141–150 of 160 posts
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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.
And if the company had done poorly, would be game for the employees taking a pay cut? It works both ways.
Or getting laid off.
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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…
Hahaha, that's a good one.
The CEO would get a golden parachute payout and move onto another highly paid position.
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I'm not particularly animated by the issue but I'm also not convinced the compensation has much to do with relative ability and performance. It's based on lucky positioning and risk averse ass covering (the board thinks it is more defensible to pay lots for a star than take a risk paying less).
You're right, partially. The thing about free markets is that the average value across all data points will converge to the free market value, and there are outliers on both sides. There are lots of CEOs that are under-paid for their abilities as well as lots of CEOs that are over-paid for their abilities. If you were to look at all CEO salaries averaged over all companies in an industry, you probably would get a pre…
First you have to prove that the CEO market is efficient. Then you can praise the free hand.
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> 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 th…
> Huge upside with limited downside From your perspective, sure, especially if you're only considering financial downside. There are huge non-financial downside risks, like staking your personal reputation on the performance of the 50,000 person company that you're running. Maybe you don't personally care about those other risks, but CEOs in that position do. > encourages reckless risk taking Not all CEOs take reckle…
That doesn't actually happen. CEOs get golden parachutes and move on to high paid jobs somewhere else when their company does poorly.
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If you got fired from a job that had a potential $500M payday attached to it and only got a $25M severance package at the end of it, trust me, you'd be pretty bummed about it. Go looking for CEOs that got fired and see where they landed. it's one and done for a lot of them. Again, there is no room for socialist populism here. He negotiated a package and he delivered results. His interests as a CEO are aligned with th…
> If you got fired from a job that had a potential $500M payday attached to it and only got a $25M severance package at the end of it, trust me, you'd be pretty bummed about it. Trust me, I wouldn't be. I pity the person who is bummed to have only $25M. > He negotiated a package and he delivered results. His interests as a CEO are aligned with the shareholders who risk their capital with ownership of the company. The…
"Though I have served as a director of twenty public companies, only one CEO has put me on his comp committee. Hmmmm . . ."
Everyone in this thread claiming CEOs usually "earn" their compensation needs to read this and explain why Buffet's arguments are wrong.
(Not because it's Buffett, because his arguments are well thought out and reflect a lot of personal experience with the topic.)
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I'm not particularly animated by the issue but I'm also not convinced the compensation has much to do with relative ability and performance. It's based on lucky positioning and risk averse ass covering (the board thinks it is more defensible to pay lots for a star than take a risk paying less).
You're right, partially. The thing about free markets is that the average value across all data points will converge to the free market value, and there are outliers on both sides. There are lots of CEOs that are under-paid for their abilities as well as lots of CEOs that are over-paid for their abilities. If you were to look at all CEO salaries averaged over all companies in an industry, you probably would get a pre…
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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.
This is not at all self evident. There is a lot of reporting suggesting CEO compensation is not really tied to the best interests of share holders.
As cited elsewhere in this thread:
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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." Hahaha, that's a good one. The CEO would get a golden parachute payout and move onto another highly paid position.
Earlier quoted context omitted.
You're right, partially. The thing about free markets is that the average value across all data points will converge to the free market value, and there are outliers on both sides. There are lots of CEOs that are under-paid for their abilities as well as lots of CEOs that are over-paid for their abilities. If you were to look at all CEO salaries averaged over all companies in an industry, you probably would get a pre…
You are begging the question. First you have to prove that the CEO market is efficient. Then you can praise the free hand.