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It’s interesting to me this doesn’t self correct. I’d love to know if someone can explain why. E.g. presumably companies can pay people more if they capture le

by tyleo 1y ago

It’s interesting to me this doesn’t self correct. I’d love to know if someone can explain why. E.g. presumably companies can pay people more if they capture less value themselves. Why can’t a company do that and just hire the best talent?

nitwit005 1y ago
If you want a fun exercise, try to estimate how many more Chipotle stores they could open if they didn't have to pay their executive salaries.
bluefirebrand 1y ago
Shareholders won't let them, basically
FollowingTheDao 1y ago
[flagged]
- JumpCrisscross 1y ago
  > self corrects with pitchforks. Does no one read history anymore? The elites after the French Revolution were not only mostly the same as before, they escaped with so much money and wealth that it’s actually debated if they increased their wealth share through the chaos [1]. Like, in the country today, which wealth constituency is most pushing for overthrowing our republic? [1] https://www.jstor.org/stable/650023 https://www.jstor.org/stable/650023
  - JKCalhoun 1y ago
    And a few of them, of course, lost their heads.
    - JumpCrisscross 1y ago
      > a few of them, of course, lost their heads A few of them were always losing their heads. That is the nature of violent elite competition.
- Aurornis 1y ago
  I don’t believe they do, because people tend to do rather poorly in the years following these revolutions. They only appeal to people who fantasize about their own outcomes rather than interpreting from history.
  - WalterBright 1y ago
    The usual arc is a reign of terror after the revolution.
thrance 1y ago
[flagged]
- WalterBright 1y ago
  > no one cares about the long-term anymore. Every shareholder does, because you cannot make a quick buck off of a stock if the other shareholders are looking for the quick buck as well.
  - thrance 1y ago
    You just have to not be among the last suckers to be left to hold the ball.
    - WalterBright 1y ago
      If there's even a hint that a company is sacrificing the long term for the short term, the stockholders will run for the exits. Share prices can tank before anyone is able to make a trade. This is why professional investors spend awful lots of money on research into the companies they invest in. They're not stupid.
      - thrance 1y ago
        Stock buybacks is sacrificing the long term. It's artificially inflating the stock price with money that should have been used to grow the company. And speculators don't care about any of that while the line is going up. They're not stupid, they just don't care about the actual health of the company, since today it is almost completely decorellated from its share price. Look at Tesla and tell me why the investors have not yet fleed the scene, in light of the disastrous signals that keep popping up. Because it doesn't matter to speculators.
        WalterBright 1y ago
        > It's artificially inflating the stock price with money that should have been used to grow the company. Stock buybacks (and dividends issued) are done when the company does not have a better use for the money. Are you also opposed to dividends?
fakedang 1y ago
Because the "talent" in this case is a commodity. Most of the low-wage corporation's employees tend to be front-of-house customer facing staff or brown-collar labor, which in most cases does not require any special skill set, nor rewards exceptional talent in most companies. Jobs that are easily replaceable and does not require a degree holder. Ironically, one of the few places I've seen that actually rewards employees for going above and beyond regularly is Walmart. Entry-level staff who can rise through the ranks with exceptional work can turn from low-wage line workers to store managers who are often paid close to $250k.
- 01HNNWZ0MV43FF 1y ago
  Brown collar? All I found for that is military https://en.wikipedia.org/wiki/Designation_of_workers_by_collar_color#Other_classifications https://en.wikipedia.org/wiki/Designation_of_workers_by_coll...
  - fakedang 1y ago
    Ahh, perhaps I was taught wrong. We used to be taught where I'm from that brown-collar meant dirty industries (including black-collar jobs in the above list such as oil-drilling, etc) and agriculture, while blue collar meant a step more technical but still did not require a college education (home technicians, factory jobs, delivery personnel, etc.).
Fade_Dance 1y ago
In business sectors where talent matters, the reverse process absolutely does take place, and it is a positive flywheel. Ex: take US tech. Stock issuance (as opposed to buybacks) is used as incentive to attract talent, which then drives growth and valuation, which makes the company more attractive for talent, in a reflexive cycle. But many businesses are just optimizing for lowest labor cost when it comes to their main workforce. That's where you see the arguably exploitive situation above.
qq66 1y ago
Talent quality doesn’t really matter outside of the bottom 20% and the top 5%
WalterBright 1y ago
Maybe this is the self correction. Consider the various CEOs of Apple. Some drove it to near bankruptcy, Jobs drove it to the richest company in the world. Same company, same employees. The only difference was leadership. Consider also what happened to MSFT when Nadella took over. Same company, same employees, dramatically different results. As a shareholder of Microsoft and Apple, I am happy with their CEO compensation. They earned it. And after all, CEO compensation comes out of the pockets of the shareholders, not the pockets of the employees.
- biimugan 1y ago
  > The only difference was leadership. That's quite the leap though, and is just confusing correlation and causation. Maybe the previous leadership was simply getting in the way of the engineers and managers that had the good ideas. And the new leadership was more hands-off, or focused in other areas like marketing. Or those cases are just flukes. For every case like the ones you cite, I could find two where the exact opposite happened. If you're downing a shot of vodka every morning, and suddenly stop, then yeah, your health is going to improve. In my opinion, many (if not most) of these CEOs are business-focused people with no technical (or even non-technical) knowledge of anything they purport to manage. And on the whole, they really don't affect the value of the company one way or the other.
  - WalterBright 1y ago
    Jobs created 3 fortunes. One you could attribute to luck. Two is getting hard to say any schmuck could have done that. 3 means Jobs was a unicorn.
    - biimugan 1y ago
      I'm not saying any schmuck could have done that. I'm saying that the engineers and managers at Apple (to use your example) are just as (if not more) responsible for the success than Jobs. Those lower-level engineers and managers also explain the repeated successes. And that, I would say, is the case in most market successes. The CEO is not remotely deserving of all the credit, or even most of the credit, in most situations. They don't really deserve to be paid what they're paid. There's this certain anti-historical proclivity to create heroes for worship. Because it's a simple story to tell and it gives you the opportunity to put yourself in the hero's shoes. But the simple story is almost always wrong.

