We don't have any way of knowing if those businesses are making bad choices. Lots of people would happily take a job as CEO of Google for less than Sundar Pichai gets paid. That won't happen because Google wouldn't want to hire any of those people. But who's to say that they'd do a bad job if they were hired?
Your subjective interpretation of their decisions is irrelevant, their value is what the market is willing to bear, independent of your opinion. The market is composed of the aggregate opinions of all the businesses and the reality of the situation is that number is very high.
Are you saying that everyone who has a job is worth exactly what they’re currently paid? Or that everyone is worth what, in the limit, ‘the market’ would be willing to pay them?
The first statement is obviously nonsense. (No-one is over- or under-paid? Dennis Muilenburg was worth $4 million a year to Boeing?) The second statement might be true in theory, but as we can’t know what the market will be ‘willing to bear’ in the limit, it doesn’t tell us anything about whether or not Google is overspending on its CEO. Eventually, in a perfect market, people will be paid what they’re worth (if what they’re worth is defined circularly as what they’d be paid in a perfect market). However, ‘eventually’ can be a long time, and real markets are far from perfect.
As for subjectivity and value judgments, my point is that we don’t know if Google’s choice of CEO is optimal given what Google itself values as a company. My subjective judgments have nothing to do with it. I didn’t make any subjective judgments about anyone’s job performance in my comment.
I think you're focused on the theory and ignoring the hard facts. Theoretically, an employee might be getting N today, then they find a new job and get 2N tomorrow, so were they underpaid before, overpaid now, maybe both?
It's an interesting question in its own right, but it's a little irrelevant because the _definition_ of what they're worth is what somebody is willing to pay (assuming an efficient market, or at least something close to it).
So these observed pay rates are ground-truth data points. If there's a difference between that and what you think someone should make, the error is with the opinion, not with the actual pay.
You say that you are ‘assuming an efficient market, or at least something close to it’. So I’d suggest that it’s you who is focusing on the theory. I do not make that assumption as it is not close to reality.
> the _definition_ of what they're worth is what somebody is willing to pay
Even theoretically this can’t be the right definition because it means that no-one can be overpaid (as at least one person is willing to pay them what they’re currently getting). As I said above, you must mean something like ‘what the market as a whole would be willing to pay on average eventually in the limit’ – which is an unknowable quantity.
It’s entirely possible that Google and its shareholders might be happier and richer if they’d chosen one of the people who’d be willing to do the job of CEO for a tenth of the price. The market can’t test that hypothesis because Google hasn’t tried doing it. But if that hypothesis should happen to be true, it would be hard to argue that the current incumbent is worth what they pay him.
This point would be considered obvious in the boardroom if we were talking about less exalted persons than CEOs. Imagine if it turned out, for example, that recent coding bootcamp graduates performed just as well as experienced senior software engineers. (I don’t think this is actually true.) Then no-one would argue that the senior software engineers at Google were not overpaid merely because...Google was currently overpaying them.
Only CEOs would have the sheer cheek to use this ‘you pay me X so I must be worth X’ logic to explain why their pay shouldn’t be cut while continually wangling pay rises out of their boards. (Being overpaid is impossible in principle because the market can’t be wrong; and yet being underpaid strangely isn’t.)
"He didn't mention that during his time at the helm Google has been hit with billions of dollars' worth of antitrust fines, been left in the dust by OpenAI's ChatGPT despite "pivoting the company to be AI-first," and seen its core search product get steadily worse."
> I'd be more curious what makes someone think their jobs are worth that much.
Multiple strategy failures on core business elements would suggest the job being performed is not worth that much.
Fair, but at their scale it might be worth it. I'm not going to pretend I have the quasi-omnipotence necessary to understand if it was the right tradeoff in the end. For instance, Uber would have never became the company it did (regardless of its current position in the world) if they didn't routinely expose themselves to litigation.
> been left in the dust by OpenAI's ChatGPT
Very bold claim. They could absolutely do the same but perhaps they see no commercial value in doing so.
> seen its core search product get steadily worse
By what metric? It certainly generates more revenue per load than ever before and has page loads still trending upwards.
Honestly sounds like you have an axe to grind and you're making indefensible claims in a play to make your point.
Does anybody else think this overly-simple art-style of pastel colors and thick black lines seem very very _very_ childish? You see it in a lot of corporate branding, advertisements, etc.
Seems like it's designed to be as inoffensive and inclusive as possible, but it just comes off as childish.
