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

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

#201

Post by missedthecue »

ninkendo wrote: post #174
missedthecue wrote: post #80

Earlier quoted context omitted.

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…

> The fundamental purpose of a buyback is not to raise the stock price. Make up whatever nonsense you want about the “fundamental purpose” of something, it doesn’t matter. The purpose of a system is what it does: https://en.m.wikipedia.org/wiki/The_purpose_of_a_system_is_w... Stock buybacks increase share price. There’s no reason to look any farther than that. The purpose of stock buybacks is what stock buybacks do.

They reduce sharecount. Not all buybacks increase share price. I can give you a thousand examples of massive buybacks that happened before the stock dropped considerably. But all reduce sharecount.

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

#202

Post by stemlord »

slashdave wrote: post #91
tw04 wrote: post #86

Earlier quoted context omitted.

What’s the motivation of the CEO to increase employee wages if his compensation isn’t tied to theirs? There’s this perverse belief that companies should exist to enrich the wealthy shareholders at the expense of the workers and it’s put us dangerously close to a complete collapse of the social contract.

The motivation? A healthy and productive workforce. The greater good. Not sure why you would tie pure compensation (a greedy concept) with goals that align exactly to the opposite.

>The motivation? A healthy and productive workforce. The greater good.

This is so outrageously naive

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

#203

Post by Waterluvian »

__turbobrew__ wrote: post #195
Waterluvian wrote: post #106

Earlier quoted context omitted.

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

Can you tell them to get rid of compounding interest while they are at it?

Sure. I’ll add it to the list.

I’m not sure if this is basically the same or just related to the first item, but I’m also going to make them also fix the bug where taking away 1/4 then adding 1/3 returns you to the same amount.

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

#204

Post by Workaccount2 »

timeattack wrote: post #189
Workaccount2 wrote: post #116

Earlier quoted context omitted.

Shareholders own the company. They are literally the owners of the company. Like anything you own. In the same way you own your house and pay a painter to paint it, the shareholders own the company and pay Nick to stamp boxes. I don't know of anyone who has had work done on their home, and then upon selling the home, went back to the painter and said "Here is your cut of the profit we made selling our house, thanks f…

Now, this painter works for your house exclusively every day 40 to 60 hours each week total, 2-5 years, and because of their work you sell house for 1,000x of the original price. You now go to live luxury life without need to ever work again, while painter continue their meager life painting another house 8 hours every day.

I would say that is a pretty dumb painter. Definitely wildly talented at painting, but incredibly unintelligent. Just paint the house like you were paid to.

You might think I was making an analogy, and hence tried to break it, but it wasn't an analogy. Its the same thing. You own something, you pay people to work on it, it's still all yours afterwards.

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

#205

Post by simonsarris »

sfifs wrote: post #197
simianwords wrote: post #169

Earlier quoted context omitted.

Yeah but why does the board approve those salaries if they don't expect to get more out of it?

What makes you think a typical corporate board actually acts in the interest of its shareholders?

??? Because the typical corporate board usually owns an awful lot of shares, and the c-suite is often largely paid in shares. The second part of this article is about stock buybacks for a reason. There is really no doubt that they are sensitive to shareholders here.

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

#206

Post by ethbr1 »

WalterBright wrote: post #171
csours wrote: post #25

I'm not sure how to phrase this, so please be patient and try to understand what I intend to say. CEO pay relative to median employee pay has soared since the 1970s. That is, a CEO may be paid $10,000,000 vs the median employee at $70,000 (arbitrary numbers), where before 1970 the numbers may have been $150,000 and $20,000 Using only one set of numbers can be deceiving though. For instance, through mergers and acquis…

Keep in mind that executive compensation is at the expense of the shareholders, not the workers.

Yes and no. Executive compensation, from one perspective, is the mechanism via which shareholders align executive behavior in their favor, to the detriment of workers.

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

#207

Post by claudiulodro »

bofadeez wrote: post #62
nostrademons wrote: post #8

It’s entirely possible that this is causal ABs deliberate, ie the reason why boards of these companies have approved large CEO pay packages is so that the CEO will align themselves with the shareholders paying them rather than the workers working for them and cut wages so the money can be returned to shareholders as buybacks.

Wages are not set by a company, they're set by the supply and demand of the market. Adding a minimum wage just criminalizes hiring anyone who is not productive enough to economically justify the minimum. It hurts unskilled poor people the most.

