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Right, but in general the CEO doesn’t really do much to the stock price. If the general market is up, it’s going up. If the market is down, it’s going down. Ho
by aaomidi 3y ago
Right, but in general the CEO doesn’t really do much to the stock price. If the general market is up, it’s going up. If the market is down, it’s going down.
How many companies really break that relationship in their market sector?
So tldr, ceo pay is based on the economic cycle rather than how the company does.
- borisjabes 3y agoSome public CEOs comp packages are defined by them exceeding $SPY so boards do expect more than just the economic cycle.
- somebodythere 3y ago50% of SPY constituents are going to beat SPY. That in itself doesn't imply the CEO is a meaningful factor in company performance.
- HDThoreaun 3y agoThis isn’t true because of the weighting. If apple doubles in value SPY will be up 8% from that alone. It’s easy to see a scenario where one massive company has an incredible year and every other company returns below the average.
- vkou 3y agoOr, alternatively, one massive company has a bad year, and everyone else comes out smelling like roses. On average, 50/50 is a pretty decent benchmark here.
- WalterBright 3y ago> but in general the CEO doesn’t really do much to the stock price Steve Jobs, Bill Gates, Elon Musk, Satya Nadella, etc. > ceo pay is based on the economic cycle rather than how the company does You can always start your own corporation, name yourself CEO (all you gotta do is file some paperwork and pay an annual fee) and rake in the dough for doing nothing!!
- Per_Bothner 3y agoThat is true. Elon Musk has greatly affected the stock price of the Company Formerly Known as Twitter.
- WalterBright 3y agoSince Musk took it private, the stock price is not known.
- astrange 3y agoIt has public shareholders like Fidelity, so they do report what they value it at. I don't remember what it is, but it's at least 1/3 marked down.
- ipaddr 3y agoThose are founders but this is an external hire at a later stage not really the same.
- astrange 3y agoThe story I linked is actually a cofounder.
- ummonk 3y agoNobody is complaining about founder pay. The complaint is about publicly traded companies being subjected to elite capture by parasitical execs.
- WalterBright 3y agoSatya Nadella is not a founder. But during his tenure the value of MSFT went up by 10x. I'd say he's well worth his compensation.