141–150 of 153 posts
Equates to about $314, or a month's pay per employee by reported estimates.
Definitely not bad -- I can also really appreciate an even split to all employees -- I know some might view it as unfair that someone who just started might get the same bonus as a long term employee, but for just a windfall, I think it was a good idea to keep it all even.
How is this any different than, for instance, Steve Jobs taking only $1 per year in CEO salary?
Steve Jobs taking $1 per year would give the benefits to the shareholders, not the employees. It would be the same if Steve Jobs gives his salary millions to the Apple employees.
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You've just reiterated the value theory of labor, first expressed by Karl Marx. I take it you're a Communist then, and follow Communist thinking in other economic thought as well. The classical economic theory of pricing holds that goods (and labor) are exchanged at a point where the supply and demand curves cross. This, according to the principles of free markets as expressed first by Adam Smith and subsequently ref…
From the very interesting first link: Karl Marx allowed for supply and demand, quoting Adam Smith himself, and I believe, describing the status quo of the era: " It suffices to say that if supply and demand equilibrate each other, the market prices of commodities will correspond with their natural prices, that is to say, with their values as determined by the respective quantities of labor required for their producti…
It's that a lot of what's passed off as free-market capitalism is anything but.
In biot's case, arguing that the value generated by an individual should serve as the basis for that person's pay. It isn't, but is only one input (essentially defining the demand curve, and setting a possible upper limit), but the true market pay scale being one that would also have to take into consideration supply. As I noted (somewhat snarkily), market conditions for establishing executive pay fall somewhat short of the free market definition. For a more popular treatment, Eddie Murphey and Dan Akroyd's "Trading Places" explores a similar idea. Mark Lewis's writings on the stock market provide some insight on trader qualifications and pay.
A friend some years ago provided an intriguing argument for why financial traders' pay was as high as it was. It was less a conventional market pricing argument than one of creating incentives to minimize incentives for fraud. Essentially: we're going to pay you so goddamned much money that you'd be completely mental to try to cheat on us and lose out.
I really cannot speak to the merits of this.
What that, and numerous other arguments for the rich getting ever richer do suggest is that there is a class of people who are very well versed at rationalizing their income and remuneration rates.
There's also a great deal of very, very, very sloppy thinking, rationalization, reportage, etc., in economic matters.
I'm also coming to feel that much of economics as it's been taught for the past 150 years or so simply isn't so. That the conditions described by free markets are far less common and far more fragile than commonly believed. That much of macroeconomics is bunkum used, again, to rationalize why them that has gets more (though, oddly, I'm also coming to understand money, fiscal policy, and Keynesian theory better than ever before), and that much of the economic gain is really a power game played for leverage and advantage, rather than for strict financial gain. A lens which makes the MPAA/RIAA, copyright, patent, trade and immigration law, etc., far more understandable.
Jonathen Nitzan's Capital as Power seems to have stumbled on this same insight: http://www.amazon.com/Capital-Power-Creorder-Political-Econo...
The real question is, "How much did he keep?" and "What was announced in advance?" One can look at Lenovo's financial statements to find his compensation plan. On page 66 of http://www.lenovo.com/ww/lenovo/pdf/report/E_099220120531d.p... it looks like his base pay is just over $1 million. Not shabby. He has up to 300% of his base as an incentive. That would give $3 million. Seems like unless they are paying him separ…
Cynicism never fails me.
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Why? Here in the US we have a cultural flaw where we irrationally conflate equilibria in the supply/demand of labor with distribution of credit for a company's success. The CEO gets paid a lot more because there is a much smaller supply of people who have the pedigree/qualifications to be CEO than to be a line worker. There is no chain of logic that can take you from there to the conclusion that he's more important t…
I'd say it's exactly the other way round: the CEO definitely has to make decisions that impact the company far more than what 10,000 line workers do, for better or for worse. The open question is whether the commonly used pedigree/qualifications that decide who gets to be CEO actually enable people to make substantially better decisions.
The CEO is just the pointy end of the stick. They're not the singular reason the company is successful.
If anything the job of the CEO is to not screw up more than it is to be amazing. There are too many bad decisions to be made on a daily basis.
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From the very interesting first link: Karl Marx allowed for supply and demand, quoting Adam Smith himself, and I believe, describing the status quo of the era: " It suffices to say that if supply and demand equilibrate each other, the market prices of commodities will correspond with their natural prices, that is to say, with their values as determined by the respective quantities of labor required for their producti…
My point isn't that Marx was correct (I really haven't studied him more than topically). It's that a lot of what's passed off as free-market capitalism is anything but. In biot's case, arguing that the value generated by an individual should serve as the basis for that person's pay. It isn't , but is only one input (essentially defining the demand curve, and setting a possible upper limit), but the true market pay sc…
Thanks for your detailed reply, I was thrown by the communist thing, and missed your point almost entirely.
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But, and I shouldn't have to say this it's so obvious, there wouldn't be demand in the labor market for CEOs if boards/shareholders didn't think elite CEOs provided value. There has to be a strong correlation there or the inefficient company paying a low value CEO too much will be out-competed by another company with more sense.
This can be refuted by a simple counter example. Say CEO X provides V units of value to the company. What should CEO X be paid (P)? It has nothing to do with Y, except in the degenerate case where P > V. P is going to be determined by the supply of CEO's with credentials similar to X. P can vary dramatically depending on that supply, but obviously V doesn't change.
Wow! All the praises aside (which Mr. Yuanqing deserves), it's interesting to see because he has ensured the loyalty of his employees to himself and to the company. It's not just a good personal move but an awesome business move too.
This is about loyalty, definitely. Good luck to the board of Lenovo when they decide to fire the CEO - he's got considerable admiration from the front line workers.
Earlier quoted context omitted.
My point isn't that Marx was correct (I really haven't studied him more than topically). It's that a lot of what's passed off as free-market capitalism is anything but. In biot's case, arguing that the value generated by an individual should serve as the basis for that person's pay. It isn't , but is only one input (essentially defining the demand curve, and setting a possible upper limit), but the true market pay sc…
A lot of things clicked for me when I tried to wrap my head around the concept of money as debt. A debt to be paid by the rest of society to the holder, when he's in credit. Or a debt to be paid to the issuer if the holder's a borrower. I'm not going to pretend to understand economics in any great depth. Thanks for your detailed reply, I was thrown by the communist thing, and missed your point almost entirely.
One of the values in these online discussions isn't the ability to convince others nearly so much as it is to hone and refine your own arguments. I'm not sure I'm even partially cogent yet, but I'm starting to stumble in a direction I like.