I wonder if there's a reasonable way to normalize the value of stock incentive packages, such that they only become worth outsized amounts if you actually outperform the other companies in your sector. That way, they can't just ride a bull market to a massive payday, and similarly, a bear market doesn't automatically destroy their compensation.
Aetna CEO Set to Reap About $500M If CVS Deal Closes
101–110 of 160 posts
Re: Aetna CEO Set to Reap About $500M If CVS Deal Closes
#102Earlier 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…
"- 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."
And he would have been given a golden parachute worth far more than most of us will see in our lifetimes. His family wouldn't go hungry or homeless. At the same time, many employees will get laid off, and their families will have a very real chance of going hungry or homeless.
Re: Aetna CEO Set to Reap About $500M If CVS Deal Closes
#103Earlier 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…
Then why not get rid of the rest of the employees and just hire a dozen like him since he is bringing all the value.
You need exactly 1 in the organization. No more, no less. Can you deduce why a collective or cluster hasn't replaced the role? I'd imagine the answer is blame, but I'd like to know what you think.
Re: Aetna CEO Set to Reap About $500M If CVS Deal Closes
#104These 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 clau…
> 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
Why do you think the equity went up in value? It’s because of profit driven - valuations and profitability usually go hand in hand. The difference between Aetna and most startups is the business of Aetna adds no value to the economy/society, it’s a value suck.
Re: Aetna CEO Set to Reap About $500M If CVS Deal Closes
#105Earlier quoted context omitted.
"I trust the president and the Republicans, as I take their word for it." That's a bad strategy for a citizen in a democracy. If you blindly believe a party or politician you can't make educated choices.
Nobody does blindly anything. We make choices, and that is my choice. I trust the Republicans in Congress, and I am happy with their legislative agenda. Let's respect each other choices, and not denigrate anyone for being politically blind. We all have brains, personalities, education, and we all deserve respect.
Did you do any reading about the budget? I haven't read the whole thing but it seems pretty obvious to me that main benefits will go to the highest incomes and corporations and only a small percentage to the middle class. Unless you define middle class as people with net worth in the millions.
Re: Aetna CEO Set to Reap About $500M If CVS Deal Closes
#106Earlier quoted context omitted.
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 pro…
This is from be ACA but I think it gives the general idea of the tactics insurance companies use:
https://health.usnews.com/health-news/articles/2008/08/25/ho...
Here's one from after ACA passed and was implemented:
https://www.cbsnews.com/news/mental-illness-health-care-insu...
The ACA attempted to make things more fair in terms of appealing denials and mandating certain coverages. It's not reasonable to believe that Aetna's profit comes from offer better preventative care. I'd need to see some evidence to believe that. Certainly before ACA health insurance companies let people die in the name of corporate greed. They have an economic incentive to deny care. Evidence of this is in the fact that the CEO is getting a $500 million bonus.
Yes the $500 million comes from stock price increase. But that comes from profit and the profit, at least partly, comes from denying care.
EDIT:
https://twitter.com/RoseAnnDeMoro/status/922627477553397761/...
It happens often enough that there is a market for lawyers to help out when insurance claims are denied.
https://scottglovsky.com/practice-areas/health-insurance-den...
Re: Aetna CEO Set to Reap About $500M If CVS Deal Closes
#107Earlier quoted context omitted.
Who gets to decide this? As I understand it, it's the board of directors that put together a compensation committee. It's not like they are spending your money. They're spending the shareholder's money. If only you owned stock in CVS or Aetna you'd be able to make your voice heard.
What's your point? You think I should keep my opinion to myself or something?
I don't understand the animus towards CEO pay. It can easily be applied to any major celebrity or athlete.
If anyone could do what they do, they'd be paid accordingly.
The market (via the shareholders) sets the rate of pay. Why the general public cares about one and not the other is beyond me.
Re: Aetna CEO Set to Reap About $500M If CVS Deal Closes
#108Earlier 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 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 actual…
> All of these above are money managers of "the people's" 401k's and retirements funds.
Numbers matter though. Most people don't own much capital and it's getting worse year by year. In other words, if I have a small 401k, I'd prefer the cheaper healthcare to a small bump in my meager savings (many don't have a 401k at all).
Re: Aetna CEO Set to Reap About $500M If CVS Deal Closes
#109These 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 clau…
> 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 Why do you think the equity went up in value? It’s because of profit driven - valuations and profitability usually go hand in hand. The difference between Aetna and most startups is the business of Aetn…
i disagree. point by point:
* from 2014-2016, aetna's revenue has increased by 9%, its net income by 10%, and its stock price by 82%. i didnt check all the way back to the beginning of the current ceo's tenure, but id imagine it is a similar trend. stock prices and profitability are not as well correlated as wed like to think
* why do you say aetna adds no economic value to society? i understand if you have a high deductible plan with high premiums, it seems like health insurance is evil, but insurance companeis are required to pay out like 80% of the premium revenue they receive as medical benefits. so aetna pays something like $50B a year to pay for people's surgeries, child birth, medications, hospital stays, etc
if you dont think health insurance is valuable youve never been really sick
Re: Aetna CEO Set to Reap About $500M If CVS Deal Closes
#110Earlier quoted context omitted.
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 pro…
This is from be ACA but I think it gives the general idea of the tactics insurance companies use: https://health.usnews.com/health-news/articles/2008/08/25/ho... Here's one from after ACA passed and was implemented: https://www.cbsnews.com/news/mental-illness-health-care-insu... The ACA attempted to make things more fair in terms of appealing denials and mandating certain coverages. It's not reasonable to believe tha…
> profit, at least partly, comes from denying care.
This is the same as saying Dole makes part of their profit by selling rotten bananas. A factual statement but the implication of it is incorrect. The bulk of Aetna's business is to sell health insurance to healthy people. Its cheaper to never provide service than to deny payouts.
> Yes the $500 million comes from stock price increase. But that comes from profit
Stock prices rise and fall without any consideration to profit. See Amazon. Aetna's valuation can be based on a thousand different factors. The fact that an offer has been made to purchase Aetna can increase its stock price.