171–180 of 306 posts
Earlier quoted context omitted.
> Some people have EXPONENTIALLY more impact on saving a business than everyone else in the building. This is true in every organization. The canonical example is Steve Jobs.
So it's not NeXT engineers is it?
While it looks immoral if you don't understand the mechanics, people are simply responding to incentives around bankruptcy laws. Nobody wants to try to turn around a bankrupt company at their old salary (with their old RSU's and options now worthless). The real question is, should Chapter 11's even be allowed for corporations (as opposed to Chapter 7)? Shareholders vote for these because they know that in a Chapter 7…
That's... insane. The point of chapter 11 is that the company does NOT liquidate. Most employees DO NOT LOSE THEIR JOBS. Liquidating a functioning but indebted company destroys any remaining value (there is huge value in the structure of a business -- it's not the sum of inventory and real estate). And most importantly... EVERY SINGLE EMPLOYEE LOSES THEIR JOB There is absolutely no societal value in forcing companies…
Earlier quoted context omitted.
There is no denying that it takes skill and hard work to keep a business afloat in these times, or that it is stressful, or that it is easier to walk away than deal with the situation. On the other hand, very few businesses are the product of a small subset of its people. In many businesses, such as some of the businesses mentioned in this article, it isn't a question of whether those other people can afford to send…
"very few businesses are the product of a small subset of its people" Hate to break it to you but that is EXACTLY what is going on here. Some people have EXPONENTIALLY more impact on saving a business than everyone else in the building. Real world examples: - Two sales people who knew every high profit customer in our local market, which was the core of our turnaround plan - My product engineer, with "the specs in he…
If you remove the people in the high productivity group and replace them with people from the low productivity type then the organisation loses (roughly) 80% of its productivity. Replace people in the low productivity group and nothing happens.
Yes I agree it’s galling to see a few people compensated so highly in these situations, but as has been pointed out a) they individually most likely had little or nothing to do with bringing the problems about. b) What else are you going to do? The alternative is let the most critically essential personnel go and watch the whole organisation seize up for good.
Earlier quoted context omitted.
I really have no idea what point you’re trying to make. Supply and demand and the primary market forces in every conceivable system of economics.
And at no point was that what was addressed by me. Your utter simplification of the labour market to a perfect version of it is.
> It flies in the face of the traditional reasons given for the high pay of executives
The factors that influence pay include, on one side, every single characteristic an employer could potentially be looking for in an employee, how many people there are in the labor market who have those characteristics, and how much they’re willing to pay. On the other side it’s every single characteristic an employee could potentially be looking for in an employer, how many jobs are available in the market, and how much pay they’re willing to accept.
If a job pays highly, it’s not because of one single characteristic attributed to an employee, or that the characteristics of that employee have more intrinsic value, or that there’s something about that employee that just makes them more deserving of money than the janitor is. It’s simply because the demand for whatever labour it is that that employee is providing, exceeds the supply available in the market.
Talking about pay in this manner is only talking about averages in any case. Unless they work in a union shop, an employee has the ability the negotiate pay based on they value they personally provide to the organisation. There’s plenty of reasons why one person in particular may be more valuable to an organisation than any other person with equivalent skills would be.
Earlier quoted context omitted.
> Nobody wants to try to turn around a bankrupt company at their old salary (with their old RSU's and options now worthless). Why not? These executives are paid considerably more than rank-and-file employees under normal circumstances, yet still manage to get bonuses when things turn sour. In contrast, that rank-and-file will be expected to take a pay cut, work more, or lose their livelihood. It flies in the face of…
I've actually helped manage a company in financial distress. Here's reality: - First, most executives have little impact on the specific event that put the firm under. (I was a senior marketing person; the building burned down. Fire safety was most assuredly NOT within my purview or even something I could ask about) - Running a business in financial distress basically sucks. Take your job and make it 10 X harder. You…
without stats I gotta think your case is an outlier, and in many other companies having financial difficulties a senior marketing person might have more impact (although I think impact is generally supposed to be at a higher level than senior marketing)
Earlier quoted context omitted.
I've actually helped manage a company in financial distress. Here's reality: - First, most executives have little impact on the specific event that put the firm under. (I was a senior marketing person; the building burned down. Fire safety was most assuredly NOT within my purview or even something I could ask about) - Running a business in financial distress basically sucks. Take your job and make it 10 X harder. You…
>- First, most executives have little impact on the specific event that put the firm under. (I was a senior marketing person; the building burned down. without stats I gotta think your case is an outlier, and in many other companies having financial difficulties a senior marketing person might have more impact (although I think impact is generally supposed to be at a higher level than senior marketing)
Is that the true face of silicon valley? What happened to “make the world a better place”, or “don’t be evil”. Capitalism works as long as the people in charge are responsible, not if they try to extract as much juice from the system as possible.
Your company is going bust, and you get a bonus? Fuck those guys, seriously.
Earlier quoted context omitted.
There is no denying that it takes skill and hard work to keep a business afloat in these times, or that it is stressful, or that it is easier to walk away than deal with the situation. On the other hand, very few businesses are the product of a small subset of its people. In many businesses, such as some of the businesses mentioned in this article, it isn't a question of whether those other people can afford to send…
> What I am suggesting is that it is immoral to take more when others are given less. You mean like how America takes more than the rest of the world? I think the underlying problem here is that executive salaries and bonuses are at too higher multiples. Much higher than historical norms. Not many would complain about an exec getting a bonus during this time if it was actually reasonable in the first place.
The idea is this: in a time of crisis (say, very low food) how immoral it would be for the father (, etc.) to take much more than the mother (etc.).
And these feels very plausible. It is in the nature of a family to expect sacrifce.
It is these small-scale familial impulses that ideologues often rationalise (on both left and right).
What economics as a (rough) science is meant to provide us with is a way of transcending these impulses. These microeconomic explanations should persuade us that they are being misapplied in this case, and "familial-crisis" thinking cannot plausibly apply to a buisness.
However most people cannot really critically relate to their own emotional instincts, and so often explaining the microeconomics is shouting into the wind.
Earlier quoted context omitted.
> Nobody wants to try to turn around a bankrupt company at their old salary (with their old RSU's and options now worthless). Why not? These executives are paid considerably more than rank-and-file employees under normal circumstances, yet still manage to get bonuses when things turn sour. In contrast, that rank-and-file will be expected to take a pay cut, work more, or lose their livelihood. It flies in the face of…
I've actually helped manage a company in financial distress. Here's reality: - First, most executives have little impact on the specific event that put the firm under. (I was a senior marketing person; the building burned down. Fire safety was most assuredly NOT within my purview or even something I could ask about) - Running a business in financial distress basically sucks. Take your job and make it 10 X harder. You…
Note-to-self: Stay away from vulture-minded execs.
Note-to-investors: Keep an eye on and go the extra mile in rooting out the vulture-minded execs in your companies, before shit hits the fan.
Earlier quoted context omitted.
That's a good point. It would be interesting to get rid of Chapter 11 bankruptcy laws and force Chapter 7 instead. After all, it's shareholders that push companies to seek short term gains rather than long term trends, so when the company goes belly up, shareholders should be left holding that bag.
This would cause unreal job losses. Why in the world would you burn down a house just because someone bought it at too high of a price and now can’t afford the mortgage? How is that societally beneficial?
And it's not like the house would burn down. The assets wouldn't go poof, they'd be auctioned off. The employees will lose their jobs, but then again, a competitor will be hiring because they will have more business, unless there is no market for the offered product at all. And if there's no market at all, then why would we want to spend resources to run a company serving it? An expensive real-life Company Simulator 2000?