CEOs are hugely expensive – why not automate them? • Hacker News Board

Re: CEOs are hugely expensive – why not automate them?

#231

Post by ramtatatam » Mon, Apr 26, 2021, 5:56 PM UTC

lm28469 wrote: post #86

egypturnash wrote: post #81

Earlier quoted context omitted.

“Sell shit online” is such an inobvious idea. I don’t know how Bezos thought it up! Completely unexpected.

Then why is he the richest man on earth and you're not ? It's always obvious and easy when you look back at history ...

I remember when in early 90's somebody was saying there will be a computer in each house. At the time I thought - good luck with that, computers are so expensive (I was in my early teens back then so my opinion was not particularly useful because I had no money and computers in my country were very expensive compared with average wage).

Then in late 90's somebody said internet will be in each house - again I could not believe :)

Later somebody said people will do shopping through internet - guess what my opinion was ;)

Later somebody said everyone will have a smartphone - at this point I thought my gut feeling is probably wrong - even if I was happy with my mobile I thought my spending habits are different than those of majority.

Later somebody said everyone will be connected to the internet 24/7 on their smartphones.

So I missed most of the wave purely because I had no imagination and no business acumen.. I can image value of people who do see those trends early.

Re: CEOs are hugely expensive – why not automate them?

#232

Post by Ericson2314 » Mon, Apr 26, 2021, 5:56 PM UTC

This is all very silly.

Upper management is payed a lot in stock to assure loyalty to ownership. This is a crucial component to enforcing the shareholder theory of value: a legal prerogative that was being eroded in the mid 20th century as industry became more complex, workers became more empowered, and absentee ownership had a harder time holding onto the reigns.

Re: CEOs are hugely expensive – why not automate them?

#233

Post by Invictus0 » Mon, Apr 26, 2021, 5:56 PM UTC

majormajor wrote: post #97

kaczordon wrote: post #77

Earlier quoted context omitted.

There was a Danish study that showed that a death in the family of a Danish CEO led, on average, to a 9 percent decline in the profitability of the corporation. If it was the death of a spouse, the decline was 15 percent and, if it was a child who died, 21 percent. From the study: “Interestingly, similar deaths experienced by individual members of the board of directors do not significantly affect firms’ outcomes. Ou…

That demonstrates that a CEO can definitely affect results, but what's the baseline? Would the "null CEO" script robot produce the same value as the non-grieving CEO, or the same value as the grieving one?

If Amazon didn't have Jeff Bezos, it would probably still be a bookstore today.

Re: CEOs are hugely expensive – why not automate them?

#234

Post by fighterpilot » Mon, Apr 26, 2021, 5:56 PM UTC

mytailorisrich wrote: post #226

fighterpilot wrote: post #181

Earlier quoted context omitted.

My personal guess is - assuming that democracy is in tact, redistribution will be voted in with landslide support. In a hypothetical future where almost nobody can compete with an AGI and 90% of voters find themselves completely useless in the economy, the proportion of voters who are against redistribution will drop precipitously.

Then what? Everyone is allocated the same by the state? A society where no-one has any function to society and where the state allocates resources to individuals sounds more dystopian than utopian to me...

I was merely stating what I expect to happen, not what I want.

It sounds pretty bad to me as well. Not worse than poverty, but meaningless and boring otherwise. Some people will make their own meaning, but many won't.

Re: CEOs are hugely expensive – why not automate them?

#235

Post by klyrs » Mon, Apr 26, 2021, 5:58 PM UTC

chrisseaton wrote: post #211

g8oz wrote: post #143

Earlier quoted context omitted.

Class solidarity.

I don't know what you're imagining here. Imagine a charity or pension fund that invests in a company. What incentive do you think they have to spend money unnecessarily on CEO compensation?

The conversation around Mitchell Baker's compensation was particularly illuminating, I think. Why do nonprofits pay CEOs millions a year? Because executives expect to be paid that much, and it would be demeaning to pay less.

