Overpaid CEOs 2019 • Hacker News Board

Re: Overpaid CEOs 2019

#131

Post by dang » Sat, Feb 23, 2019, 4:05 AM UTC

Flott wrote: post #118

This is the source cited in the article here https://news.ycombinator.com/item?id=19229502 I think the article is interesting enough to have it's own discussion.

You're right that that should be the URL. "Please submit the original source. If a post reports on something found on another site, submit the latter." (https://news.ycombinator.com/newsguidelines.html)

But it doesn't make sense to have two threads about this on the front page, so we'll merge them. I guess I'll merge the comments from that one into this one as a crude form of karma sharing.

Re: Overpaid CEOs 2019

#132

Post by dade_ » Sat, Feb 23, 2019, 4:06 AM UTC

davesque wrote: post #17

munk-a wrote: post #4

The CEO (and upper management in general) pay scale is total BS when viewed through normal compensation lenses, unlike normal people who are paid for their time, upper management is usually compensated on performance -but- they are compensated on the performance of their company (or division) and they get all the pie. Since nobody else's pay is scaling with performance (outside of bonuses which in my experience usual…

Part of OP's point though is that CEO pay is apparently not tied to performance because CEOs still get astronomical pay really regardless of whether or not their company/division performs well. So CEOs just get paid more period. And there's this funny set of myths as to why that is the case. In reality, I think it just boils down to the fact that humans sort of instinctively (or maybe culturally?) like the idea of ro…

Correct. They get paid what they do because they set their own compensation. Performance has nothing to do with it, unless things get so bad they are removed.

Re: Overpaid CEOs 2019

#133

Post by jjtheblunt » Sat, Feb 23, 2019, 4:08 AM UTC

I think it's hard to find a more flagrant exploitation of overcompensation than that of Angela Ahrendts at Apple: given something like $70 million to join, quitting 4 years to the week after starting, as if just used Tim Cook's good will to profit, disgusted many of us hardcore engineers when hired that compensation saw someone with no technical history so rewarded.

Re: Overpaid CEOs 2019

#134

Post by Mirioron » Sat, Feb 23, 2019, 4:10 AM UTC

perfmode wrote: post #119

system2 wrote: post #116

Why would anyone care about how much CEOs make? It is private industry, if the board or owner wants to pay, CEOs get paid. It is not like they are stealing tax payer's money to pay these people. When the CEOs expire, they are also replaced. It is called business.

What’s behind the growing ceo to employee income ratio?

These kinds of articles like to play tricks to paint a narrative. Take this paragraph for example:

>Yet overall CEO pay continues to increase. According to Institutional Shareholder Services (ISS) the average pay for a CEO in the S&P 500 grew from $11.5 million in 2013 to $13.6 million in 2017.

Notice how it says "overall CEO pay" but then goes on to cite statistics for the average CEO of an S&P 500 company? It's a very common tactic whenever CEO compensation is discussed.

CEO pay is increasing for these companies though and one reason for it is that these companies are becoming bigger and bigger. This means that a CEO is responsible for more people and companies want more qualified candidates for that. Meanwhile the median employee usually doesn't have additional responsibility compared to the past.

Let's look at Walmart and a corner store. The clerk working at Walmart and the clerk working at a corner store roughly have the same responsibilities. On the other hand, the CEO of the corner store is responsible for 5 employees, but the CEO of Walmart is responsible for 2 million employees and this responsibility is growing.

Edit: I'm not saying that this explains the entire difference, but it's definitely one part of it.

Re: Overpaid CEOs 2019

#135

Post by plainOldText » Sat, Feb 23, 2019, 4:14 AM UTC

ahelwer wrote: post #5

Software engineer unions are coming, and it will start with the games industry. Attitudes within our field are changing! Used to be you couldn't mention the U-word without a dozen engineers jumping down your throat bellowing about "efficiency" (for whom and what?) but engineers are smart and you can only fool them with the same old anti-union propaganda for so long.

Another thing you can't fool is the market. And the market will adapt, as it always does, and unlike say, the labor performed by employees of movie studios, software development doesn't necessarily require physical presence to successfully complete the tasks, and thus I suspect plenty of jobs will be outsourced to other places with cheaper and more flexible labor forces. Perhaps we will see new game studios popping up in other countries.

And although still considerable, the U.S. doesn't have the same competitive advantage in software anymore. The market is now global - e.g. in 2018 38.5% of StackOverflow traffic for top 30 countries came from Asia-Pacific, while only 32.9% from North America.

Re: Overpaid CEOs 2019

#136

Post by TylerE » Sat, Feb 23, 2019, 4:20 AM UTC

tertius wrote: post #129

TylerE wrote: post #126

Earlier quoted context omitted.

Actually, aren't they literally stealing tax payer money? Inflated salary = lower profits = less net income = less tax?

The CEO is paying higher taxes than the corporation. (You limited it to salary.) So in your example no, more taxes actually.

Wouldn't that depend on the actual compensation? If it's mostly stock there are all kinds of capital gain games that can be played, no?

