and to be one of those CEOs, you have to be a special kind of crook...
Overpaid CEOs 2019
191–200 of 203 posts
Re: Overpaid CEOs 2019
#192As a data point:
”U.S. CEOs earn from 400 to 500 times the median salary for workers. For CEOs in the U.K., the ratio is 22; in France, it's 15; and in Germany it's 12.”
Re: Overpaid CEOs 2019
#193Earlier quoted context omitted.
> 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.
given how poor the correlation is between ceo pay and performance, this isn't clear.
Re: Overpaid CEOs 2019
#194Earlier quoted context omitted.
CEO's dont set their own comp unless it's a small private company, and those are unlikely to be paying millions.
True, but also a myopic understanding of what actually goes on. Who do you think actually serve on the boards? The answer is other executives. And so there's the all too common situation where pay raises and golden parachutes are essentially quid pro quos.
That situation would require 2 people to have alternate roles at the same companies which is incredibly rare, if not already prevented in the corporate bylaws.
Many board members are in entirely different industries and sectors and some only serve exclusively on boards. Many others are investors whose money is being used to pay those executives. There's also a layer of shareholders above the board and voting is required for all major decisions.
It's not as simple as you make it out to be.
Re: Overpaid CEOs 2019
#195The 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
That experience takes decades of results to earn which is precisely why they're worth so much. Of course it's meaningless if you can magically train anyone else that easily.
>> at most lose the company 40% of growth/whatever
That would put most companies out of business. Would you like your employer to lose 40% of their staff?
>> nobody is 100x more efficient than anyone else
Yes they are, you just haven't worked with them. The networks and wisdom the top people build up is what helps them lead companies and make decisions for 1000s of employees with billions at stake. What they can do with a few phone calls can easily surpass the output of 100 startups.
This article is also talking about the TOP companies which obviously requires top talent. This is nowhere near the average and these salaries reflect the immense stress and responsibility that comes with the job. If you think you can lead a company this large that easily then you really do not understand what the position entails.
Re: Overpaid CEOs 2019
#196Earlier quoted context omitted.
I’ve always wondered: if CEO pay was truly tied to their “creating value” then shouldn’t they lose money if they destroy value? If the answer is yes, then why aren’t bad CEOs losing money? If the answer is no, then why do we pretend they are paid in proportion to the value they create?
In many cases, the lion's share of C-level pay is not straight up cash, but equity. They might still make money if they destroy value, but the better they do for the company, the better they do for themselves. That's what you're looking for, right? Better still, that stock compensation isn't really paid for by the company. The costs of paying with equity accrue to shareholders in the form of dilution.
That's why I was careful to scope my complaint to performance-independent pay.
Re: Overpaid CEOs 2019
#197I believe CEOs are compensated what they are in order to get them thinking like “owners” which many “professional” CEOs are not ultimately. Mark Zuckerberg, Steve Ballmer, Gates, Jobs don’t/didn’t need large salaries because their identities were tied to their companies. Owners eat sleep and breath their company in a way the average salaried employee plucked at random from +10,000 employee company will not. To the po…
This is actually pretty insightful, and it leads to an interesting question: If CEO pay is a rational outcome of protecting the equity in a company, and CEO pay is too high, does that mean there's "too much" equity? There's some evidence that income inequality is bad for society in some ways, which I tend to agree with if it means inefficient/uneven distribution of resources/opportunities/community investments. In th…
Too high in what sense? Just too high in absolute dollars? Equity is not the same as cash; its a gamble: you're willing to pay a certain amount of money for something that you're betting will increase (or at least hold) value.
Re: Overpaid CEOs 2019
#198Earlier 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…
The fundamental wrong assumption at the heart of your approach here is: The idea that people "should" be paid according to some measure of their moral worth or moral deservingness.
But when people meet to voluntarily make economic exchanges, they don't look at each others' moral deservingness; they look at where they can benefit economically.
Re: Overpaid CEOs 2019
#199Earlier quoted context omitted.
> I think it just boils down to the fact that humans sort of instinctively (or maybe culturally?) like the idea of royalty. Until they don't: https://en.wikipedia.org/wiki/French_Revolution
The history of France right after the revolution invalidates this. Napoleon happened. And there was a restoration of the monarchy for a while.
And after the restoration of the monarchy, there was a short republic, then another autocrat, Napoleon III with the second empire.
Re: Overpaid CEOs 2019
#200Earlier quoted context omitted.
many companies have instant acceleration on change of control, with regard to the vesting point.
never ever heard of this for IPO
This is at least pretty common in Canada, options are set to vest on a schedule but all future agreed upon options will vest if the company is sold/goes public/what have you.