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> Use the same framework to explain CEO pay. Sure. It's the same framework that explains the pay of Lebron James. The NBA became a massively popular global gam

> Use the same framework to explain CEO pay. Sure. It's the same framework that explains the pay of Lebron James. The NBA became a massively popular global game during the era of fast growth globalization, in which billions of consumers entered into the active global economy. Now you've got like 50 players earning $30m or more per year in the NBA. To play a game in just the US market. ~450 active players earning around $5 billion per year in just league salary (not counting endorsements). Now do it for global football, NFL football, Nascar, Major League Baseball, Hockey, F1, and so on. Who knows the insane total compensation figure. $30 billion? The economic force producing that comically massive figure, is the exact same reason Tim Cook is worth every dollar he's getting paid to operate the juggernaut that is Apple. The same goes for Nadella at Microsoft. The top 450 NBA players earn more in salary every year than the CEOs of the S&P 500. Why shouldn't a CEO get paid extraordinarily well, as well as an NBA all-star, for operating a $10 or $20 billion market cap corporation? Obviously they should. The only time I see arguments against high CEO pay (speaking generally), it's from people that know absolutely nothing about what a CEO does or how exceptionally difficult it is to operate a very big company. And should mediocre CEOs that fail or otherwise perform poorly get golden parachutes? No, of course not. Exceptional CEOs should get properly exceptional pay. They deserve to earn drastically more than the average worker. The common Redditor railing against CEO pay, looks at a Tim Cook and thinks they can maybe do what Cook does (he just sits in his chair in a big office while other people do all the work, dur dur dur), or what Nadella does, or a random S&P 500 CEO does. In reality they can barely do their own basic job, much less one ten tiers above them. The average Redditor is further away from being able to do Tim Cook's job than they are being able to do the job of Lebron James. The issue is the average person doesn't know anything about what a CEO does at all, they're entirely ignorant of it. However they can watch Lebron James play basketball and immediately understand they can't do anything like what James can do, because they get the physical visual display immediately, meanwhile they know zip about the job of a CEO at a big company. As usual the issue is extreme ignorance and mediocre education.

