Do you have arguments or are you just going to call someone a “doo-doo head”?
    - HDThoreaun 3y ago
      Business's exist to make money, not give it away.
      - skyyler 3y ago
        Fascinating. So why are we entertaining 100M salaries? That sounds like giving away money.
        HDThoreaun 3y ago
        The board of directors believes the CEO adds more shareholder value than they cost.
        skyyler 3y ago
        That's so fascinating. The janitors don't?
        HDThoreaun 3y ago
        They certainly dont add $100 million of value. Probably add at least as much as they're paid but that's not saying much
        skyyler 3y ago
        How do you come to that conclusion? The cleanliness of an office space is a gigantic force multiplier for productivity. I wouldn't be surprised if janitors had a bigger impact.
- syndicatedjelly 3y ago
  I guarantee you California will find a way to legislate this view into existence within the next year, with horrendous results.
nerdponx 3y ago
> The answer for how much CEOs should be paid is the amount of money you would need to pay to employ the most optimal person to run the company. "Should" by what standard? Minimizing deadweight loss?
tysam_and 3y ago
And hence median vs minimum, median scales well, but minimum is more aggressively equitable -- after all, it's a nice 'soft scaling lock', which we currently seem to struggle with. If we can hit a nice logarithmic return on investment for company size, I think that would be nice. Like many things, perhaps impossible to easily achieve, but it's a nice thought in idea at least methinks <3 :'))))
nateburke 3y ago
> There’s a job market for C-Suite employees And it can sometimes be VERY illiquid. Headhunters help to provide this liquidity and get paid for it. Sometimes C-suite career people can go years without a job. Not every CEO or CFO makes fortune 500 comp and many people falsely assume low compensation volatility as e.g. a "career CFO". It can be extremely stressful, especially with family/dependents.
- amrocha 3y ago
  No. There is no financial stress in a CEOs life. The CEO that can't afford private yacht lessons for their daughter is not the same as the single mom working 2 jobs to feed her children. Stop drawing a false equivalency.
  - deleted 3y ago
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  - syndicatedjelly 3y ago
    Total straw man
    - amrocha 3y ago
      No. Financial stress comes from not being able to meet your basic needs. Everything after that is a choice, and choices are reversible.
  - acdha 3y ago
    I agree but would phrase it differently: C-level stress is often self-created – gotta have a bigger mansion, longer yacht, hotter trophy wife, etc. than my frat buddies - whereas many of their employees’ stress is externally-driven - hoping the car doesn’t break and cost you a job, worrying that the cost and time of a return to office mandate will take a big chunk of what’s left of your margin after inflation, etc. I think of that whenever I’m back in San Diego and remember the tree poisoning lawsuit where these two rich guys were feuding because the one whose mansion was in front had a tree which kept growing and the other guy thought that was depriving him of a fractional sea view. This ended with the twist that he paid his gardener to poison the tree, but was caught and … I just couldn’t get past thinking about how this guy was a millionaire, living on the cliffs over one of the world’s better ocean views, and all he could do was think that it wasn’t a degree wider.
deleted 3y ago
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by cj 3y ago

skyyler 3y ago

Well that's simple, larger companies that want to pay their CEO more can pay their lowest paid employees more.

deleted 3y ago
[deleted]
burnerburnson 3y ago
That's moronic. A good CEO at a fortune 500 company could have a $100M revenue impact. That same CEO could never be worth $100M to a local restaurant. The idea that the bigger company can't offer more to attract a better CEO just because both businesses employ janitors that make market rate is mind-numbingly stupid.
- tbrownaw 3y ago
  I thought janitoring was all contracted out these days.
- tpush 3y ago
  But the fortune 500 company can offer more for its CEO. It just has to pay its janitor more. Which it totally can, being a fortune 500 company.
- skyyler 3y ago
  If they can afford to pay the CEO 100M they can afford to pay above market rate to the janitors, no? Do you have arguments or are you just going to call someone a “doo-doo head”?
  - HDThoreaun 3y ago
    Business's exist to make money, not give it away.
    - skyyler 3y ago
      Fascinating. So why are we entertaining 100M salaries? That sounds like giving away money.
      - HDThoreaun 3y ago
        The board of directors believes the CEO adds more shareholder value than they cost.
        skyyler 3y ago
        That's so fascinating. The janitors don't?
        HDThoreaun 3y ago
        They certainly dont add $100 million of value. Probably add at least as much as they're paid but that's not saying much
        skyyler 3y ago
        How do you come to that conclusion? The cleanliness of an office space is a gigantic force multiplier for productivity. I wouldn't be surprised if janitors had a bigger impact.
syndicatedjelly 3y ago
I guarantee you California will find a way to legislate this view into existence within the next year, with horrendous results.

nerdponx 3y ago

> The answer for how much CEOs should be paid is the amount of money you would need to pay to employ the most optimal person to run the company. "Should" by what standard? Minimizing deadweight loss?

tysam_and 3y ago

And hence median vs minimum, median scales well, but minimum is more aggressively equitable -- after all, it's a nice 'soft scaling lock', which we currently seem to struggle with. If we can hit a nice logarithmic return on investment for company size, I think that would be nice. Like many things, perhaps impossible to easily achieve, but it's a nice thought in idea at least methinks <3 :'))))

nateburke 3y ago

> There’s a job market for C-Suite employees And it can sometimes be VERY illiquid. Headhunters help to provide this liquidity and get paid for it. Sometimes C-suite career people can go years without a job. Not every CEO or CFO makes fortune 500 comp and many people falsely assume low compensation volatility as e.g. a "career CFO". It can be extremely stressful, especially with family/dependents.

amrocha 3y ago
No. There is no financial stress in a CEOs life. The CEO that can't afford private yacht lessons for their daughter is not the same as the single mom working 2 jobs to feed her children. Stop drawing a false equivalency.
- deleted 3y ago
  [deleted]
- syndicatedjelly 3y ago
  Total straw man
  - amrocha 3y ago
    No. Financial stress comes from not being able to meet your basic needs. Everything after that is a choice, and choices are reversible.
- acdha 3y ago
  I agree but would phrase it differently: C-level stress is often self-created – gotta have a bigger mansion, longer yacht, hotter trophy wife, etc. than my frat buddies - whereas many of their employees’ stress is externally-driven - hoping the car doesn’t break and cost you a job, worrying that the cost and time of a return to office mandate will take a big chunk of what’s left of your margin after inflation, etc. I think of that whenever I’m back in San Diego and remember the tree poisoning lawsuit where these two rich guys were feuding because the one whose mansion was in front had a tree which kept growing and the other guy thought that was depriving him of a fractional sea view. This ended with the twist that he paid his gardener to poison the tree, but was caught and … I just couldn’t get past thinking about how this guy was a millionaire, living on the cliffs over one of the world’s better ocean views, and all he could do was think that it wasn’t a degree wider.

deleted 3y ago

[deleted]