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Aetna CEO Set to Reap About $500M If CVS Deal Closes

wsj.com

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Re: Aetna CEO Set to Reap About $500M If CVS Deal Closes

#151

Post by bkanber »

dmode wrote: post #147

Not sure if people know, but corporate compensation is rigged in the US. It is mostly determined by a compensation committee appointed by the board, and consisting of members of the same oligarchy. By contrast, CEOs in other countries don't make such obscene numbers

> By contrast, CEOs in other countries don't make such obscene numbers

By contrast, companies in other countries don't make such obscene numbers. Don't forget that our economy eclipses everyone else's. Our economy is on par with the entire EU's, and is still larger than China's which has several times our population.

Re: Aetna CEO Set to Reap About $500M If CVS Deal Closes

#152

Post by bkanber »

chasing wrote: post #38
thevardanian wrote: post #28

Earlier quoted context omitted.

Say I start building a house. I realize I can't do it all by myself, so I get other people to do all the labor involved in building it. All the while providing all the details, instructions, and architectural guidelines to get a good finished product. Not to mention sourcing the materials required, getting the plans approved by the city, and making sure that on-sight construction passes inspection by the city. Who "o…

Aetna's CEO is an employee of Aetna. So in your tale he's part of the labor, not the person who wants a house built.

Aetna's CEO is not an employee of Aetna, he is an Officer of the corporation.

Re: Aetna CEO Set to Reap About $500M If CVS Deal Closes

#153

Post by jimbokun »

bkanber wrote: post #149
jimbokun wrote: post #142

Earlier quoted context omitted.

"Had the company declined, the CEO would have gotten all the blame and been crucified." Hahaha, that's a good one. The CEO would get a golden parachute payout and move onto another highly paid position.

If you want a golden parachute like that, then you also need to be one of the top 500 or 1000 sought-after CEOs in the country. Just like if you want a pro footballer's (NFL) salary, you need to be one of the top 1500 players. Software engineers like me and (probably) you don't get golden parachutes because we're not one in 500, we're one in a million.

Football players are good comparison. If they don't play well, they are just cut and not paid anything. No "golden parachutes" for poor performance.

Re: Aetna CEO Set to Reap About $500M If CVS Deal Closes

#154

Post by maxerickson »

bkanber wrote: post #150
maxerickson wrote: post #143

Earlier quoted context omitted.

You are begging the question. First you have to prove that the CEO market is efficient. Then you can praise the free hand.

All free and competitive markets are taken to be efficient. In a market where a million wannabe-CEOs are vying for one of the top 500 spots, you get tough competition and the compensation is commensurate with the level of competition.

Lots of people willing to do the job should drive down the compensation.

High compensation is partly a result of businesses choosing from a small pool of candidates...

Re: Aetna CEO Set to Reap About $500M If CVS Deal Closes

#155

Post by bkanber »

maxerickson wrote: post #154
bkanber wrote: post #150

Earlier quoted context omitted.

All free and competitive markets are taken to be efficient. In a market where a million wannabe-CEOs are vying for one of the top 500 spots, you get tough competition and the compensation is commensurate with the level of competition.

Lots of people willing to do the job should drive down the compensation. High compensation is partly a result of businesses choosing from a small pool of candidates...

Willing, but not able. There are lots of people willing to be astronauts and NFL players too. The small pool represents the top performers, and that's where the competition is.

Re: Aetna CEO Set to Reap About $500M If CVS Deal Closes

#156

Post by bkanber »

jimbokun wrote: post #153
bkanber wrote: post #149

Earlier quoted context omitted.

If you want a golden parachute like that, then you also need to be one of the top 500 or 1000 sought-after CEOs in the country. Just like if you want a pro footballer's (NFL) salary, you need to be one of the top 1500 players. Software engineers like me and (probably) you don't get golden parachutes because we're not one in 500, we're one in a million.

Football players are good comparison. If they don't play well, they are just cut and not paid anything. No "golden parachutes" for poor performance.