If people are working full time yet still in poverty, they will need government services like food stamps. In this scenario your tax dollars subsidize businesses that pay poverty wages. Wal Mart is the top employer of SNAP and Medicaid recipients. You would rather subsidize Wal Mart’s margins with your tax dollars?

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

#208

Post by tw04 »

koolba wrote: post #167
tw04 wrote: post #86

Earlier quoted context omitted.

What’s the motivation of the CEO to increase employee wages if his compensation isn’t tied to theirs? There’s this perverse belief that companies should exist to enrich the wealthy shareholders at the expense of the workers and it’s put us dangerously close to a complete collapse of the social contract.

> What’s the motivation of the CEO to increase employee wages if his compensation isn’t tied to theirs? Wages are a cost. Profits are revenue minus costs. Share price is driven by profits. The job of a CEO is to maximize share price. The only reason to raise wages is if you think it will lead to a net gain of profit during your tenure. Say do to efficiency or simply retaining better talent. There’s no gain for simply…

>The job of a CEO is to maximize share price.

It absolultely is not. That was an idea floated by Milton Friedman, and he was wrong with his ridicluous assertion. His justification wasn't even legally sound...

https://www.forbes.com/sites/stevedenning/2013/06/26/the-ori...

A CEOs job is to grow market share, increase the value of the company, and tend to its long-term health. All of which directly conflicts with "maximizing the share price" as we've seen time and time again with the corporate raider class.

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

#209

Post by hollerith »

tw04 wrote: post #208
koolba wrote: post #167

Earlier quoted context omitted.

> What’s the motivation of the CEO to increase employee wages if his compensation isn’t tied to theirs? Wages are a cost. Profits are revenue minus costs. Share price is driven by profits. The job of a CEO is to maximize share price. The only reason to raise wages is if you think it will lead to a net gain of profit during your tenure. Say do to efficiency or simply retaining better talent. There’s no gain for simply…

>The job of a CEO is to maximize share price. It absolultely is not. That was an idea floated by Milton Friedman, and he was wrong with his ridicluous assertion. His justification wasn't even legally sound... https://www.forbes.com/sites/stevedenning/2013/06/26/the-ori... A CEOs job is to grow market share, increase the value of the company, and tend to its long-term health. All of which directly conflicts with "maxi…

What is the difference in your mind between maximizing share price and "increase the value of the company"?

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

#210

Post by kacesensitive »

bruceb wrote: post #81
kacesensitive wrote: post #39

Earlier quoted context omitted.

Yeah no. Immigration’s impact on wages, especially in the long term, is not as straightforward as “less supply → higher pay.” Multiple studies from the U.S. National Academies of Sciences and leading labor economists find that immigration has only small effects on native-born workers’ wages, and in most cases boost overall wage growth by fueling demand, entrepreneurship, and innovation. Restricting immigration might…

"Immigration’s impact on wages, especially in the long term, is not as straightforward as “less supply → higher pay.” "Restricting immigration might reduce competition in some low-skill job markets, but it can also harm industries that rely on labor shortages being filled" So restricting immigration of low wage workers, would push up wages in low wage industries. Seems pretty clear.

You’re describing a narrow, short-run, partial-equilibrium effect. In the real world, general-equilibrium effects swamp it:

Cut low-wage immigration and you don’t just raise some hourly rates. You also shrink output, kill complementary jobs, and push prices up for everyone, which erodes those wage gains. The National Academies’ comprehensive review finds immigration’s impact on native wages is small overall and often positive for some groups, with clear long-run growth benefits. https://nap.nationalacademies.org/catalog/23550/the-economic...

Classic natural-experiment evidence like the Mariel Boatlift shows big low-skill inflows had essentially no hit to local low-skill wages. Labor markets adjust. https://davidcard.berkeley.edu/papers/mariel-impact.pdf

Meta-work by Peri and coauthors show across many settings, native wage effects are near zero, while immigration raises productivity and lets natives move up the job ladder. https://giovanniperi.ucdavis.edu/uploads/5/6/8/2/56826033/pe...

Recent CBO work attributes stronger labor-force growth and higher GDP to immigration. Reverse that and you get slower growth and upward price pressure that cancels your “clear” wage story. https://www.cbo.gov/publication/60569

So yes, if you freeze the rest of the economy in place, fewer workers can bid up some wages. Once you allow demand, complementarities, and prices to move, the simple “less supply → higher pay” slogan stops matching the data.

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