Re: CEOs are hugely expensive – why not automate them?

#236

Post by chrisseaton » Mon, Apr 26, 2021, 5:58 PM UTC

klyrs wrote: post #235

chrisseaton wrote: post #211

Earlier quoted context omitted.

I don't know what you're imagining here. Imagine a charity or pension fund that invests in a company. What incentive do you think they have to spend money unnecessarily on CEO compensation?

The conversation around Mitchell Baker's compensation was particularly illuminating, I think. Why do nonprofits pay CEOs millions a year? Because executives expect to be paid that much, and it would be demeaning to pay less.

In other words, normal market forces. The same reason you're paid whatever you're paid.

Re: CEOs are hugely expensive – why not automate them?

#237

Post by xmprt » Mon, Apr 26, 2021, 5:59 PM UTC

woeirua wrote: post #116

I too used to think that CEOs were a waste of resources, and that they had minimal if any impact on most companies. But I think people grossly underestimate how important CEOs are, because the vast majority of them do a decent job. When you swap out somebody who does a decent job for another person who performs at about the same level it's not really that noticeable. That said, you'll come to appreciate those "decent…

The problem I have with CEOs is when they're doing a good job they make $$$ but when they're doing a bad job they still make $$. When a company goes down, they have golden parachutes to ensure that they're safe. Meanwhile, workers get shafted.

Re: CEOs are hugely expensive – why not automate them?

#238

Post by xyzzy21 » Mon, Apr 26, 2021, 5:59 PM UTC

MattGaiser wrote: post #118

sn41 wrote: post #104

Earlier quoted context omitted.

And so they go for stock buyback strategies. Reduce the supply, the stock skyrockets, cash in, leave.

You need profits for stock buybacks. Buybacks are just superior to dividends as a way to return capital.

Strictly no. You need "free" zero interest money from the Fed! That's how MOST stock buy-backs are financed - it going onto the balance sheet as debt which someday will bite them.

This is the shitty side of many modern CEOs. But the legal and tax incentives combined with Wall Street demands create the environment for it.

Re: CEOs are hugely expensive – why not automate them?

#239

Post by klyrs » Mon, Apr 26, 2021, 6:00 PM UTC

PragmaticPulp wrote: post #47

klyrs wrote: post #10

Why is paying them less not seen as an option? I've seen multiple startups struggle because their CEO makes more than 10 qualified technical staff, where the employees burn out because there's no budget to hire the technical staff the company needs.

> I've seen multiple startups struggle because their CEO makes more than 10 qualified technical staff, The fully loaded cost of a qualified developer begins in the six figures. A CEO earning 10x that would be earning 7 figures. I've never seen an actual startup with a CEO earning 7 figure cash compensation. I don't think any reasonable investors or even board members would allow that. Startup CEOs are largely compens…

Yeah, you're right, I guess I've only seen ~5x at proper startups, but when you multiply that by the number of executives, it's still an egregious impediment to the product

Re: CEOs are hugely expensive – why not automate them?

#240

Post by shuntress » Mon, Apr 26, 2021, 6:01 PM UTC

incrudible wrote: post #223

shuntress wrote: post #201

Earlier quoted context omitted.

I think you might be misunderstanding what "All numbers in thousands" means on that table she linked. EDIT: To be clear, Walmart's revenue in 2020 was 559 Billion with a B[0]. We can see on that table[1] that if we take the values listed in the "Total Revenue" row (559 Million with an M, 523 Million with an M, etc) and multiply them by 1,000 according to the directions ("All numbers in thousands") on the chart that w…

You're looking at the wrong number. See how it says "Operating Expenses" right below "Gross Income"? You're going to need to subtract that, then you're at operating income. Subtract operating income expenses and you're at pre-tax income. Subtract the tax and then you have what you might actually consider "profit". It's less than 10% of your original figure.

Thank you for actually helping!