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> So the $98m per year compensation is a great bargain for Starbucks and all their shareholders. And their employees, too, actually, since they have something

by dvt 1y ago

> So the $98m per year compensation is a great bargain for Starbucks and all their shareholders. And their employees, too, actually, since they have something called the Bean Stock[1] program. But citing this wouldn't fit the article's narrative. Comparing salaries of a regular employee and a CEO (especially one of a public company) is like comparing apples to oranges; it has nothing to do with fairness. The two are fundamentally different in effort, incentive, and risk:reward structure. [1] https://www.starbucksbenefits.com/en-us/home/stock-savings/bean-stock/ https://www.starbucksbenefits.com/en-us/home/stock-savings/b...

buerkle 1y ago
Sorry but the risk:reward narrative is tiring. Many of these CEOs walk away with millions whether they succeed or fail, there's little to no risk for them. In fact, even they fail in cases they end finding another well paying executive position. Meanwhile, many of their employees are living paycheck to paycheck.
- wat10000 1y ago
  Even if he got fired and had his entire pay package clawed back somehow, Brian Niccol would still be fabulously wealthy. His risk is basically zero. There's something about the human mind that makes it feel worse for a rich person to lose insignificant-to-them millions than for a poor person to lose a thousand bucks.
  - ryandrake 1y ago
    People have trouble with orders of magnitude. A billionaire could lose 99% of his wealth, and still have $10M--set for life, never having to work again.
- dvt 1y ago
  I don't necessarily mean financial risk (though tbh, even the golden parachutes you cite are often a drop in the bucket compared to the market cap of these companies), but there's a lot of legal risk involved: think testifying to Congress, embroilments with the FTC/FCC, etc., dealing with a board of directors, navigating potential hostile takeovers or activist investors, etc. My point is that it's just a different ball game and being a CEO of a public company simply isn't the same thing as being an accountant that works 9-5. I personally have significantly more of a problem with Congress having no term limits and being able to trade on the very market they're regulating.
  - gitremote 1y ago
    Non-CEO employees like lawyers and corporate accountants have legal risks too and could be subpoenaed.
  - mattmanser 1y ago
    Where are these CEO convictions then? If there's this "risk"? And please don't cite deliberate fraudsters like Holmes or SBF. And what conviction length do those tiny few who get convicted of aomething actually get?
    - dvt 1y ago
      > Where are these CEO convictions then? Not sure if this is rhetorical, but there are Wiki entries, investigative articles, documentaries, and even entire books dedicated to corporate malpractice and its consequences over the past century.
      - cycomanic 1y ago
        But now you are talking about malpractice. I would argue a regular employee is just much exposed to legal risk. I would argue that their risk is actually higher, because they don't have a full office of corporate lawyers to defend them. Take the VW Diesel scandal, several engineers went to jail over this. In contrast Winterkorn has been charged, but AFAIK the case has been suspended and I'm not sure if it will ever go forward.
  - buerkle 1y ago
    I disagree with term limits. I'd prefer to see the number of representatives vastly increased (no increase since 1929) and gerrymandering removed. I do agree they should not trade on the market. I think you misunderstand the risk that non-CEO employees are exposed as cycomanic pointed out. CEOs that make this much money are more capable of defending themselves than a regular employee, not only from their wealth but from their network. It's rare that a CEO has to testify to Congress, or deal with FTC/FCC, etc. And dealing with BOD, hostile takeovers, or activist investors pales in comparison to what many people deal with day to day. A CEO is not going to go homeless from a hostile takeover.
- ThrowawayR2 1y ago
  > "Many of these CEOs walk away with millions whether they succeed or fail" Surgeons walk away with their pay whether a high-risk patient lives or dies, aside from provable malpractice. Why? Because they made a good faith effort to do their jobs despite an uncertain outcome.
  - danaris 1y ago
    I have never seen the high pay commanded by surgeons justified by the risk of the profession. Surgeons are paid highly because it is 1) a highly-skilled profession, requiring many years of schooling and practice to gain the medical knowledge necessary; 2) a stressful profession (related to risk, but not the same thing); and 3) highly in demand—due to both 1 and 2, not a lot of people choose to become surgeons, and AIUI, there's a fair amount of specialization within the surgical field, so you can't just swap in a heart surgeon to cut into someone's knee, for instance. Ridiculously high CEO pay is frequently justified by the supposed "risk" they take on, but experience doesn't back that up. Observation indicates that the primary factor that leads to high CEO pay is the incestuous relationships between company boards and the CEOs they pick—far too often, the CEO of company A will be on the boards of companies B and C, and vice versa, and they will just each support higher compensation for the others because they're all buddies.
danlitt 1y ago
> citing this wouldn't fit the article's narrative Did you do any research at all into whether this makes a material difference to starbucks employees?
- dvt 1y ago
  What do you mean by "material" difference? The stock literally went up 25%+, so of course every SBUX employee got to share in that rise. Or are you asking if it minted any new millionaires? Maybe a few, who knows.
  - danlitt 1y ago
    It is not hard to understand. Does it prevent them from having to use government welfare in order to survive on their meager salary?
wasabi991011 1y ago
Very quick and shoddy estimates: $100m per year / $400k employees = $250 per employee per year. Meanwhile, $ of stock per year is really hard to estimate, but one person online said ~$500 per year for a barista. A 25% increase in price due to a new CEO is then +$125.