davorak 3y ago
> The only time I see arguments against high CEO pay (speaking generally), it's from people that know absolutely nothing about what a CEO does or how exceptionally difficult it is to operate a very big company. The most common argument I see is that the ceo pay has increased relative to the common or average employee salary. I doubt being a ceo has become that much more difficult over the same time period though.
- charcircuit 3y ago
  People are not paid based off difficulty.
  - davorak 3y ago
    I did not make the claim that it was. I was only responding to: > The only time I see arguments against high CEO pay (speaking generally), it's from people that know absolutely nothing about what a CEO does or how exceptionally difficult it is to operate a very big company. Which links ceo pay via complaints to "how exceptionally difficult" it is to do the job of a ceo. The implication is if people understood how hard the ceo job is that they would not complain about the pay. That implication does not make sense if there is no link between difficulty and pay.
- kolbe 3y ago
  > I doubt being a ceo has become that much more difficult over the same time period though. So what? The fact that you think this is an argument and not a meaningless talking point further supports the idea that you cannot even comprehend what a CEO does.
  - davorak 3y ago
    The comment I am responding to implied a link between difficulty to pay. What I quoted does not make sense otherwise. If you take that implication to be true and the difficulty of being a ceo has not change in portion to the wage change, which is my claim, then there has to be some other mechanism at play.(this is similar to what I said in my other comment[1]). The best response I can hope for to my comment is one that tries to explain the mechanism and whether or not it makes society more productive or not and maybe other associated costs if there are any. [1] https://news.ycombinator.com/item?id=37565350 https://news.ycombinator.com/item?id=37565350
ripvanwinkle 3y ago
One big difference is with a NBA team there are only about 9 - 11 other primary contributors, maybe some coaches and back office staff. At any large company there are tens of thousands pulling the boat (pick your metaphor), however the rest have limited bargaining power (without a union). CEOs sit on the board and are good friends with board members and often return the favor on other boards and networks. CEO wage negotiations have nothing in common with employee wage setting.
wudangmonk 3y ago
I can follow your logic for basketball players beause I know the players compete with each in grade school, middle school, high school etc.. until being recruited to play in the NBA. Does this mean that I have been missing the CEO tournaments? surely they must compete with one another after all how else can you compare who is better without a direct face off?. It seems like the big companies always get the best CEOs so they must have scouts all over the place on the lookout for that great undiscovered CEO talent. Or could it be that big companies always produce "great" CEO because its a lot harder to fail and a lot easier to win when you are stearing the biggest ships.
- hellojesus 3y ago
  CEO opportunities, especially the first, are very network heavy or "right place right time" heavy. Try contacting some headhunters. They may have leads.
pixelatedindex 3y ago
> And should mediocre CEOs that fail or otherwise perform poorly get golden parachutes? No, of course not. Oh but they do! That’s the rub. Also it’s very hand wavy to say “the CEO’s job is exceptionally difficult”. But that person has a whole bunch of people bringing him ideas and trying to improve the company. In fact, that’s how you even get promoted. So they pick a bunch of things to do. If it doesn’t go well and the stock tanks, the first person to leave are the workers and not the CEO. In fact, in almost every case the CEO is the last to get affected. Win or lose for the company, the CEOs only win.
iamdbtoo 3y ago
Lebron James is not the CEO of his team. In your analogy, he's a worker not a CEO. He was the vice president of the player's union. The NBA compensates workers based on the value they bring to the team. Isn't that what the UAW is arguing for?
- jacobr1 3y ago
  Sure, but the problem is that the UAW is likely wrong. Their work, relative to its substitutes is of lower value to the company on the margin. It is also why the NBA doesn't compensate, say the concessions workers millions, they can more easily be replaced. Likewise, the team's medical staff is payed much better both due to the alternatives they could find outside of the sport, and due to the relative difficulty in finding talent. The UAW has skilled workers, and they are compensated well in general. Perhaps they should earn, more or less, I'm not sure. But the relative value is exactly the point.
BlargMcLarg 3y ago
>And should mediocre CEOs that fail or otherwise perform poorly get golden parachutes? No, of course not So start there instead of making it seem like your few specific examples speak for the entire population of CEOs. Talk about the CEOs who fumbled completely during COVID despite having a great position, demanded benefits despite their huge reserves and are now crying about having to pay it back while their profits are up. Talk about the CEOs dumping their toxic waste straight into the rivers to avoid having to pay costs. And the CEOs who push for every trick in the book to pay a close to zero net tax. And the ones who will lobby and keep almost any potential upstart from ever becoming a threat. And those who have solidified themselves in their branch thanks to first mover advantage, and can do whatever they want and still succeed despite our 'competitive free market' (yeah right). >They deserve to earn drastically more than the average worker. They already did in absolute terms. Percentages compound. How about explaining why CEOs need an even bigger advantage in both absolute and relative terms than they had before? Did the workers not contribute to their success? And why are the workers the first to feel the headwind whereas the CEOs are the first to feel the tailwind?
FireBeyond 3y ago
> The top 450 NBA players... The top 450? There's only 450 players. 30 teams, 15 players on the roster. > earn more in salary every year than the CEOs of the S&P 500. No, they don't. There are 30 teams, with a salary cap of $136M, i.e. $4.08B. I'm looking at the top CEO salaries and I'm already at $2.6B and I'm only at number 20.
- kolbe 3y ago
  > I'm looking at the top CEO salaries and I'm already at $2.6B and I'm only at number 20. I appreciate how many of you immediately jump to make such egregiously bad displays of business logic in response to someone asserting that you cannot even comprehend the job of a top CEO.
  - FireBeyond 3y ago
    Acting like receiving some of your compensation in immediately exercisable stock grants being not technically a salary is a distinction that matters to none but the IRS. Yet somehow, bundling in endorsements and book deals and other extracurriculars when referring to NBA player salaries? Totally reasonable, apparently. "Steve Jobs only took a $1 salary from Apple!"
_hcuq 3y ago
The CEO's of the banks that went bankrupt in 2008 carried on "earning" 10´s of millions of dollars for years after they were bailed out by the government. Is that performance related pay? Or is it Crony Capitalism?

davorak 3y ago

> The only time I see arguments against high CEO pay (speaking generally), it's from people that know absolutely nothing about what a CEO does or how exceptionally difficult it is to operate a very big company. The most common argument I see is that the ceo pay has increased relative to the common or average employee salary. I doubt being a ceo has become that much more difficult over the same time period though.

charcircuit 3y ago
People are not paid based off difficulty.
- davorak 3y ago
  I did not make the claim that it was. I was only responding to: > The only time I see arguments against high CEO pay (speaking generally), it's from people that know absolutely nothing about what a CEO does or how exceptionally difficult it is to operate a very big company. Which links ceo pay via complaints to "how exceptionally difficult" it is to do the job of a ceo. The implication is if people understood how hard the ceo job is that they would not complain about the pay. That implication does not make sense if there is no link between difficulty and pay.
kolbe 3y ago
> I doubt being a ceo has become that much more difficult over the same time period though. So what? The fact that you think this is an argument and not a meaningless talking point further supports the idea that you cannot even comprehend what a CEO does.
- davorak 3y ago
  The comment I am responding to implied a link between difficulty to pay. What I quoted does not make sense otherwise. If you take that implication to be true and the difficulty of being a ceo has not change in portion to the wage change, which is my claim, then there has to be some other mechanism at play.(this is similar to what I said in my other comment[1]). The best response I can hope for to my comment is one that tries to explain the mechanism and whether or not it makes society more productive or not and maybe other associated costs if there are any. [1] https://news.ycombinator.com/item?id=37565350 https://news.ycombinator.com/item?id=37565350

ripvanwinkle 3y ago

One big difference is with a NBA team there are only about 9 - 11 other primary contributors, maybe some coaches and back office staff. At any large company there are tens of thousands pulling the boat (pick your metaphor), however the rest have limited bargaining power (without a union). CEOs sit on the board and are good friends with board members and often return the favor on other boards and networks. CEO wage negotiations have nothing in common with employee wage setting.