Re: Overpaid CEOs 2019

#137

Post by stickfigure » Sat, Feb 23, 2019, 4:25 AM UTC

munk-a wrote: post #53

B-Con wrote: post #32

Earlier quoted context omitted.

I don't like the word "efficient" in contexts like this, I prefer "effective". Yes, some people are simply 100x more effective than others.

In three days you can accomplish what someone else (assuming they had training on par with what you received) would take a year to do? Assuming you step in and out of the office four times a day, do you think it's reasonable to hire someone solely to open and hand you an umbrella when you leave the office and take it from you when you return as a fair trade to the minute you might spend fiddling with the umbrella cov…

In three days you can accomplish what someone else ... would take a year to do?

Sure, why is this surprising? There's no hard limit to incompetence. A bad CEO can sink the ship; a bad manager can destroy the team; a bad product manager can make the product useless; a bad engineer might never deliver on any timescale. Hell, even a bad janitor could burn down the building.

"Training" is just not a very good metric of skill or value. If it were, they'd hire CEOs straight out of college.

Re: Overpaid CEOs 2019

#138

Post by Mirioron » Sat, Feb 23, 2019, 4:34 AM UTC

cronix wrote: post #25

simplecomplex wrote: post #13

Everyone is free to be a CEO. If salaries are really too high it should be easy to get a CEO position by undercutting everyone else. It’s easy to sit on the sidelines and complain other people are making too much money. Remember that CEOs making less wont result in employees making more. Maybe it’s just me, but HN lately seems dominated by whiny/complaining articles that don’t really contribute any knowledge or enhan…

People are also free to vote for people like Ocasio-Cortez, who are more than willing to take it from the top as it continues to spiral out of whack. You can only displace the bottom for so long, until they get fed up enough and vote for radical change, or worse. That's probably not what most want, myself included, but here we are going from 20:1 in the 70's to 300:1. How far do you think that can reasonably keep til…

>People are also free to vote for people like Ocasio-Cortez

She got elected because of the primary. She isn't exactly a vote magnet.

>That's probably not what most want, myself included, but here we are going from 20:1 in the 70's to 300:1.

You are fed a narrative. There are people actively working against capitalism that will try to craft a narrative at every turn. Think critically about what you just said:

CEO-to-worker pay ratio has gone from 20:1 to 300:1 in top firms in the US. That last part is very important. The evaluation of those companies has increased as has the average number of employees. The CEO of Walmart needs much better skills compared to the CEO of a corner store. Walmart has over 2 million employees nowadays and they have a revenue of $500 billion. On the other hand, the skills and responsibility required from a clerk at Walmart are similar to the responsibilities and skills of a clerk at the corner store.

>Something reasonable needs to give here,

People need to stop buying into a narrative.

>and the answer isn't everybody becoming a CEO.

The reason he brought up everybody becoming a CEO is because the job of a CEO of these top companies is very difficult. You need very skilled people that are also very positive towards the company, because even the smallest mistakes by them can make the company suffer a lot of losses.

Re: Overpaid CEOs 2019

#139

Post by Mirioron » Sat, Feb 23, 2019, 4:36 AM UTC

hnbroseph wrote: post #67

simplecomplex wrote: post #13

Everyone is free to be a CEO. If salaries are really too high it should be easy to get a CEO position by undercutting everyone else. It’s easy to sit on the sidelines and complain other people are making too much money. Remember that CEOs making less wont result in employees making more. Maybe it’s just me, but HN lately seems dominated by whiny/complaining articles that don’t really contribute any knowledge or enhan…

> Everyone is free to be a CEO. this is such a thoroughly trivial and simplistic observation, that it contains basically zero useful information.

He's saying that everybody can run their own business. If it's so easy as people try to make it out to be, then why doesn't everybody do it? The answer is that it is too difficult. He's trying to make people realize why these top CEOs are paid so much.

Re: Overpaid CEOs 2019

#140

Post by Mirioron » Sat, Feb 23, 2019, 4:43 AM UTC

munk-a wrote: post #4

The CEO (and upper management in general) pay scale is total BS when viewed through normal compensation lenses, unlike normal people who are paid for their time, upper management is usually compensated on performance -but- they are compensated on the performance of their company (or division) and they get all the pie. Since nobody else's pay is scaling with performance (outside of bonuses which in my experience usual…

>their salaries end up inappropriate scaled into the stratosphere because the company's performance justifies increasing compensation to employees to retain them and sustain that performance.

You're looking at the compensation for CEOs at top firms. If a CEO does poorly then the company stops being a top firm and falls out of this consideration. Meanwhile every large company has good and bad average employees. Them doing poorly doesn't sink the company.

>Take an arbitrary dude off the street and give them the experience of a CEO and I bet you that substituting him in would at most lose the company 40% of growth/whatever.

And then you replace the rest of upper management in the same way and you won't have a company left. Also, 40% for these companies is a hell of a lot more than what these CEOs are paid.