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CEO pay and stock buybacks have soared at the largest low-wage corporations

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Re: CEO pay and stock buybacks have soared at the largest low-wage corporations

#51

Post by FredPret »

missedthecue wrote: post #31
Hikikomori wrote: post #24

Earlier quoted context omitted.

Is part of the performance keeping worker wages as low as possible?

No. If keeping worker wages as low as possible was the goal, they wouldn't award stock or healthcare benefits to part time workers in their kitchens. The point is that poaching a new CEO from another company (in this case, Chipotle), and awarding him a pile of stock options if he hits certain metrics is not pay, is not comparable to W2 income, does not hit his bank account, and does not make anyone else poorer, excep…

This is a point always missed in debates about CEO pay. The money doesn't rain from the sky onto his yacht. Shareholders have to shell it out, and they'd prefer the CEO works for free. That CEO has to add billions to their bottom line in order to get paid millions.

Re: CEO pay and stock buybacks have soared at the largest low-wage corporations

#52

Post by nielsbot »

missedthecue wrote: post #22
nielsbot wrote: post #10

Stock buybacks used to be illegal. It's a loophole way of paying employees at a lower tax rate than salary. HBR discusses some downsides of buybacks: https://hbr.org/2020/01/why-stock-buybacks-are-dangerous-for...

Stock buybacks were never illegal. Stock buybacks were how Buffett took control of a small textile mill called Berkshire Hathaway in the 1960s. What was not allowed was at-the-market buybacks in the open market. Corporations had to do tender offers at a fixed price, usually well above market price, in order to attract sellers to mail in their certificates. I'm not sure why that is necessarily better or helps anyone,…

According to Forbes they were

> For most of the 20th century, stock buybacks were deemed illegal because they were thought to be a form of stock market manipulation.

https://www.forbes.com/sites/aalsin/2017/02/28/shareholders-...

Re: CEO pay and stock buybacks have soared at the largest low-wage corporations

#53

Post by bruceb »

fakedang wrote: post #35
bruceb wrote: post #7

This from an advocacy group with a clear agenda. But if they wanted to raise wages they could just advocate for less immigration and robust enforcement. Restrict supply, wages will rise. But they don't.

Doesn't matter here. The examples cited here are Starbucks and Ulta Beauty, neither of which are big on hiring illegal or foreign workers.

Hundreds of thousand of foreigners were given work permits by the previous administration. You can see all the companies they highlight in the report here. Many do hire foreign workers: https://ips-dc.org/wp-content/uploads/2025/08/executive_exce...

Clearly there foreign workers at Starbucks or there would not be protests: According to the popular videos circulating over the Internet, Starbucks halted a few minutes of their services across the nation as a form of protest against the recent “illegal deportation of immigrants.” "We are stopping work for a few minutes to read a statement in protest of actions against our fellow workers," Starbucks Workers United members at the Ellicott City location in Maryland said in a statement during their strike on April 1.

https://economictimes.indiatimes.com/news/international/glob...?

Re: CEO pay and stock buybacks have soared at the largest low-wage corporations

#54

Post by CGMthrowaway »

csours wrote: post #25

I'm not sure how to phrase this, so please be patient and try to understand what I intend to say. CEO pay relative to median employee pay has soared since the 1970s. That is, a CEO may be paid $10,000,000 vs the median employee at $70,000 (arbitrary numbers), where before 1970 the numbers may have been $150,000 and $20,000 Using only one set of numbers can be deceiving though. For instance, through mergers and acquis…

As a thought experiment, consider what it would take to make CEO pay gap even BIGGER, in addition to stock-based comp* and buybacks, which are mentioned in headline. Here's what one might do:

- Reduce unions

- Outsource and automate labor

- Slow minimum wage increases

- Consolidate power via M&A (you mentioned this)

- Cut back on benefits like healthcare, pensions and paid leave

- Promote "guru culture": indispensable, iconic leaders like Jack Welch, Steve Jobs etc

- Shift economy towards high-margin industries (tech, finance, pharma) and away from lower-margin ones (retail, manufacturing)

Turns out all of these have been happening since the 70s. So this result should not be surprising.