wudangmonk 3y ago

I can follow your logic for basketball players beause I know the players compete with each in grade school, middle school, high school etc.. until being recruited to play in the NBA. Does this mean that I have been missing the CEO tournaments? surely they must compete with one another after all how else can you compare who is better without a direct face off?. It seems like the big companies always get the best CEOs so they must have scouts all over the place on the lookout for that great undiscovered CEO talent. Or could it be that big companies always produce "great" CEO because its a lot harder to fail and a lot easier to win when you are stearing the biggest ships.

hellojesus 3y ago
CEO opportunities, especially the first, are very network heavy or "right place right time" heavy. Try contacting some headhunters. They may have leads.

pixelatedindex 3y ago

> And should mediocre CEOs that fail or otherwise perform poorly get golden parachutes? No, of course not. Oh but they do! That’s the rub. Also it’s very hand wavy to say “the CEO’s job is exceptionally difficult”. But that person has a whole bunch of people bringing him ideas and trying to improve the company. In fact, that’s how you even get promoted. So they pick a bunch of things to do. If it doesn’t go well and the stock tanks, the first person to leave are the workers and not the CEO. In fact, in almost every case the CEO is the last to get affected. Win or lose for the company, the CEOs only win.

iamdbtoo 3y ago

Lebron James is not the CEO of his team. In your analogy, he's a worker not a CEO. He was the vice president of the player's union. The NBA compensates workers based on the value they bring to the team. Isn't that what the UAW is arguing for?

jacobr1 3y ago
Sure, but the problem is that the UAW is likely wrong. Their work, relative to its substitutes is of lower value to the company on the margin. It is also why the NBA doesn't compensate, say the concessions workers millions, they can more easily be replaced. Likewise, the team's medical staff is payed much better both due to the alternatives they could find outside of the sport, and due to the relative difficulty in finding talent. The UAW has skilled workers, and they are compensated well in general. Perhaps they should earn, more or less, I'm not sure. But the relative value is exactly the point.

BlargMcLarg 3y ago

>And should mediocre CEOs that fail or otherwise perform poorly get golden parachutes? No, of course not So start there instead of making it seem like your few specific examples speak for the entire population of CEOs. Talk about the CEOs who fumbled completely during COVID despite having a great position, demanded benefits despite their huge reserves and are now crying about having to pay it back while their profits are up. Talk about the CEOs dumping their toxic waste straight into the rivers to avoid having to pay costs. And the CEOs who push for every trick in the book to pay a close to zero net tax. And the ones who will lobby and keep almost any potential upstart from ever becoming a threat. And those who have solidified themselves in their branch thanks to first mover advantage, and can do whatever they want and still succeed despite our 'competitive free market' (yeah right). >They deserve to earn drastically more than the average worker. They already did in absolute terms. Percentages compound. How about explaining why CEOs need an even bigger advantage in both absolute and relative terms than they had before? Did the workers not contribute to their success? And why are the workers the first to feel the headwind whereas the CEOs are the first to feel the tailwind?

FireBeyond 3y ago

> The top 450 NBA players... The top 450? There's only 450 players. 30 teams, 15 players on the roster. > earn more in salary every year than the CEOs of the S&P 500. No, they don't. There are 30 teams, with a salary cap of $136M, i.e. $4.08B. I'm looking at the top CEO salaries and I'm already at $2.6B and I'm only at number 20.

kolbe 3y ago
> I'm looking at the top CEO salaries and I'm already at $2.6B and I'm only at number 20. I appreciate how many of you immediately jump to make such egregiously bad displays of business logic in response to someone asserting that you cannot even comprehend the job of a top CEO.
- FireBeyond 3y ago
  Acting like receiving some of your compensation in immediately exercisable stock grants being not technically a salary is a distinction that matters to none but the IRS. Yet somehow, bundling in endorsements and book deals and other extracurriculars when referring to NBA player salaries? Totally reasonable, apparently. "Steve Jobs only took a $1 salary from Apple!"

_hcuq 3y ago

The CEO's of the banks that went bankrupt in 2008 carried on "earning" 10´s of millions of dollars for years after they were bailed out by the government. Is that performance related pay? Or is it Crony Capitalism?