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Aetna CEO Set to Reap About $500M If CVS Deal Closes
41–50 of 160 posts
Re: Aetna CEO Set to Reap About $500M If CVS Deal Closes
#42Earlier quoted context omitted.
Yes it does. Aetna employees almost 50,000 people. Aetna owes some success to their CEO. They owe most of their success to their employees.
I'm all for taxing the rich and compensating workers fairly. But: - Had the company declined, the CEO would have gotten all the blame and been crucified. Can't give blame if you can't also give credit. - The CEO negotiated this deal, the employees did not. - A good portion of this $500M is from the value of his stock, which is part of his compensation. I don't know the percentage of this payout that comes from stock…
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Re: Aetna CEO Set to Reap About $500M If CVS Deal Closes
#43Oligarchy at its best: Aetna/CVS workers mostly making minimum wage and doing all the work while the CEOs earning insane paychecks. Would this guy really be worse off if he only made 50M and the other 450M would go to the employees?
Do you really think the employees making minimum wage are doing "all the work?" If that's true, this guy did literally nothing. Which I doubt. Anyway, it seems like he's done a decent job of trying to spread the wealth around (no idea if the claims are true, of course). FTA:
"He is one of the highest-profile leaders in managed care, known partly for sharing his personal health-care experiences after a severe ski accident years ago, and he is well-regarded by investors. He drew attention outside the industry for boosting the incomes of Aetna’s lowest-paid workers by as much as one-third a few years ago; he asked Aetna executives at the time to read economist Thomas Piketty’s book on wealth inequality."
Re: Aetna CEO Set to Reap About $500M If CVS Deal Closes
#44Earlier quoted context omitted.
Yes it does. Aetna employees almost 50,000 people. Aetna owes some success to their CEO. They owe most of their success to their employees.
Say I start building a house. I realize I can't do it all by myself, so I get other people to do all the labor involved in building it. All the while providing all the details, instructions, and architectural guidelines to get a good finished product. Not to mention sourcing the materials required, getting the plans approved by the city, and making sure that on-sight construction passes inspection by the city. Who "o…
Comparisons like this inevitably break down at some point. I'm not at all convinced that the Aetna CEO does whatever the equivalent of sourcing materials does in their business. Architectural guidelines? Sure. "All details"? Almost definitely not.
Even taking your example at face value, I don't agree with it. The house wouldn't exist without either labourers or the planner. They are both vital. But in the Aetna situation, only one is rewarded.
Re: Aetna CEO Set to Reap About $500M If CVS Deal Closes
#45Well, he led the company while its value went from $10 billion to $69 billion in 7 years. Doesn't seem ridiculous.
Wow, $500 million bonus sounded ridiculous. But under the context that the company valuation went up by ~$59 billion, it doesn't sound too crazy at all.$500k bonus for increasing the value of company by ~50mil is stuff I've heard of before. But brain refused to compute it in terms of millions.
Can't say if he deserves it or not the the initial shock is definitely blunted in the context.
Re: Aetna CEO Set to Reap About $500M If CVS Deal Closes
#46Earlier quoted context omitted.
Say I start building a house. I realize I can't do it all by myself, so I get other people to do all the labor involved in building it. All the while providing all the details, instructions, and architectural guidelines to get a good finished product. Not to mention sourcing the materials required, getting the plans approved by the city, and making sure that on-sight construction passes inspection by the city. Who "o…
Aetna's CEO is an employee of Aetna. So in your tale he's part of the labor, not the person who wants a house built.
Typically high level executives are required to buy a certain number of shares in the company. That's not including the options earned, but actual shares they have to buy. Now yes, much of the time, the shares they have to buy are options they have to exercise, but in the end, the stakeholders always want to see the decision makers have skin in the game.
So yes, the CEO is an owner as well.
Re: Aetna CEO Set to Reap About $500M If CVS Deal Closes
#47These are just sort of nitpicky comments, but I think in this case they matter:
* most of this is due to appreciation of stock appreciation rights (an instrument similar to a stock option) he already owns that is already vested ($230M)
* $190M is from common stock he currently owns
* he gets $60-85M as part of a change of control package, which is triggered if he is fired after CVS takes over. this is a standard clause in most contracts
* overall, his package is worth so much because his equity became more valuable over the course of his tenure. any employees who got options at the same time as he did would benefit from most of this as well
so these gains did not come from profits, rather appreciation in the equity of the company during his tenure. it would be hypocritical to praise startup founders from reaping capital gains while admonishing this ceo
edit: formatting
Re: Aetna CEO Set to Reap About $500M If CVS Deal Closes
#48I know it's foolish to compare myself to the top 0.01%, but every year it seems like I fall further behind.
Athletes used to make tens of millions of dollars. Nowadays some retire with over a billion dollars of lifetime earnings.
CEOs used to make what? It was common to hear 20-25MM a year, today that number seems ridiculously low.
I know staff on professional sports teams, low men on the totem pole, who make quarter million dollar bonuses.
I realize these are one off examples that aren't common, but they make the gap seem so large.
Re: Aetna CEO Set to Reap About $500M If CVS Deal Closes
#49Well, he led the company while its value went from $10 billion to $69 billion in 7 years. Doesn't seem ridiculous.
Yes it does. Aetna employees almost 50,000 people. Aetna owes some success to their CEO. They owe most of their success to their employees.
I respectfully disagree with the way you are positioning this.
The relative impact of a CEO, whose job is to set strategic direction and direct human (tens of thousands of employees) and financial capital (billions of dollars) at scale, dwarfs that of any of its individual employees and the vast swath of them combined.
Most relevant to you, the majority of the benefit of this 7x increase in value in 7 years is actually accruing to the the shareholders, not the CEO. And guess who are the top shareholders of Aetna?
#1 Blackrock #2 Capital World Investors #3 Vanguard #4 T Rowe #5 State Street Source: https://whalewisdom.com/stock/aet
All of these above are money managers of "the people's" 401k's and retirements funds. So you can rest assured that the majority of the benefit is going to the people for whom Aetna owes its success.
Re: Aetna CEO Set to Reap About $500M If CVS Deal Closes
#50Whatever your politics that $500 million comes from profit in healthcare. Aetna has an economic incentive to denvy as much care as they can. That $500 million to one person is part of the overall cost of healthcare in the U.S. Is this really money well spent on healthcare?
More importantly, that 500M was money siphoned away from healing people. This is a share of the reward in not healing the sick.
Not necessarily... If we pretend the $500m is "profit", that $500m could have been created by Aetna offering better preventative care or it could have been created by letting people die in the name of corporate greed.
Aetna's valuation has grown out of the passage of the ACA. I find it unlikely that the second is true. The first certainly has happened but its unlikely that it accounts for all of the profit.
I put profit in quotes because the $500m is a bonus from the sale of the company, not an "income - expenses" profit.