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Boeing workers vote to strike

washingtonpost.com

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Re: Boeing workers vote to strike

#121

Post by markus_zhang »

toomuchtodo wrote: post #2

Boeing spent $43B on stock buybacks between 2013 and 2019 while paying their CEO ~$30M/year. > To support its share price, the company under McNerney poured billions into stock buybacks instead of investing profits into the kind of research and development needed to stay competitive. McNerney decided not to spend billions of dollars building a new plane to replace the 737. Instead, Boeing tweaked and updated the exis…

I have said this and I'll say this again: executives should never have a disproportionate pay comparing to their most senior trench workers (think a very senior, lead engineer). 3-5x should be the maximum.

The saying of "oh if you don't give big bucks then you won't hire good talents" is only true to certain extends. Einstein doesn't figure out GR because he wants the cash from Nobel's prize, actually none of the winners probably achieve because of the money. Scientists won't stop inventing because they don't get the big bucks (most don't get big bucks anyway). Carmack would still pump out great code if he stays indie. As long as properly paid, pretty much every real talent would be happy and do whatever they love to do.

Giving disproportional pay to executives ONLY attract bad players and TBH some 500 are probably better NOT have an executive. It also creates sort of toxic culture everywhere that people are forced to chase big bucks because average pay is screwed.

Re: Boeing workers vote to strike

#123

Post by passwordoops »

markus_zhang wrote: post #121
toomuchtodo wrote: post #2

Boeing spent $43B on stock buybacks between 2013 and 2019 while paying their CEO ~$30M/year. > To support its share price, the company under McNerney poured billions into stock buybacks instead of investing profits into the kind of research and development needed to stay competitive. McNerney decided not to spend billions of dollars building a new plane to replace the 737. Instead, Boeing tweaked and updated the exis…

I have said this and I'll say this again: executives should never have a disproportionate pay comparing to their most senior trench workers (think a very senior, lead engineer). 3-5x should be the maximum. The saying of "oh if you don't give big bucks then you won't hire good talents" is only true to certain extends. Einstein doesn't figure out GR because he wants the cash from Nobel's prize, actually none of the win…

Also, the only reasonable response to the saying of "oh if you don't give big bucks then you won't hire good talents" is "you mean the same talent that got you into this mess in the first place?"

Re: Boeing workers vote to strike

#124

Post by thrance »

cced wrote: post #85
swarnie wrote: post #31

Earlier quoted context omitted.

> Boeing spent $43B on stock buybacks between 2013 and 2019 while paying their CEO ~$30M/year. Boeing share price was up almost 400% in that period. If the business goal was to maximise share price and therefore return for investors over that period it was a cracking success. Since the US government will always pick up the pieces in the event of a failure its a minimal risk stratagy.

Can someone explain to me the theory of stock buybacks? How is this not just financial engineering? How are you meant to differentiate companies who’s stock goes up because they’ve been productive and made great products from those that increase their stock prices using buybacks? Are there rules against taking out loans and using them to perform stock buybacks?

Stock buybacks used to be illegal in the States up until 1982. You can thank Raegan for that too.

Re: Boeing workers vote to strike

#125

Post by passwordoops »

Simon_ORourke wrote: post #44
toomuchtodo wrote: post #2

Boeing spent $43B on stock buybacks between 2013 and 2019 while paying their CEO ~$30M/year. > To support its share price, the company under McNerney poured billions into stock buybacks instead of investing profits into the kind of research and development needed to stay competitive. McNerney decided not to spend billions of dollars building a new plane to replace the 737. Instead, Boeing tweaked and updated the exis…

> Muilenberg and McNerney “had personal reasons to emphasize productivity and cost-cutting” because their compensation was tied to share performance. Together they took $209 million in total pay over seven years. Absolutely stunning - those guys will walk away from this mess with more money than God and American aviation will take a backwards step that may take decades to fix if at all... fuming here.

Incentives matter. The extremist solution would be to ban executive compensation tied to stock price and some mechanism where every penny more that goes into buybacks/dividends than R&D/CapEx is taxed at 105%.

Oh, and make executive and BoDs personally and criminally liable for safety fiascos like the 737MAX. I bet you'll see culture change in a hurry under those circumstances

Re: Boeing workers vote to strike

#126

Post by lupusreal »

obscuretone wrote: post #70
sofixa wrote: post #43

Earlier quoted context omitted.

The MCAS failure was a multilayered one. The engineers who designed it, software engineers who developed it, QA, testing, pilots, managers who approved, managers who instilled that work culture, etc etc are all responsible and should all have been fired and sentenced to prison for their negligence and dereliction of duty.

