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Overpaid CEOs 2019

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Re: Overpaid CEOs 2019

#141

Post by tirumaraiselvan »

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…

> 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.

Most arbitrary people will crumble under pressure if they are given the experience of a CEO.

Re: Overpaid CEOs 2019

#142

Post by Mirioron »

maxxxxx wrote: post #84
heydonovan wrote: post #77

Earlier quoted context omitted.

You share the company's wealth by offering stock as part of compensation. This works well for the high earning tech employees, who can pay their bills with their first 100k and save the rest or invest it. It doesn't work as well for middle/lower class employees who need immediate cash instead of stocks that they can't always hold until it's worth more. Imagine working for Amazon back in the day for $30k, and come tim…

"I've always wondered what it would look like if were were paid in multipliers instead of salaries. The lowest would get 1x, middle folks 5x, and CEO maybe 20x. The usual "a rising tide lifts all boats" mindset." I like that idea!

Then you would get small companies and lose a lot of economies of scale. Would you rather be a CEO of a retailer of 100 employees or 1000000 employees? Your pay is going to be the same because cashiers in both companies will be paid roughly the same, meaning that maximum CEO pay will be the same.

I guess it would be neat to see an immense amount of small companies though.

Re: Overpaid CEOs 2019

#143

Post by Mirioron »

LitFan wrote: post #115
skookumchuck wrote: post #104

Earlier quoted context omitted.

Oh pooh, I as a lower/middle class employee got a lot of stock options. They were worthless because the company stock sank, but I liked getting the options, and if the company had been managed better I would have made much bank. > I'd wager most lower income folks would take the money, since that's food on the table. Instant gratification is a large reason why lower income folks stay poor. (As for "food on the table"…

>(As for "food on the table", lower income people "invest" in lottery tickets. They clearly do have discretionary income.) Low income people are desperate to get out of their situation because in a lot of cases, it's barely livable. The information in the article shows that they're largely correct; A disproportionate amount of compensation goes to a small number of people - and that amount is so skewed that it can't…

It's not so much about performance, but their impact (responsibility). If the CEO of a small mom and pop shop says something racist online then few people will care, but when the CEO of Papa John's said something racist 11% of the valuation of the company disappeared. That's on the order of $100 million. People might've been laid off because of this or more likely, people didn't get hired because of this.

Re: Overpaid CEOs 2019

#144

Post by Mirioron »

CoolGuySteve wrote: post #29
zdragnar wrote: post #16

Earlier quoted context omitted.

And yet, if you took Blizzard CEO's total pay (from the article, I think around $28 mil) and spread that over the nearly 10k employees, everyone gets an extra $3k, which wouldn't do diddly squat for retention. Also, losing 40% of growth would be pretty awful for anyone who has company stock (employees, 401ks, investors) especially if that's year over year.

A better question, and one that gets to the heart of why Blizzard's CEO is overpaid, is why do they need 10k people to make, distribute, and support a few video games? There are far, far more effecient video game studios/publishers out there. Nintendo manufactures and ships millions of hardware units in addition to producing/publishing games and they have fewer employees.

Because it takes a ton of people to offer support on video games. If you have millions of monthly players then you need a lot of employees to manage the community.

Re: Overpaid CEOs 2019

#145

Post by taurath »

freeflight wrote: post #88
goldcd wrote: post #75

Earlier quoted context omitted.

EA seems to be doing better - there's a few new things in there once you strip out Battlefield, Sims and the Sports stuff - but still.. ..For some reason I'd still thought the big publishers were some massive force of nature, crushing all in their path. We could stand on the side-lines booing their latest monetization strategy, but I'd still considered them to be invincible monsters. I'd imagined I'd see a list of a…

> We could stand on the side-lines booing their latest monetization strategy, but I'd still considered them to be invincible monsters. I think that's been falling apart for a while now due to fan backlash. Activision has never been very popular, now Blizzard fans have finally gotten the message that they are one and the same, reacting in overblown ways to mobile announcements. EA struggles from the same reputation is…

The big guys got addicted to the “stamp” AAA games over the last 15 years and their competitors are eating their lunch in terms of gameplay. They have tons of resources and could pivot to making just plain great games but probably not sustain the sheer buckets of guaranteed money their investors priced into their stock ticker. Monetizaion strategy is all Wall Street wants to hear about during product announcements, and players are listening for it so they know not to go.