by dvt 1y ago

buerkle 1y ago

Sorry but the risk:reward narrative is tiring. Many of these CEOs walk away with millions whether they succeed or fail, there's little to no risk for them. In fact, even they fail in cases they end finding another well paying executive position. Meanwhile, many of their employees are living paycheck to paycheck.

wat10000 1y ago
Even if he got fired and had his entire pay package clawed back somehow, Brian Niccol would still be fabulously wealthy. His risk is basically zero. There's something about the human mind that makes it feel worse for a rich person to lose insignificant-to-them millions than for a poor person to lose a thousand bucks.
- ryandrake 1y ago
  People have trouble with orders of magnitude. A billionaire could lose 99% of his wealth, and still have $10M--set for life, never having to work again.
dvt 1y ago
I don't necessarily mean financial risk (though tbh, even the golden parachutes you cite are often a drop in the bucket compared to the market cap of these companies), but there's a lot of legal risk involved: think testifying to Congress, embroilments with the FTC/FCC, etc., dealing with a board of directors, navigating potential hostile takeovers or activist investors, etc. My point is that it's just a different ball game and being a CEO of a public company simply isn't the same thing as being an accountant that works 9-5. I personally have significantly more of a problem with Congress having no term limits and being able to trade on the very market they're regulating.
- gitremote 1y ago
  Non-CEO employees like lawyers and corporate accountants have legal risks too and could be subpoenaed.
- mattmanser 1y ago
  Where are these CEO convictions then? If there's this "risk"? And please don't cite deliberate fraudsters like Holmes or SBF. And what conviction length do those tiny few who get convicted of aomething actually get?
  - dvt 1y ago
    > Where are these CEO convictions then? Not sure if this is rhetorical, but there are Wiki entries, investigative articles, documentaries, and even entire books dedicated to corporate malpractice and its consequences over the past century.
    - cycomanic 1y ago
      But now you are talking about malpractice. I would argue a regular employee is just much exposed to legal risk. I would argue that their risk is actually higher, because they don't have a full office of corporate lawyers to defend them. Take the VW Diesel scandal, several engineers went to jail over this. In contrast Winterkorn has been charged, but AFAIK the case has been suspended and I'm not sure if it will ever go forward.
- buerkle 1y ago
  I disagree with term limits. I'd prefer to see the number of representatives vastly increased (no increase since 1929) and gerrymandering removed. I do agree they should not trade on the market. I think you misunderstand the risk that non-CEO employees are exposed as cycomanic pointed out. CEOs that make this much money are more capable of defending themselves than a regular employee, not only from their wealth but from their network. It's rare that a CEO has to testify to Congress, or deal with FTC/FCC, etc. And dealing with BOD, hostile takeovers, or activist investors pales in comparison to what many people deal with day to day. A CEO is not going to go homeless from a hostile takeover.
ThrowawayR2 1y ago
> "Many of these CEOs walk away with millions whether they succeed or fail" Surgeons walk away with their pay whether a high-risk patient lives or dies, aside from provable malpractice. Why? Because they made a good faith effort to do their jobs despite an uncertain outcome.
- danaris 1y ago
  I have never seen the high pay commanded by surgeons justified by the risk of the profession. Surgeons are paid highly because it is 1) a highly-skilled profession, requiring many years of schooling and practice to gain the medical knowledge necessary; 2) a stressful profession (related to risk, but not the same thing); and 3) highly in demand—due to both 1 and 2, not a lot of people choose to become surgeons, and AIUI, there's a fair amount of specialization within the surgical field, so you can't just swap in a heart surgeon to cut into someone's knee, for instance. Ridiculously high CEO pay is frequently justified by the supposed "risk" they take on, but experience doesn't back that up. Observation indicates that the primary factor that leads to high CEO pay is the incestuous relationships between company boards and the CEOs they pick—far too often, the CEO of company A will be on the boards of companies B and C, and vice versa, and they will just each support higher compensation for the others because they're all buddies.

danlitt 1y ago

> citing this wouldn't fit the article's narrative Did you do any research at all into whether this makes a material difference to starbucks employees?

dvt 1y ago
What do you mean by "material" difference? The stock literally went up 25%+, so of course every SBUX employee got to share in that rise. Or are you asking if it minted any new millionaires? Maybe a few, who knows.
- danlitt 1y ago
  It is not hard to understand. Does it prevent them from having to use government welfare in order to survive on their meager salary?

wasabi991011 1y ago

Very quick and shoddy estimates: $100m per year / $400k employees = $250 per employee per year. Meanwhile, $ of stock per year is really hard to estimate, but one person online said ~$500 per year for a barista. A 25% increase in price due to a new CEO is then +$125.