If everyone is a little bit responsible then no one is fully responsible. It’s like dieselgate. Or the Pornhub chaos. The VP’s tell the directors to get it done. The directors get it done. There’s a liability force field and those that protect and serve are elevated.

In the aerospace industry, and other safety critical industries, they use the "swiss cheese" model for risk analysis. For an accident to get through all the layers (slices of cheese) meant to stop accidents, you need the holes in all of those layers to line up in just the wrong way. When that happens you need to investigate and fix each layer of cheese, not focus on the single layer of cheese on the top and ignore the rest. You will never build reliable safety critical systems with the mentality that only a single point of responsibility needs to be identified and corrected.

https://en.wikipedia.org/wiki/Swiss_cheese_model

Re: Boeing workers vote to strike

#127

Post by M95D »

photonthug wrote: post #90
AmericanChopper wrote: post #68

Earlier quoted context omitted.

Then blame the board imo. They define the objectives for the CEO, the incentives for achieving them, and the governance framework for governing their execution. If shareholders want this “short term thinking” that always gets brought up, then they have every right to it. Of course this “short term thinking” trope is just a meme that the armchair commentators like to pedal out. If the system was dysfunctional enough t…

> If the system was dysfunctional enough to prioritise short term profit seeking to this extent, then all a competitor would have to do to monopolise any market is do enough “long term thinking” to outlast all their failing competitors. This makes it sound like my broker, the finance community in general, or maybe the state is better able to handle long term thinking than our industry leaders, but why would anyone be…

Stock is sold and bought all the time with no tax. It's in the investor's intrest to sink a company for short-term profits. When the s*it hits the fan, they can sell the falling stock, short-sell even, to some clueless pension funds and invest the money in a competitor instead. When only one company remains, profit +++. This is how stock markets work. Why are you surprised?

Re: Boeing workers vote to strike

#128

Post by ywvcbk »

AnthonyMouse wrote: post #61
stevage wrote: post #30

Earlier quoted context omitted.

High CEO pay is a symptom of poor board control, not a direct cause of poor performce.

CEO pay generally has a relationship to company size, and Boeing is pretty big. It would be hard to argue their CEO is overpaid if they paid the CEO that much and the CEO did a good job . Implying the problem is not how much they were paid but rather the quality of the work.

They did a great job, though..

From the perspective of other board members, upper management and the shareholders at the time.

Re: Boeing workers vote to strike

#129

Post by avidphantasm »

JackYoustra wrote: post #27
toomuchtodo wrote: post #2

Boeing spent $43B on stock buybacks between 2013 and 2019 while paying their CEO ~$30M/year. > To support its share price, the company under McNerney poured billions into stock buybacks instead of investing profits into the kind of research and development needed to stay competitive. McNerney decided not to spend billions of dollars building a new plane to replace the 737. Instead, Boeing tweaked and updated the exis…

It's kinda fun, right? The whole point of tying executive compensation to share price was to have them have some rough stake in the business, but even that didn't prove enough: there's always a longer term, and doing a visible, clear NPV boost is usually accretive to market cap even if it introduces long-term risk, because the long term risks are usually hidden from public eye and very mushy. Ironically, I think the…

Would love to see a shift towards something like deferred options for executives. Or, ya know, a fixed multiplier on median employee pay, like managers make 3x median, VPs 5x, CEOs 7x. I’m okay with people who have crazy responsibilities making good money, but it doesn’t have to be obscene.

Re: Boeing workers vote to strike

#130

Post by hnthrow289570 »

AmericanChopper wrote: post #68
JackYoustra wrote: post #27

Earlier quoted context omitted.

It's kinda fun, right? The whole point of tying executive compensation to share price was to have them have some rough stake in the business, but even that didn't prove enough: there's always a longer term, and doing a visible, clear NPV boost is usually accretive to market cap even if it introduces long-term risk, because the long term risks are usually hidden from public eye and very mushy. Ironically, I think the…

Then blame the board imo. They define the objectives for the CEO, the incentives for achieving them, and the governance framework for governing their execution. If shareholders want this “short term thinking” that always gets brought up, then they have every right to it. Of course this “short term thinking” trope is just a meme that the armchair commentators like to pedal out. If the system was dysfunctional enough t…

>Then blame the board imo

Half of them would look like job hoppers with such short tenures on their resume. Some of them have simultaneous executive positions at other companies.

If you want some evidence of short-term thinking not being a meme, it's probably that.

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