Nonprofit hospitals skimp on charity while CEOs reap millions, report finds • Hacker News Board

Re: Nonprofit hospitals skimp on charity while CEOs reap millions, report finds

#111

Post by conradev » Fri, Oct 20, 2023, 4:46 PM UTC

ceejayoz wrote: post #101

conradev wrote: post #93

Earlier quoted context omitted.

I think it is a misunderstanding that the job market is optimizing for fairness: it is not. Executive pay is supply and demand. The mayor is being paid $450k because a person with the necessary skills was willing to take that salary (after fighting off opponents) to become mayor. Mayor comes with prestige, so more people want to be mayor, and $450k is not a terrible incentive to go after. If the government paid $80k…

> If the government paid $80k a year, no one would become mayor. I very much doubt this. New Hampshire legislators get $100/year, since 1889. Still plenty interested in the job.

Yeah, I would do public service for free, personally, but I have the means to.

It’s an interesting filter to pay nothing, for sure! At that point, it is filtering for people who can afford their own lifestyles without a job

Re: Nonprofit hospitals skimp on charity while CEOs reap millions, report finds

#112

Post by denton-scratch » Fri, Oct 20, 2023, 4:48 PM UTC

csharpminor wrote: post #59

CEO salaries should be understood in relationship to the resources that they control. For example, this CEO chose to spend $85M on travel nurses to counter the union strike happening at a hospital in their network. Presumably the CEO thinks that this gamble is worth it in forcing the union’s hand. That may be a terrible decision, but it shows the extent of resources a CEO of a $6bn organization commands. This is one…

> settling for a second-best CEO to save a 7-figure sum just doesn’t make sense.

Really? You expect the CEO to make all significant decisions, all on his own? No wonder you think the CEO of a billion-dollar company needs a 7-digit salary.

I think the main job of CEO is to appoint useful directors, and promote competent managers. That's certainly a challenging job; but it's a job you can learn, like any management job. I'd even agree that most people are unsuited to that work, as most people are unsuited to any kind of management.

But it doesn't call for some kind of superstar, a one-off snowflake "talent".

> But our mayor oversees thousands of employees and makes decisions that influence hundreds of millions of dollars of spending.

Right; arguably your Mayor might be worth $450K. I'd be upset about my representative being paid that much out of scarce public funds; but that's not even in the same ballpark as the going rate for the CEO of a billion-dollar company.

Re: Nonprofit hospitals skimp on charity while CEOs reap millions, report finds

#113

Post by csharpminor » Fri, Oct 20, 2023, 4:49 PM UTC

nonameiguess wrote: post #66

csharpminor wrote: post #59

CEO salaries should be understood in relationship to the resources that they control. For example, this CEO chose to spend $85M on travel nurses to counter the union strike happening at a hospital in their network. Presumably the CEO thinks that this gamble is worth it in forcing the union’s hand. That may be a terrible decision, but it shows the extent of resources a CEO of a $6bn organization commands. This is one…

Frankly, I think this sort of thinking is wrong almost all of the time. I understand why hiring boards feel they have no choice, but the reality is, outside of maybe 15 people from the past century, there are no clear number ones and number twos. Talent ranking just isn't that accurate. Pro sports has exactly the same problem. If you happen to actually get a LeBron James or Shohei Ohtani, then yeah, they absolutely d…

I completely agree that it’s a crap-shoot, but again from the perspective of a board they’d rather cover their bases and over pay. Especially when this compensation is a fractional percent of the company’s revenue.

The other factor is that when you’re on an exec search team, you just look at other executives in the same industry. There might only be 5-10 total that have similar qualifications and are in your comp range. The core issue is that power and relationships within a given industry are typically very concentrated so there’s a limited pool to draw from if you want an exec (and most boards do) who brings that.

Re: Nonprofit hospitals skimp on charity while CEOs reap millions, report finds

#114

Post by Null-Set » Fri, Oct 20, 2023, 4:50 PM UTC

AndrewKemendo wrote: post #70

csharpminor wrote: post #59

CEO salaries should be understood in relationship to the resources that they control. For example, this CEO chose to spend $85M on travel nurses to counter the union strike happening at a hospital in their network. Presumably the CEO thinks that this gamble is worth it in forcing the union’s hand. That may be a terrible decision, but it shows the extent of resources a CEO of a $6bn organization commands. This is one…

I’m glad you used the travel nurse example because it shows why the comp is so high: The board has to guarantee above all else that the CEO is aligned to serving the board and shareholders above all others ESPECIALLY their employees So every CEO is just stating what their soul is worth. I mean I guess it’s good that it’s so high because psychopaths that can perform at that level without fucking over their masters or…

What shareholders? This article is about nonprofits.

Re: Nonprofit hospitals skimp on charity while CEOs reap millions, report finds

#115

Post by csharpminor » Fri, Oct 20, 2023, 4:50 PM UTC

_jal wrote: post #78

csharpminor wrote: post #59

CEO salaries should be understood in relationship to the resources that they control. For example, this CEO chose to spend $85M on travel nurses to counter the union strike happening at a hospital in their network. Presumably the CEO thinks that this gamble is worth it in forcing the union’s hand. That may be a terrible decision, but it shows the extent of resources a CEO of a $6bn organization commands. This is one…

There is an ongoing scam that pushes C-suite pay ever higher, and it needs to stop. It builds on exactly the reasoning you lay out, and goes something like this: - "We need the best CEO we can find. We have to understand how to set compensation to attract them." - So the board hires an executive compensation consultant. - "If you want better than average, you have to pay above average." So they target something like…

Did you not see my point about taxation?

