If my goal was to advocate to pay employees more, I would just advocate for increasing their pay. Why should it be restricted to 50% of executive bonuses? Seems unnecessarily complicated, unless the goal was to attract headlines or not affect the bottom line numbers.
Disney heir should give up her unearned wealth to the poor. The guy she's criticizing, that actually worked for his money, increased the value of Disney by many billions.
It's the Disney machine that really generates the windfall. Sure Iger steers the ship, keeps it from hitting the rocks, so it's worth compensating him highly. I just think some nuance is there.
Is there any books about ceos that came up with ingenious ideas to steer the company into profit that you would recommend? I’m interested in what a CEO does that makes his/her so many times more worth than your average man. Not being sarcastic just want to gain those skills.
I don't know either, but they seem to be Attorneys so they can navigate complex laws, or Engineers (Alan Mulally). They also seem to be well connected. What makes them compensated so highly is the large risk they manage, they are expected to meet shareholder demands. That said, some of it certainly feels excessive.
its interesting that they almost never have a large part of their salary connected to bonuses like salespeople do. They take risks for others and it’s an important job. But I do think it has more to do with culture.
IIRC, there was an article on HN a few months back about how she's given away tons and tons of money, more than anyone into her family. She seemed to be a good person in her interview, but I can't find the link.
I believe this is the thread/article in question. [0] (sorry for the low-content post, just recalled a fragment of the title and figured I could help.)
There were lots of white men who called for an end to slavery in the U.S. Should they have just shut up and not tried because they were "in a position of privilege?" Some things are just wrong, and it's probably a bad idea to call their critique out because of whatever other positions they may hold.
Just because someone is inherently wealthy doesn't mean their opinions on operations of a given company, that happens to carry their name, is wrong.
I don't get this outrage over the pay ratio. This seemingly outrageous ratio seems reasonable once you factor in the hard decisions that any CEO or top level executives have to make. Their one mistake can have very drastic effects on hundreds of thousands of employees.
When any company shuts down, the median employee is not blamed it is the CEOs and executives who are blamed.
Companies do not pay CEOs for the hours they work, they pay them to take critical decisions.
>Their one mistake can have very drastic effects on hundreds of thousands of employees.
When Papa John's founder said a bad word the sales dropped. Any executive could cause a similar reaction from the public. You want them to be paid well enough that they never cause such problems.
I'll happily take $100,000 a year not to say anything in public. I'm sure 99% of the world's population would. Sounds like a very easy job.
The rest of it? yeah, requires some technical knowledge, some interpersonal skills. But no less work or stress than say a line manager or a senior employee.
But you need to do both. It's also not only about what you say publicly, but about what others can hear you say. This means that even if it's a private conversation, but somebody might be recording it, then you'll have to be on your best behavior. This likely means that you'll have to be non-controversial with friends and family in private too. Just look at Brendan Eich and Mozilla. One $1000 donation ended it.
That's not exactly some horrific suffering. Spies, government workers, many people go through very similar things all the time. Not to mention any employee that holds trade secrets. In all jobs there's stuff you musn't say.
I think it could be argued that part of the reason CEOs get hammered as hard as they do when they screw up is expressly because they get paid so much. If the pay ratio was more akin to, for example, that of a Japanese company, I think there'd be less of an uproar whenever a screw-up occurs.
Everybody gets blamed when they make bad decisions. No different for the CEO.
Its hasn't been considered reasonable to earn 100's of thousands of times more than most people. That's kind of the definition of excess, and is used throughout history to illustrate societies gone haywire (despot kings, religious wealth in the presence of poverty etc).
There are literally thousands of people who would line up to make those critical decisions. They don't earn that much because of the market. CEOs earn that much because the folks at a company that can write checks, write them to each other.
That’s not how public companies work. CEO compensation is determined by the board and the board is elected by the shareholders. If a CEO makes a lot of money, it’s because the owners of the company think it’s worth the money.
I work in finance and your buddy buddy old boys club isn’t true. Shareholders want as much money as possible and the relationship between them and management is often antagonist: many a CEO are laid out to dry every year by investors.
As such, there’s only one reason why Bob Iger gets paid so much: because he’s generated tremendous value for shareholders over the years and the shareholders want to incentize him to keep generated value.
Yet in the last couple decades we've seen this jump up an order of magnitude. Don't think those board members aren't writing checks to one another, in that company or a different one.
Generating value for the shareholders is a job, and can pay like any other job. The reasons compensation for that has jumped up an order of magnitude has more to do with tulips.
When's the last time a CEO was "laid out to dry" by investors? Are there really enough activist investors to do that? Most people just sell their shares if they aren't happy with results.
Not sure about everyone else, but for me it's the asymmetry involved.
CEOs (and many other execs) don't have a lot of downside. They usually have a contract which guarantees their pay (short of malfeasance), and they tend to get big bonuses.
