CEO pay and stock buybacks have soared at the largest low-wage corporations • Hacker News Board

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

#101

Post by tracker1 » Thu, Aug 21, 2025, 11:13 PM UTC

01HNNWZ0MV43FF wrote: post #65

LordDragonfang wrote: post #46

So perhaps someone can explain something to me. One of the main problems I see with modern Corporatism is that "shareholders" have too much influence over companies, driving them to make choices that erode long-term customer trust and brand value in return for short-term gains. (This is rational from the investor POV, because they can sell their stake at any point and still have made a profit on the dead husk of a co…

I think what I've heard is: The buyback is part of a larger scheme where execs / board members can pump the price of the stock, and then make themselves money either through bonuses tied to rising stock prices, or through dumping their own shares once the market price goes up. https://en.wikipedia.org/wiki/Share_repurchase#Criticism The vibe is that there's a vicious cycle of "Customers are not brand-loyal, let's mak…

I think this "lemonade stand" effect is where a lot of companies are staying privately funded as opposed to ever going IPO... it's such a slippery slope to the bottom in that you lose control over doing what you feel is best for the company (or society) in favor of maximizing shareholder value.

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

#102

Post by fakedang » Thu, Aug 21, 2025, 11:13 PM UTC

01HNNWZ0MV43FF wrote: post #48

fakedang wrote: post #29

Earlier quoted context omitted.

Because the "talent" in this case is a commodity. Most of the low-wage corporation's employees tend to be front-of-house customer facing staff or brown-collar labor, which in most cases does not require any special skill set, nor rewards exceptional talent in most companies. Jobs that are easily replaceable and does not require a degree holder. Ironically, one of the few places I've seen that actually rewards employe…

Brown collar? All I found for that is military https://en.wikipedia.org/wiki/Designation_of_workers_by_coll...

Ahh, perhaps I was taught wrong. We used to be taught where I'm from that brown-collar meant dirty industries (including black-collar jobs in the above list such as oil-drilling, etc) and agriculture, while blue collar meant a step more technical but still did not require a college education (home technicians, factory jobs, delivery personnel, etc.).

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

#103

Post by [deleted] » Thu, Aug 21, 2025, 11:14 PM UTC

Aunche wrote: post #95

I'd likely be progressive if American progressivism wasn't so economically illiterate (as opposed to say Piketty). The vindictive themes make me think that it's motivated more by envy than a genuine desire to improve society. The CEO to worker compensation ratio is a useless metric. There is absolutely no reason why Starbucks should be punished for hiring more workers over a company like Nvidia that hires relatively…

[deleted]

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

#104

Post by layman51 » Thu, Aug 21, 2025, 11:15 PM UTC

m00x wrote: post #69

goyagoji wrote: post #4

Earlier quoted context omitted.

[flagged]

As a French, it's funny seeing references to the French revolution as some kind of rebellion against the rich. Most people don't realize that the revolution was led by the nouvelle bourgeoisie ( new nobles) who were tired of paying taxes to the royals. They sacrificed thousands of commoners to reach their goals akin to how Russia is sending in soldiers into the meat grinder, and France was a much worse place afterwar…

Yes, but this is the nature of heroic figures in politics: “I’m from the elite and I’m here to save you from these other elites.” Who gets to determine whether it’s called a “revolution” versus a “civil war”? Is it based on whether there’s a concerted effort of manipulation? Even the popular figures who we think of as grassroots leaders are elite in some sense.

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

#105

Post by missedthecue » Thu, Aug 21, 2025, 11:15 PM UTC

simoncion wrote: post #82

missedthecue wrote: post #74

Earlier quoted context omitted.

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...

Performance pay that requires you to hit multiple metrics over a number of years, metrics you may or may not hit, due to unpredictable factors within and outside of your control, is not comparable to guaranteed wage income in a single year.

That's my point. Their CEO has a W-2 salary and cash bonus. It is about $5m a year. They should use that. We all know the reason they pull forward the next 3 years of maybe money and compare it against a part-time barista's single year pay. Because it juices the ratio and makes for a more outrageous headline. But it's dishonest. Starbucks CEO is not paid $98m per annum.

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

#106

Post by Waterluvian » Thu, Aug 21, 2025, 11:16 PM UTC

chronia739 wrote: post #99

missedthecue wrote: post #96

Earlier quoted context omitted.

The dividends aren't stolen. A company with 1m shares outstanding buys back 100k of them. Now there are 900k shares outstanding. All long term shareholders who support the company own an extra 10% of the firm with nothing out of pocket. Imagine steady buybacks at reasonable prices over a long period of time... this has an incredible effect. Warren Buffett bought a couple percent of American Express, and now owns 22%…

> All long term shareholders who support the company own an extra 10% of the firm with nothing out of pocket. They own an extra 11%. Not 10%. 1/100 versus 1/90

I hate how fractions work this way. We need to call up the math people and ask them to change it.

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

#107

Post by kingstnap » Thu, Aug 21, 2025, 11:16 PM UTC

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…

Slight correction.

If they buy back x, it strengthens shares by 1/(1-x)

So if they buy back 50%, remaining shareholders have 2x ownership.

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

#108

Post by stickfigure » Thu, Aug 21, 2025, 11:17 PM UTC

beezle wrote: post #92

missedthecue wrote: post #22

Earlier quoted context omitted.

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,…

If one does not think that buy backs are good to begin with, making them as difficult as possible (as was the case before the mid 80s) is preferable to the situation today.

As has been pointed out elsewhere, buybacks are morally equivalent to shareholder dividends; the only effective difference is the tax treatment.

If you think returning money to investors is bad, I have to ask: Why would anyone invest in the first place?

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

#109

Post by JKCalhoun » Thu, Aug 21, 2025, 11:17 PM UTC

JumpCrisscross wrote: post #32

FollowingTheDao wrote: post #18

Earlier quoted context omitted.

[flagged]

> self corrects with pitchforks. Does no one read history anymore? The elites after the French Revolution were not only mostly the same as before, they escaped with so much money and wealth that it’s actually debated if they increased their wealth share through the chaos [1]. Like, in the country today, which wealth constituency is most pushing for overthrowing our republic? [1] https://www.jstor.org/stable/650023

And a few of them, of course, lost their heads.

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

#110

Post by johnecheck » Thu, Aug 21, 2025, 11:18 PM UTC

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.

No, large tech companies are not paying out tens of billions of dollars to the average worker.

Did you mean that tens of billions of dollars are going to ALL the tech workers combined? True, but a single absolute number means little when the conversation is about relative distribution of resources and how those numbers change over time.