by tyleo 1y ago

nitwit005 1y ago

If you want a fun exercise, try to estimate how many more Chipotle stores they could open if they didn't have to pay their executive salaries.

bluefirebrand 1y ago

Shareholders won't let them, basically

FollowingTheDao 1y ago

[flagged]

JumpCrisscross 1y ago
> self corrects with pitchforks. Does no one read history anymore? The elites after the French Revolution were not only mostly the same as before, they escaped with so much money and wealth that it’s actually debated if they increased their wealth share through the chaos [1]. Like, in the country today, which wealth constituency is most pushing for overthrowing our republic? [1] https://www.jstor.org/stable/650023 https://www.jstor.org/stable/650023
- JKCalhoun 1y ago
  And a few of them, of course, lost their heads.
  - JumpCrisscross 1y ago
    > a few of them, of course, lost their heads A few of them were always losing their heads. That is the nature of violent elite competition.
Aurornis 1y ago
I don’t believe they do, because people tend to do rather poorly in the years following these revolutions. They only appeal to people who fantasize about their own outcomes rather than interpreting from history.
- WalterBright 1y ago
  The usual arc is a reign of terror after the revolution.

thrance 1y ago

[flagged]

WalterBright 1y ago
> no one cares about the long-term anymore. Every shareholder does, because you cannot make a quick buck off of a stock if the other shareholders are looking for the quick buck as well.
- thrance 1y ago
  You just have to not be among the last suckers to be left to hold the ball.
  - WalterBright 1y ago
    If there's even a hint that a company is sacrificing the long term for the short term, the stockholders will run for the exits. Share prices can tank before anyone is able to make a trade. This is why professional investors spend awful lots of money on research into the companies they invest in. They're not stupid.
    - thrance 1y ago
      Stock buybacks is sacrificing the long term. It's artificially inflating the stock price with money that should have been used to grow the company. And speculators don't care about any of that while the line is going up. They're not stupid, they just don't care about the actual health of the company, since today it is almost completely decorellated from its share price. Look at Tesla and tell me why the investors have not yet fleed the scene, in light of the disastrous signals that keep popping up. Because it doesn't matter to speculators.
      - WalterBright 1y ago
        > It's artificially inflating the stock price with money that should have been used to grow the company. Stock buybacks (and dividends issued) are done when the company does not have a better use for the money. Are you also opposed to dividends?