Of course, massive amounts of games are still being sold. Just competition is taking a big bite out of them.

Re: Overpaid CEOs 2019

#147

Post by eanzenberg »

_cs2017_ wrote: post #107

If EA Board could snatch a CEO they like for $5M/year, they would. So why don't they? I'm sure there are thousands of professional managers with solid game industry experience who'd be ecstatic to be offered a CEO position in either company at $5M / year or less. The Board clearly think they are not good enough, and limit their candidate search to people with very special credentials (e.g., those who've served as top…

This is pretty much the right answer in a sea of nonsense and angry comments here. CEO pay is where it is because those boards believe it’s necessary. If they thought they could pay 5mm instead of 20mm they would in a heartbeat.

Re: Overpaid CEOs 2019

#148

Post by ryandrake »

munk-a wrote: post #43
jlawson wrote: post #18

Earlier quoted context omitted.

I just want to point out a mathematical error in your post. You said, "nobody is 100x more efficient than anyone else". This is a reasonable (though not strictly true) statement by itself. But the implication is wrong - nobody needs to be 100x more efficient/effective to justify a 100x pay differential. Consider an example: * Company earns 1 billion per year. * Normal-Person will increase profits 5%. * Super-Exec wil…

My point is that hiring someone more effective for that position may increase revenues but there is nothing inherent in that effective person that is yielding an additional 50$ million in profits that a normal person couldn't come out with a yield of 40 or 45 million. This is a conflation between an important position (being able to resolve disputes and push decisions and direction) and being an important person. CEO…

> CEOs have skills, and have invested heavily in training those skills (if they aren't terrible) but those skills are not skills unattainable to the normal person

This is an understatement. I'd wager that the average fresh graduate of a decent two-year MBA program has all the raw knowledge and business skills required to be the CEO of 90% of companies out there. What they do is not rocket science. The reason all of us are not CEOs is not that it's impossibly challenging or specialized, it's simply that there is only one per company and there are more people than companies. It's a small tent and not everyone can fit under it.

I've met senior executives who I considered brilliant and wise beyond belief, and I've met senior executives who I'm surprised could even tie their own shoes or back out of their driveway without running over their mailbox. There's no correlation with pay or prestige. They're all rich and beyond the point where career failure is possible, purely due to the rung of the ladder they happened to land on.

Re: Overpaid CEOs 2019

#149

Post by smallgovt »

munk-a wrote: post #43
jlawson wrote: post #18

Earlier quoted context omitted.

I just want to point out a mathematical error in your post. You said, "nobody is 100x more efficient than anyone else". This is a reasonable (though not strictly true) statement by itself. But the implication is wrong - nobody needs to be 100x more efficient/effective to justify a 100x pay differential. Consider an example: * Company earns 1 billion per year. * Normal-Person will increase profits 5%. * Super-Exec wil…

My point is that hiring someone more effective for that position may increase revenues but there is nothing inherent in that effective person that is yielding an additional 50$ million in profits that a normal person couldn't come out with a yield of 40 or 45 million. This is a conflation between an important position (being able to resolve disputes and push decisions and direction) and being an important person. CEO…

> Their decision is important, but their involvement isn't worth the full value the company receives based on making that decision

CEO's don't get anywhere near the full value the company receives based on the decisions they make.

The average S&P 500 corporation is worth $45B and grows earnings by 10% each year. The average S&P CEO gets paid $13.5 million dollars.

Re: Overpaid CEOs 2019

#150

Post by smallgovt »

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…

I don't think you're groking the economic value of large corporations. CEO's don't get all the pie or anywhere near the full value the company receives based on the decisions they make.

The average S&P 500 corporation is worth $45B and grows earnings by 10% each year. The average S&P CEO gets paid $13.5 million dollars.

It's reasonable to expect a great CEO to grow earnings by 1% more than their average counterpart. If so, they are responsible for $450M/yr of value creation. $13.5M is a small fraction of $450M.

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