Upon mergers, some do get cut, but often with golden parachutes. The working stiff gets laid off, and if you're, say, a machinist in Cleveland, good luck finding a decent job again. If you're an exec, you do a quick stint in consulting to land on your feet.
Executive decisions are not hard or stressful enough to justify that pay. It may be tough to lay people off, but it's a hell of a lot more stressful to be laid-off. Generals, Colonels, Majors, and Captains send people into harms way (literally into gunfire), which is way tougher than anything a CEO will ever do, yet they aren't paid for their "hard decisions".
Can a good CEO make a huge difference to a company? Absolutely! But the asymmetry is also that a bad CEO doesn't experience a similar downside (being fired after you've made ten million dollars is not a hardship!).
Sounds like the rhetoric of someone who has never had to live paycheck to paycheck. People at the bottom of the economy take risks daily that people at the top couldn’t even imagine.
"seems reasonable once you factor in the hard decisions that any CEO or top level executives have to make"
Maybe if C level executives / board members faced the same sort of consequences for their poor decisions but that doesn't happen as often as it should. Leadership should face the brunt of the cost for their poor decisions instead of letting others take the hit for them.
Prior to the 1970's, no executive made more than 50-100X what the lowest paid employee made, let alone over 1000X the average pay within a company. Also, when a company shuts down, the C-level people are often paid out hansomly while the rank and file employees get nothing.
Just like I don't think anyone should be taxed at above 50% of their income, I also don't think anyone within a single company structure should make more than 100X anyone else. I don't think that companies should be forced to do so, but there's absolutely NOTHING wrong with shaming those that do.
But it’s the CEOs who get the golden parachute. I don’t hear anyone here saying “I would prefer to have a mediocre wage because I am so afraid of being blamed for my mistakes”.
33 comments
[ 1.3 ms ] story [ 74.3 ms ] threadThat's probably the one.
[0]https://news.ycombinator.com/item?id=19524325
Just because someone is inherently wealthy doesn't mean their opinions on operations of a given company, that happens to carry their name, is wrong.
When any company shuts down, the median employee is not blamed it is the CEOs and executives who are blamed.
Companies do not pay CEOs for the hours they work, they pay them to take critical decisions.
When Papa John's founder said a bad word the sales dropped. Any executive could cause a similar reaction from the public. You want them to be paid well enough that they never cause such problems.
The rest of it? yeah, requires some technical knowledge, some interpersonal skills. But no less work or stress than say a line manager or a senior employee.
Its hasn't been considered reasonable to earn 100's of thousands of times more than most people. That's kind of the definition of excess, and is used throughout history to illustrate societies gone haywire (despot kings, religious wealth in the presence of poverty etc).
There are literally thousands of people who would line up to make those critical decisions. They don't earn that much because of the market. CEOs earn that much because the folks at a company that can write checks, write them to each other.
I work in finance and your buddy buddy old boys club isn’t true. Shareholders want as much money as possible and the relationship between them and management is often antagonist: many a CEO are laid out to dry every year by investors.
As such, there’s only one reason why Bob Iger gets paid so much: because he’s generated tremendous value for shareholders over the years and the shareholders want to incentize him to keep generated value.
Generating value for the shareholders is a job, and can pay like any other job. The reasons compensation for that has jumped up an order of magnitude has more to do with tulips.
CEOs (and many other execs) don't have a lot of downside. They usually have a contract which guarantees their pay (short of malfeasance), and they tend to get big bonuses.
Upon mergers, some do get cut, but often with golden parachutes. The working stiff gets laid off, and if you're, say, a machinist in Cleveland, good luck finding a decent job again. If you're an exec, you do a quick stint in consulting to land on your feet.
Executive decisions are not hard or stressful enough to justify that pay. It may be tough to lay people off, but it's a hell of a lot more stressful to be laid-off. Generals, Colonels, Majors, and Captains send people into harms way (literally into gunfire), which is way tougher than anything a CEO will ever do, yet they aren't paid for their "hard decisions".
Can a good CEO make a huge difference to a company? Absolutely! But the asymmetry is also that a bad CEO doesn't experience a similar downside (being fired after you've made ten million dollars is not a hardship!).
Maybe if C level executives / board members faced the same sort of consequences for their poor decisions but that doesn't happen as often as it should. Leadership should face the brunt of the cost for their poor decisions instead of letting others take the hit for them.
Just like I don't think anyone should be taxed at above 50% of their income, I also don't think anyone within a single company structure should make more than 100X anyone else. I don't think that companies should be forced to do so, but there's absolutely NOTHING wrong with shaming those that do.
But it’s the CEOs who get the golden parachute. I don’t hear anyone here saying “I would prefer to have a mediocre wage because I am so afraid of being blamed for my mistakes”.