Some tech founders are getting huge pay packages • Hacker News Board

Re: Some tech founders are getting huge pay packages

#61

Post by andy_ppp » Sun, Oct 17, 2021, 4:06 PM UTC

wpietri wrote: post #47

andy_ppp wrote: post #12

I mean what is a huge salary? There’s so much money flowing around at the top of society where it’s in the interest of tech investors to get the best founders and companies working for them I think investment is going to be larger which will inevitably trickle down to salaries. Weirdly it’s actually much better to not take a large salary and have the lowest possible burn rate to reduce the need for investment dilutin…

The theory that maximum money gets you "the best" is... under-evidenced. It's just as likely to get you the greediest, the most manipulative, or the most opportunistic. A good place to start is with Kohn's "Punished by Rewards", which covers a fair bit of research on how intrinsic motivation is undermined by extrinsic motivation. The people I know who are great at something do it because they truly love it. Whereas t…

I’m not convinced, essentially I’m saying businesses that have higher growth rates will get more investment and consequently pay higher salaries. For example the best developers already know their worth and I would suspect paying well to on average be correlated with better software. If you’re paying your developers $300k+ you’re likely to also remunerate yourself similarly well.

I’d really be surprised if paying top rate for devs isn’t associated with more successful companies but sure, some will waste their investment in the wrong places and some will be trying to artificially enrich themselves, maybe even faking growth numbers which I’d be surprised if it doesn’t happen a lot.

As for me if I’m doing a startup I’d prefer to be more mission driven and keep all of the equity for myself and the founding team or as much as possible.

Re: Some tech founders are getting huge pay packages

#62

Post by varelse » Sun, Oct 17, 2021, 4:14 PM UTC

The best part is if they hired the right tax accountant and played their cards right most of this will be tax-free income.

And that's the way our bought and paid for government wants it, so it will stay that way. It's not about political affiliation, it's purely about the money that pays for the candidates running for office.

Edit: what truly warms the Schadenfreude in my heart here is that this only applies to founders and investors. Rank and file employees are not invited to this particular party. So for the employees to defend this system has so many parallels everywhere else.

Re: Some tech founders are getting huge pay packages

#63

Post by topkai22 » Sun, Oct 17, 2021, 4:19 PM UTC

Do these pay packages have to get accounted for in the standard filing? These pay packages seem like massive liabilities that need to not just be listed in the text but be accounted for in the numbers.

Re: Some tech founders are getting huge pay packages

#64

Post by crmd » Sun, Oct 17, 2021, 4:23 PM UTC

missedthecue wrote: post #44

crmd wrote: post #28

Earlier quoted context omitted.

Probably better for employees. Canadian Pacific was a well governed, profitable company when Bill Ackerman raided the company and laid off 4500 unionized workers to goose the share price. I would be furious if a sociopathic activist investor did this to my company.

I don't think it was "well governed". It was bloated and inefficient. Look at the operating ratio over time between CP and it's direct competitor CN - the lower the better. https://corpgov.law.harvard.edu/wp-content/uploads/2016/12/C... CP was languishing until Ackman fired their CEO in 2011 and put Hunter Harrison at the helm.

CP was widely recognized as a well-governed company prior to the corporate raid. FTFA:

>In 2009, CP was awarded the Governance Gavel Award for Director Disclosure by the Canadian Coalition for Good Governance. Then, in 2011, CP ranked 4th out of some 250 Canadian companies in the Globe & Mail Corporate Governance Ranking.

Re: Some tech founders are getting huge pay packages

#65

Post by MomoXenosaga » Sun, Oct 17, 2021, 4:30 PM UTC

batty_alex wrote: post #9

So… Tech founders are now following the Facebook model: non-voting shares, enriching themselves, keeping most of the power Everyone is done pretending to be the “good founder,” that ship seems to have sailed

The techno priests are just as bad as the old ones.

Re: Some tech founders are getting huge pay packages

#66

Post by crmd » Sun, Oct 17, 2021, 4:31 PM UTC

JumpCrisscross wrote: post #50

silexia wrote: post #48

Earlier quoted context omitted.

So paying employees the minimum amount possible is efficient to you? Maybe it results in better short-term profits, but it destroys the company long-term.