*Important note that the 1993 Clinton tax bill made it so corporations could no longer deduct the full amount of top executive salaries as a business expense. Only up to $1 million. UNLESS the amount beyond $1 million was performance-based (leading to stock option comp boom).

Re: CEO pay and stock buybacks have soared at the largest low-wage corporations

#55

Post by nielsbot »

missedthecue wrote: post #44
arthurcolle wrote: post #38

Earlier quoted context omitted.

I think they are actually bad because it enables messing with stock price in a way that is "explainable" when really it is just a bookkeeping exercise

Messing in what way? They are buying from willing sellers at the market price, using funds that are announced well before hand in public government filings (Form 10-Q and 8K) are to be used to buyback shares Sure, bids hitting the orderbook theoretically keeps a stock price higher than the counterfactual where the bids did not exist, but it's simply urban myth that failing companies can keep their stock price high ov…

> Sure, bids hitting the orderbook theoretically keeps a stock price higher

QED: manipulation

> failing companies can keep their stock price high over the long term with buybacks

This assumes they care about the long term.

Re: CEO pay and stock buybacks have soared at the largest low-wage corporations

#56

Post by missedthecue »

VirusNewbie wrote: post #23

This in particular seems silly to post to the hackernews crowd, as this seems to imply the majority of stock goes to senior execs, when large tech companies are literally paying out tens of billions of dollars to the average tech worker.

This is a great point. Companies like Microsoft have spent billions on buybacks over the last couple years, yet their sharecount has not decreased. It's literally just to eat up the dilution from paying out RSUs to rank and file.

Re: CEO pay and stock buybacks have soared at the largest low-wage corporations

#57

Post by simianwords »

nostrademons wrote: post #8

It’s entirely possible that this is causal ABs deliberate, ie the reason why boards of these companies have approved large CEO pay packages is so that the CEO will align themselves with the shareholders paying them rather than the workers working for them and cut wages so the money can be returned to shareholders as buybacks.

Yeah pretty much.. but this is a good thing. Companies should focus on improving profits and not wages.

Re: CEO pay and stock buybacks have soared at the largest low-wage corporations

#58

Post by TylerE »

simianwords wrote: post #57
nostrademons wrote: post #8

It’s entirely possible that this is causal ABs deliberate, ie the reason why boards of these companies have approved large CEO pay packages is so that the CEO will align themselves with the shareholders paying them rather than the workers working for them and cut wages so the money can be returned to shareholders as buybacks.

Yeah pretty much.. but this is a good thing. Companies should focus on improving profits and not wages.

Yes, crush the bottom 99.9% under the jackboots of the 0.1% even harder! That's what we need!

Re: CEO pay and stock buybacks have soared at the largest low-wage corporations

#59

Post by pj_mukh »

nostrademons wrote: post #8

It’s entirely possible that this is causal ABs deliberate, ie the reason why boards of these companies have approved large CEO pay packages is so that the CEO will align themselves with the shareholders paying them rather than the workers working for them and cut wages so the money can be returned to shareholders as buybacks.

Now the question is how the efficient market hypothesis plays out here in the long term. Counterexamples like Costco exist and are doing extremely well, when and how do their asset prices reflect this?

Re: CEO pay and stock buybacks have soared at the largest low-wage corporations

#60

Post by mnky9800n »

nostrademons wrote: post #8

It’s entirely possible that this is causal ABs deliberate, ie the reason why boards of these companies have approved large CEO pay packages is so that the CEO will align themselves with the shareholders paying them rather than the workers working for them and cut wages so the money can be returned to shareholders as buybacks.

Do you have an iPhone? Mine is constantly turning “and” into “ABs” when I type with swipe.
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