Re: Nonprofit hospitals skimp on charity while CEOs reap millions, report finds

#116

Post by csharpminor » Fri, Oct 20, 2023, 4:52 PM UTC

optymizer wrote: post #79

csharpminor wrote: post #59

CEO salaries should be understood in relationship to the resources that they control. For example, this CEO chose to spend $85M on travel nurses to counter the union strike happening at a hospital in their network. Presumably the CEO thinks that this gamble is worth it in forcing the union’s hand. That may be a terrible decision, but it shows the extent of resources a CEO of a $6bn organization commands. This is one…

> CEO salaries should be understood in relationship to the resources that they control Why?

Because it’s useful to understand the incentives driving higher exec pay. My point is that shaming organizations into reducing CEO pay is unlikely to work given the incentives, so we should just focus on individual progressive taxation and let companies pay what they want.

Re: Nonprofit hospitals skimp on charity while CEOs reap millions, report finds

#117

Post by JKCalhoun » Fri, Oct 20, 2023, 4:56 PM UTC

csharpminor wrote: post #59

CEO salaries should be understood in relationship to the resources that they control. For example, this CEO chose to spend $85M on travel nurses to counter the union strike happening at a hospital in their network. Presumably the CEO thinks that this gamble is worth it in forcing the union’s hand. That may be a terrible decision, but it shows the extent of resources a CEO of a $6bn organization commands. This is one…

> This is one choice out of tens to hundreds of 8-figure choices that this “super manager” will make in a year.

I had heard the opposite — from Steve Jobs no less. It was an interview I believe (sorry, no source) where he said executives at the top maybe made 6 decisions a year.

For Jobs, to be sure, these decisions are like, "Apple is going to start a chain of retail stores".

Re: Nonprofit hospitals skimp on charity while CEOs reap millions, report finds

#118

Post by RHSeeger » Fri, Oct 20, 2023, 4:57 PM UTC

gniv wrote: post #100

harimau777 wrote: post #55

Earlier quoted context omitted.

Disclaimer at the start: I'm asking this because I want to understand more about the situation that you are presenting, not as an indirect way to "um actually" you. How would margins be defining in this case? When I hear that the margins at gas at a gas station are x%, I understand that they are basically talking about how much I pay per gallon minus how much the gas station paid per gallon. However, it feels like de…

I think you are right to be suspicious. For example, back when I lived in the US and went for a checkup at a big hospital in NY: first there were greeters at the entrance of the building, then a greeter on the right floor, then a small army of receptionists, then a nurse, then a PA, then the doctor. All these are expenses. Are they necessary? Here in France there is, maybe, a receptionist that sends me to the office…

> Here in France there is, maybe, a receptionist that sends me to the office where the doctor does everything, including billing.

If the doctor is making an order of magnitude more for their time than the receptionist, it's far more effective to have more receptionists for the work either of them could do.

Re: Nonprofit hospitals skimp on charity while CEOs reap millions, report finds

#119

Post by csharpminor » Fri, Oct 20, 2023, 4:57 PM UTC

vsareto wrote: post #76

csharpminor wrote: post #59

CEO salaries should be understood in relationship to the resources that they control. For example, this CEO chose to spend $85M on travel nurses to counter the union strike happening at a hospital in their network. Presumably the CEO thinks that this gamble is worth it in forcing the union’s hand. That may be a terrible decision, but it shows the extent of resources a CEO of a $6bn organization commands. This is one…

>But our mayor oversees thousands of employees Chances are they engage with much less and obviously don't have interactions with thousands of people and are keeping all of that straight in their head, so this is not a good reason. You don't get credit because you oversaw a public worker whom you've never engaged with. >makes decisions that influence hundreds of millions of dollars of spending They also have access to…

Curious to know, what threshold would not be fine and how did you get there? My point is that you’re implicitly using the same method most exec comp committees use to set CEO salaries.

Re: Nonprofit hospitals skimp on charity while CEOs reap millions, report finds

#120

Post by denton-scratch » Fri, Oct 20, 2023, 5:00 PM UTC

Jensson wrote: post #103

conradev wrote: post #93

Earlier quoted context omitted.

I think it is a misunderstanding that the job market is optimizing for fairness: it is not. Executive pay is supply and demand. The mayor is being paid $450k because a person with the necessary skills was willing to take that salary (after fighting off opponents) to become mayor. Mayor comes with prestige, so more people want to be mayor, and $450k is not a terrible incentive to go after. If the government paid $80k…

> That said, these decisions are usually made by a board, which is small and has limited knowledge. The board is usually made up of other executives or former executives. This group sets each others salaries unlike all other professional categories.

As far as I can tell, CEO remunerations are determined by "the going rate"; and the directors on the remuneration committee are fine with that, because they're also CEOs for some other firm, or hope to be. So the going rate goes up, up, up.

Now, here in the UK, the remuneration of University heads (Principal, Master, Dean, or whatever title) are having their pay determined by the going rate for CEOs. These are people who do the job for a couple of days a week; they aren't exactly struggling to get on top of the workload. Same for the bosses of the jungle of pseudo-companies that make up the modern NHS; they're all basically employed by the taxpayer. They've employed so many managers that their organizations are hopelessly top-heavy, and yet they need huge remuneration.

Can they not delegate? I thought the ability to delegate was an essential skill for any manager.