> paying employees the minimum amount possible is efficient to you? Did pay go down? I don't think that's accurate. Paying a bunch of excess employees, yes, that's not efficient. That's practically textbook inefficient. Are we really on a forum run by a VC debating capitalism?

There are plenty of capitalists who believe one of the several purposes of a company is to provide meaningful jobs in the communities in which they operate. When company owners cut the payroll to hoard profits, the remaining employees have to work harder for the same salary. It is the literal definition of the investor class siphoning wealth from the working class.

Re: Some tech founders are getting huge pay packages

#67

Post by missedthecue » Sun, Oct 17, 2021, 4:45 PM UTC

crmd wrote: post #64

missedthecue wrote: post #44

Earlier quoted context omitted.

I don't think it was "well governed". It was bloated and inefficient. Look at the operating ratio over time between CP and it's direct competitor CN - the lower the better. https://corpgov.law.harvard.edu/wp-content/uploads/2016/12/C... CP was languishing until Ackman fired their CEO in 2011 and put Hunter Harrison at the helm.

CP was widely recognized as a well-governed company prior to the corporate raid. FTFA: >In 2009, CP was awarded the Governance Gavel Award for Director Disclosure by the Canadian Coalition for Good Governance. Then, in 2011, CP ranked 4th out of some 250 Canadian companies in the Globe & Mail Corporate Governance Ranking.

I'm not sure how much weight you should give to industry awards.

Enron was named "America's Most Innovative Company" by Fortune for six consecutive years, from 1996 to 2001.

Enron Chief Executive Kenneth Lay received the Marco Polo Award in 1999, one of the highest awards given to entrepreneurs and innovators.

Enron finance chief Andrew S. Fastow received the Excellence Award from CFO magazine in 1999.

Re: Some tech founders are getting huge pay packages

#68

Post by lph » Sun, Oct 17, 2021, 4:49 PM UTC

This article misses the more interesting thing, which is tech founders getting huge pay packages for companies that haven't yet delivered anything or have no realistic path to profitability. They call out WeWork and Theranos, but fail to see how close many of these others are to those. Archer? We're never going to see air taxis in our lifetimes. Nikola is already a collapsing scam. Bird? They are never going to be able to charge what it actually costs for a scooter rental, just like all of failed bike shares.

The measure for founder success is now "able to raise an obscene amount of capital", and not "able to build a sustainable business". Investors should run screaming from SPACs, but they don't, because the sheer inertia of a high valuation brings in the next wave of dumb money, allowing the early investors to cash out. It's a damned Pyramid scheme. We are truly living in the golden age of scams.

Re: Some tech founders are getting huge pay packages

#69

Post by cracker_jacks » Sun, Oct 17, 2021, 5:16 PM UTC

avs733 wrote: post #41

giantg2 wrote: post #37

Today’s tech founders who are lucky are getting huge pay packages. Plenty of small time founders out there who didn't start a unicorn.

Exactly…the packages that get reported on don’t get reported on for being the average or the median. They get reported on for being noteworthy. The last good data I saw (which I believe was 2017?) had median founder ownership at large exit for VC funded startups as something like 11%

Any memory of where you found this data?

Re: Some tech founders are getting huge pay packages

#70

Post by marvin » Sun, Oct 17, 2021, 5:21 PM UTC

JumpCrisscross wrote: post #18

iamstupidsimple wrote: post #14

Earlier quoted context omitted.

The less power controlled by the investor class, the better.

> less power controlled by the investor class, the better Define "better." Because it apparently doesn't include reducing carbon emissions [1] or increasing returns [2]. Nor, for that matter, creating and supporting the forum you're on. [1] https://www.msn.com/en-US/news/topstocks/chevron-plans-big-l... [2] https://corpgov.law.harvard.edu/2016/12/23/a-successful-case...

Greenhouse gas emissions and climate change has nothing to do with ownership structure. Employee-owned companies make just as selfish decisions as investor-owned companies, and if they didn't, they'd lose to the competition if they tried to do the altruistic thing.

These are separate questions; the solution to greenhouse gas emissions is globally-enforced taxes on emissions with the tax used to reverse the emissions.