They do get golden parachutes. If you're a pro football player and you get benched in game 1 with a season-ending injury, you still get paid. If you get cut for poor performance before your contract's guaranteed payout is paid, you still get that money. That is the golden parachute.

Re: Aetna CEO Set to Reap About $500M If CVS Deal Closes

#157

Post by bkanber »

jimbokun wrote: post #144
bkanber wrote: post #137

Earlier quoted context omitted.

> Huge upside with limited downside From your perspective, sure, especially if you're only considering financial downside. There are huge non-financial downside risks, like staking your personal reputation on the performance of the 50,000 person company that you're running. Maybe you don't personally care about those other risks, but CEOs in that position do. > encourages reckless risk taking Not all CEOs take reckle…

"There are huge non-financial downside risks, like staking your personal reputation on the performance of the 50,000 person company that you're running." That doesn't actually happen. CEOs get golden parachutes and move on to high paid jobs somewhere else when their company does poorly.

What about my other points?

Re: Aetna CEO Set to Reap About $500M If CVS Deal Closes

#158

Post by downandout »

zentiggr wrote: post #93
downandout wrote: post #74

Paywall bypass: https://m.facebook.com/flx/warn/?u=https%3A%2F%2Fwww.wsj.com...

Yeah, from paywall to worse. NBD

I’m genuinely confused by this response. All that URL does is have you click from Facebook, which makes FB the referrer, which WSJ has anointed a paywall free zone.

What am I missing?

Re: Aetna CEO Set to Reap About $500M If CVS Deal Closes

#159

Post by yequalsx »

rukittenme wrote: post #124
yequalsx wrote: post #121

Earlier quoted context omitted.

Yes, categorically. If Aetna signs an agreement to pay health expenses and fails to follow through they face three major consequences: - They can be sued for breach of contract. - They can lose market power as their brand loses public trust. - They can face fines from government regulators. I think you are ignorant about how things work in the U.S. There haven't been strong regulators for quite some time. The average…

> It is well documented that health insurance companies hire people to look for loopholes. To delay and ultimately try to deny coverage. This is not disputable. Everything you said before this point is irrelevant. It's trivial to find the list of lawsuits lost and fines paid[1]. Read this excerpt: > In 1999 a California jury awarded $116 million in punitive damages to the widow of a man whose death from stomach cance…

The case was then settled out of court for an undisclosed amount that was reported to be around $20 million.

I know a medical malpractice attorney. He only takes cases he is absolutely sure to win. The gray areas he leaves alone. It is in these gray areas that insurance companies mostly try to get away with paying claims.

What I wrote prior was not irrelevant. You have a naive view of how markets work in the U.S.

Re: Aetna CEO Set to Reap About $500M If CVS Deal Closes

#160

Post by rukittenme »

yequalsx wrote: post #159
rukittenme wrote: post #124

Earlier quoted context omitted.

> It is well documented that health insurance companies hire people to look for loopholes. To delay and ultimately try to deny coverage. This is not disputable. Everything you said before this point is irrelevant. It's trivial to find the list of lawsuits lost and fines paid[1]. Read this excerpt: > In 1999 a California jury awarded $116 million in punitive damages to the widow of a man whose death from stomach cance…

The case was then settled out of court for an undisclosed amount that was reported to be around $20 million. I know a medical malpractice attorney. He only takes cases he is absolutely sure to win. The gray areas he leaves alone. It is in these gray areas that insurance companies mostly try to get away with paying claims. What I wrote prior was not irrelevant. You have a naive view of how markets work in the U.S.

It is irrelevant. You're talking about oil spills in Nigeria. I'm talking about one specific health-care company in America. I don't care to hear your opinions on the market and how it operates. I also don't care to hear anecdotal testimony about your friend's business practices.

It is a matter of public record when Aetna has been fined and when Aetna has been sued. It is trivial to research the subject.

I'm not sure why we're still having this conversation. Aetna's P/E ratio is 50% higher than the market average which means its price (and therefore CEO bonus) are driven by future growth potential. Not profit "extracted" in the here and now.

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