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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

#81

Post by bruceb »

kacesensitive wrote: post #39
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.

Yeah no. Immigration’s impact on wages, especially in the long term, is not as straightforward as “less supply → higher pay.” Multiple studies from the U.S. National Academies of Sciences and leading labor economists find that immigration has only small effects on native-born workers’ wages, and in most cases boost overall wage growth by fueling demand, entrepreneurship, and innovation. Restricting immigration might…

"Immigration’s impact on wages, especially in the long term, is not as straightforward as “less supply → higher pay.”

"Restricting immigration might reduce competition in some low-skill job markets, but it can also harm industries that rely on labor shortages being filled"

So restricting immigration of low wage workers, would push up wages in low wage industries. Seems pretty clear.

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

#82

Post by simoncion »

missedthecue wrote: post #74
simoncion wrote: post #66

Earlier quoted context omitted.

> ...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... Are you certain that they are options , and not RSUs? The bonus plan described in the SEC filing [0] seems to indicate that the stock offered is not options. My RSUs absolutely counted as wages once they vested, and I was absolutely able to turn them into cash in my bank ac…

Good question. Options was casual nomenclature. He received PSRUs, which are Performance-based Restricted Stock Units. For him they vest through 2027 depending on if his hits the metrics or not. Failure to hit means no vesting at all. Some of his metrics are about store renovations, revamping the rewards program, and hitting some internal financial operating ratios, and a couple other things.

So, I'm not sure what your claim is. Is it something like "bonus pay is totally incomparable to regular wage pay and does not enter your bank account"? That's the most charitable interpretation I can make out of

> ...awarding him a pile of [RSUs] if he hits certain metrics is not pay, is not comparable to W2 income, does not hit his bank account...

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

#83

Post by cammikebrown »

slashdave wrote: post #78

Inequity is a real thing, but I am confused about why the CEO of a company that consists primarily of low wage earners deserves a lower compensation for that reason alone. If you follow this logic to extremes, the compensation of a CEO of a company of a dozen people earning 100,000 should be higher than one with with tens of thousands of employees earning 30,000. Not all businesses are the same.

Even $30,000 is below minimum wage full time on the west coast. You’re not gonna be doing well at all making that.

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

#84

Post by [deleted] »

missedthecue wrote: post #80
necubi wrote: post #47

Earlier quoted context omitted.

Buybacks are just a more tax-efficient way to issue dividends to shareholders (dividend issuance is a taxable event and at short-term rates, buybacks raise the stock price and those gains aren't taxable until you sell, at which point it may be long-term cap gains). It's reasonable to be upset about the fact that this is arguably a tax dodge! But all of the other criticism of buybacks apply equally to dividends which…

But the buyback involves buying from sellers. Why don't the sellers of the shares owe tax? Don't see how that's a tax-dodge. The fundamental purpose of a buyback is not to raise the stock price. The purpose of a buyback is to reduce the amount of outstanding shares, which makes every existing owner own an increased percentage. If a company buys back 10% of its stock, each long term shareholder now owns 10% more of th…

[deleted]

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

#85

Post by yieldcrv »

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,…

They had a presumption of guilt until a safe harbor rule was adopted by the SEC in 1982

which just formalized ways that the SEC was finding corporations not guilty and transparent enough, this blueprint paved the way for corporations to all copy it as well as reducing the administrative overheard of caring at all

the exceptions make the rule

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

#86

Post by tw04 »

slashdave wrote: post #78

Inequity is a real thing, but I am confused about why the CEO of a company that consists primarily of low wage earners deserves a lower compensation for that reason alone. If you follow this logic to extremes, the compensation of a CEO of a company of a dozen people earning 100,000 should be higher than one with with tens of thousands of employees earning 30,000. Not all businesses are the same.

What’s the motivation of the CEO to increase employee wages if his compensation isn’t tied to theirs?

There’s this perverse belief that companies should exist to enrich the wealthy shareholders at the expense of the workers and it’s put us dangerously close to a complete collapse of the social contract.

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

#87

Post by yieldcrv »

cammikebrown wrote: post #83
slashdave wrote: post #78

Inequity is a real thing, but I am confused about why the CEO of a company that consists primarily of low wage earners deserves a lower compensation for that reason alone. If you follow this logic to extremes, the compensation of a CEO of a company of a dozen people earning 100,000 should be higher than one with with tens of thousands of employees earning 30,000. Not all businesses are the same.

Even $30,000 is below minimum wage full time on the west coast. You’re not gonna be doing well at all making that.

which neither bolsters or negates the point.

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

#88

Post by beezle »

necubi wrote: post #47
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...

Buybacks are just a more tax-efficient way to issue dividends to shareholders (dividend issuance is a taxable event and at short-term rates, buybacks raise the stock price and those gains aren't taxable until you sell, at which point it may be long-term cap gains). It's reasonable to be upset about the fact that this is arguably a tax dodge! But all of the other criticism of buybacks apply equally to dividends which…

Until the mid-80s they were illegal except in a handful of unique cases. This is not just about div vs buyback taxes. Though there is no immediate mathematical economical benefit to the shareholders who remain, the markets have proven that the stock price will rise (and likely executive compensation) as a result of reduced sharecount vs the same demand (though possibly more demand as other companies engage in the same behavior).

Much of the gains in the stock market the past decade or so are simply the result of a greatly reduced number of shares available to purchase - as a result of buybacks, takeovers and going private (there are roughly 1/2 the number of listed companies today as in the 1990s).

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

#89

Post by echelon »

necubi wrote: post #47
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...

Buybacks are just a more tax-efficient way to issue dividends to shareholders (dividend issuance is a taxable event and at short-term rates, buybacks raise the stock price and those gains aren't taxable until you sell, at which point it may be long-term cap gains). It's reasonable to be upset about the fact that this is arguably a tax dodge! But all of the other criticism of buybacks apply equally to dividends which…

> Fundamentally this is the corporation saying it doesn't have a market-beating way to reinvest this capital, and it's giving the money back to its owners to more productively invest.

Before tech companies demonstrated the principle of infinite growth, the purpose of a company was to generate revenue (paid as dividends) for its shareholders.

So much growth hasn't really been possible before.

If a company can keep growing and investing infinitely, one might argue that it's time for the DOJ / FTC to step in and stop them from eating the entire business sector. That's the sign of a monopoly pushing into every market like an invasive species and making the existing businesses in those markets go extinct. Kind of like how tech companies are now movie companies, music companies, game companies, pharmaceuticals, grocery stores...

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

#90

Post by [deleted] »

necubi wrote: post #47
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...

Buybacks are just a more tax-efficient way to issue dividends to shareholders (dividend issuance is a taxable event and at short-term rates, buybacks raise the stock price and those gains aren't taxable until you sell, at which point it may be long-term cap gains). It's reasonable to be upset about the fact that this is arguably a tax dodge! But all of the other criticism of buybacks apply equally to dividends which…

[deleted]
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