fakedang 1y ago

Because the "talent" in this case is a commodity. Most of the low-wage corporation's employees tend to be front-of-house customer facing staff or brown-collar labor, which in most cases does not require any special skill set, nor rewards exceptional talent in most companies. Jobs that are easily replaceable and does not require a degree holder. Ironically, one of the few places I've seen that actually rewards employees for going above and beyond regularly is Walmart. Entry-level staff who can rise through the ranks with exceptional work can turn from low-wage line workers to store managers who are often paid close to $250k.

01HNNWZ0MV43FF 1y ago
Brown collar? All I found for that is military https://en.wikipedia.org/wiki/Designation_of_workers_by_collar_color#Other_classifications https://en.wikipedia.org/wiki/Designation_of_workers_by_coll...
- fakedang 1y ago
  Ahh, perhaps I was taught wrong. We used to be taught where I'm from that brown-collar meant dirty industries (including black-collar jobs in the above list such as oil-drilling, etc) and agriculture, while blue collar meant a step more technical but still did not require a college education (home technicians, factory jobs, delivery personnel, etc.).

Fade_Dance 1y ago

In business sectors where talent matters, the reverse process absolutely does take place, and it is a positive flywheel. Ex: take US tech. Stock issuance (as opposed to buybacks) is used as incentive to attract talent, which then drives growth and valuation, which makes the company more attractive for talent, in a reflexive cycle. But many businesses are just optimizing for lowest labor cost when it comes to their main workforce. That's where you see the arguably exploitive situation above.

qq66 1y ago

Talent quality doesn’t really matter outside of the bottom 20% and the top 5%

WalterBright 1y ago

Maybe this is the self correction. Consider the various CEOs of Apple. Some drove it to near bankruptcy, Jobs drove it to the richest company in the world. Same company, same employees. The only difference was leadership. Consider also what happened to MSFT when Nadella took over. Same company, same employees, dramatically different results. As a shareholder of Microsoft and Apple, I am happy with their CEO compensation. They earned it. And after all, CEO compensation comes out of the pockets of the shareholders, not the pockets of the employees.

biimugan 1y ago
> The only difference was leadership. That's quite the leap though, and is just confusing correlation and causation. Maybe the previous leadership was simply getting in the way of the engineers and managers that had the good ideas. And the new leadership was more hands-off, or focused in other areas like marketing. Or those cases are just flukes. For every case like the ones you cite, I could find two where the exact opposite happened. If you're downing a shot of vodka every morning, and suddenly stop, then yeah, your health is going to improve. In my opinion, many (if not most) of these CEOs are business-focused people with no technical (or even non-technical) knowledge of anything they purport to manage. And on the whole, they really don't affect the value of the company one way or the other.
- WalterBright 1y ago
  Jobs created 3 fortunes. One you could attribute to luck. Two is getting hard to say any schmuck could have done that. 3 means Jobs was a unicorn.
  - biimugan 1y ago
    I'm not saying any schmuck could have done that. I'm saying that the engineers and managers at Apple (to use your example) are just as (if not more) responsible for the success than Jobs. Those lower-level engineers and managers also explain the repeated successes. And that, I would say, is the case in most market successes. The CEO is not remotely deserving of all the credit, or even most of the credit, in most situations. They don't really deserve to be paid what they're paid. There's this certain anti-historical proclivity to create heroes for worship. Because it's a simple story to tell and it gives you the opportunity to put yourself in the hero's shoes. But the simple story is almost always wrong.