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Aetna CEO Set to Reap About $500M If CVS Deal Closes

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Re: Aetna CEO Set to Reap About $500M If CVS Deal Closes

#71

Post by yequalsx »

maxerickson wrote: post #63
yequalsx wrote: post #9

Whatever 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?

Sort of. It's clearly stated that some of it is from growth in the value of stock that he has been compensated with, that value (the growth of the stock) isn't literal profit from healthcare, it's market pricing of the future ability of Aetna to profit on healthcare. And then there is some reason to consider how much delivered value the profit is associated with. If patients reaped similarly large amounts of value fr…

That's a fair point. But the value in stock comes from profit which comes from...

Re: Aetna CEO Set to Reap About $500M If CVS Deal Closes

#72

Post by southphillyman »

gxs wrote: post #48

I 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…

I use increasing athlete salary as an easy analogy to help ppl understand wealth disparity in this country. Micheal Jordan once made $4 million dollars in the prime of his career. Today Steph Curry can sign a $200 million deal in 2017 because that amount is nothing to his owner. Russell Westbrook signed a $200 million NBA extension to go with his $200 million sneaker endorsement this summer. Sounds crazy if you've been following sports. Their salaries aren't out of control though, it just seems that way because our wages are stagnant due to having none of the leverage athletes have via unions/skillset. Athlete salary has grown in proportion to the wealth they help generate, most of our salaries have not.

Re: Aetna CEO Set to Reap About $500M If CVS Deal Closes

#73

Post by yequalsx »

rukittenme wrote: post #67
ceejayoz wrote: post #25

Earlier quoted context omitted.

> Just like every insurance company? Yes, which is why insurance for something that's non-optional - health - is so sucky, and sucky enough that the rest of the developed world has decided to largely cut out the middleman.

This is wrong. Most countries still have the "middleman". The NHS is the only European system (that I know of) that is completely government operated. Germany, France, Switzerland all leverage private and public health insurance plans. Furthermore, we can look at our own country (the US) and see how the different European systems play out. The VA (NHS-like) is a poorly run mess. Medicare (like Switzerland) runs decen…

In France the health insurance companies are non-profit. I'm guessing that insurance CEOs in other countries don't get $500 million bonuses so I'm thinking there must be some sort of regulation controlling profit levels and pay.

Re: Aetna CEO Set to Reap About $500M If CVS Deal Closes

#75

Post by dx034 »

TrainedMonkey wrote: post #26
Kyragem wrote: post #15

Oligarchy 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?

$450m would work out to $900 per employee (assuming 50k employees), not bad for a bonus. edit: As commenters below pointed out correct number is $9,000 per employee, which would have made for a pretty awesome Christmas bonus. If we also include CVS employees (240k) the bonus drops to $1,552 which is still pretty good.

Think you meant 9,000 per employee in this case.

Re: Aetna CEO Set to Reap About $500M If CVS Deal Closes

#76

Post by pg314 »

Nrsolis wrote: post #57
bkanber wrote: post #36

Earlier quoted context omitted.

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…

Something I find curious is the degree to which HN seems to want to break out the torches and pitchforks when a CEO profits handsomely by increasing shareholder value. There doesn't seem to be the same animus towards ordinary developers becoming millionaires in a few short years by getting lucky and landing at the right unicorn startup pre-IPO. CEOs interests are aligned perfectly in this situation: increase sharehol…

> CEOs interests are aligned perfectly in this situation: increase shareholder value.

That is wrong. The CEO's risk is asymmetric. Huge upside with limited downside, which encourages reckless risk taking. It is also shorter term (until his grants vest), encouraging short term profit over long term value.

> I don't quite grok the idea that employees with no ownership stake in the company are somehow owed a share of the capital gain when they've got no capital of their own at risk.

Is the CEO not an employee? Why would he be owed a share of the capital gain, and other workers not?

Re: Aetna CEO Set to Reap About $500M If CVS Deal Closes

#77

Post by new-account-9 »

chasing wrote: post #23
dymk wrote: post #22

Earlier quoted context omitted.

Right, because those 50,000 employees were making the major directional decisions for the company, not the C level execs

Directional decisions aren't the only important decisions. And, yes: Non-C-level execs make directional decisions all the time. Especially in a company the size of Aetna.

If you get the big decisions correct, then your company can survive many incorrect small decisions.

If you get the big decisions incorrect, then your company will not survive even if all the small decisions are correct.

Re: Aetna CEO Set to Reap About $500M If CVS Deal Closes

#78

Post by stevenwoo »

gxs wrote: post #48

I 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…

I don't begrudge athletes high salaries - they are in the entertainment industry and they are part of the product, like actors/directors. It's only in the last few decades that they got close to their actual value due to collective bargaining or that they got (in some sports) the ability to move from team to team of their own free will. Most athletes don't end up ridiculously wealthy and in contact sports will have short careers, additionally boxers and football players with longish careers will have a much lower quality of life after retirement from sport due to TBI/injuries. The only problem I have with pro sports is the collegiate scam in the US where colleges reap all the benefits and student athletes can't earn money.

Re: Aetna CEO Set to Reap About $500M If CVS Deal Closes

#79

Post by gxs »

southphillyman wrote: post #72
gxs wrote: post #48

I 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…

I use increasing athlete salary as an easy analogy to help ppl understand wealth disparity in this country. Micheal Jordan once made $4 million dollars in the prime of his career. Today Steph Curry can sign a $200 million deal in 2017 because that amount is nothing to his owner. Russell Westbrook signed a $200 million NBA extension to go with his $200 million sneaker endorsement this summer. Sounds crazy if you've be…

Exactly - you articulated what I was trying to say better than I did.

Re: Aetna CEO Set to Reap About $500M If CVS Deal Closes

#80

Post by untog »

thevardanian wrote: post #59
untog wrote: post #44

Earlier quoted context omitted.

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 situa…

A CEO is responsible for the products that they make. In the case of any company really you have to deal with various professionals, the City, and laborers to make a product. I think it's fair to say that no single laborer, it seems, is as important in the process of production than the person making all the decisions to employ labor to some final product.

But the CEO doesn't make all the decisions. Like I said, the comparison doesn't really work. Aetna isn't one CEO and 50,000 labourers, it has an entire corporate chain of command.
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