Anyways - I can see that people at large would look at how these CEOs continue to make massive salaries/wages/etc. while the same people look at themselves and see how their paychecks are worth less, they can't afford the things they could afford before...
Thing is, if you do start taking profits from these CEOs directly, you're encouraging these companies even more to move their profits/assets off-shore, to lobby for more obtuse tax laws, etc.
Not sure what the answer is here. It really does seem like the rich keep getting richer while the middle class shrinks and the lower class grows...
> Does anybody else think this overly-simple art-style of pastel colors and thick black lines seem very very _very_ childish? You see it in a lot of corporate branding, advertisements, etc.
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[ 3.0 ms ] story [ 58.2 ms ] threadYour subjective interpretation of their decisions is irrelevant, their value is what the market is willing to bear, independent of your opinion. The market is composed of the aggregate opinions of all the businesses and the reality of the situation is that number is very high.
The first statement is obviously nonsense. (No-one is over- or under-paid? Dennis Muilenburg was worth $4 million a year to Boeing?) The second statement might be true in theory, but as we can’t know what the market will be ‘willing to bear’ in the limit, it doesn’t tell us anything about whether or not Google is overspending on its CEO. Eventually, in a perfect market, people will be paid what they’re worth (if what they’re worth is defined circularly as what they’d be paid in a perfect market). However, ‘eventually’ can be a long time, and real markets are far from perfect.
As for subjectivity and value judgments, my point is that we don’t know if Google’s choice of CEO is optimal given what Google itself values as a company. My subjective judgments have nothing to do with it. I didn’t make any subjective judgments about anyone’s job performance in my comment.
It's an interesting question in its own right, but it's a little irrelevant because the _definition_ of what they're worth is what somebody is willing to pay (assuming an efficient market, or at least something close to it).
So these observed pay rates are ground-truth data points. If there's a difference between that and what you think someone should make, the error is with the opinion, not with the actual pay.
> the _definition_ of what they're worth is what somebody is willing to pay
Even theoretically this can’t be the right definition because it means that no-one can be overpaid (as at least one person is willing to pay them what they’re currently getting). As I said above, you must mean something like ‘what the market as a whole would be willing to pay on average eventually in the limit’ – which is an unknowable quantity.
It’s entirely possible that Google and its shareholders might be happier and richer if they’d chosen one of the people who’d be willing to do the job of CEO for a tenth of the price. The market can’t test that hypothesis because Google hasn’t tried doing it. But if that hypothesis should happen to be true, it would be hard to argue that the current incumbent is worth what they pay him.
This point would be considered obvious in the boardroom if we were talking about less exalted persons than CEOs. Imagine if it turned out, for example, that recent coding bootcamp graduates performed just as well as experienced senior software engineers. (I don’t think this is actually true.) Then no-one would argue that the senior software engineers at Google were not overpaid merely because...Google was currently overpaying them.
Only CEOs would have the sheer cheek to use this ‘you pay me X so I must be worth X’ logic to explain why their pay shouldn’t be cut while continually wangling pay rises out of their boards. (Being overpaid is impossible in principle because the market can’t be wrong; and yet being underpaid strangely isn’t.)
> I'd be more curious what makes someone think their jobs are worth that much.
Multiple strategy failures on core business elements would suggest the job being performed is not worth that much.
Fair, but at their scale it might be worth it. I'm not going to pretend I have the quasi-omnipotence necessary to understand if it was the right tradeoff in the end. For instance, Uber would have never became the company it did (regardless of its current position in the world) if they didn't routinely expose themselves to litigation.
> been left in the dust by OpenAI's ChatGPT
Very bold claim. They could absolutely do the same but perhaps they see no commercial value in doing so.
> seen its core search product get steadily worse
By what metric? It certainly generates more revenue per load than ever before and has page loads still trending upwards.
Honestly sounds like you have an axe to grind and you're making indefensible claims in a play to make your point.
Seems like it's designed to be as inoffensive and inclusive as possible, but it just comes off as childish.
Anyways - I can see that people at large would look at how these CEOs continue to make massive salaries/wages/etc. while the same people look at themselves and see how their paychecks are worth less, they can't afford the things they could afford before...
Thing is, if you do start taking profits from these CEOs directly, you're encouraging these companies even more to move their profits/assets off-shore, to lobby for more obtuse tax laws, etc.
Not sure what the answer is here. It really does seem like the rich keep getting richer while the middle class shrinks and the lower class grows...
It's known as "Corporate Memphis".
https://en.m.wikipedia.org/wiki/Corporate_Memphis