361–370 of 543 posts
What I don't get about CEO compensations is, do they even work? Like I get that you're a high impact person and you should have the proper incentives to lead the company in the right direction, but do the crazy compensations actually achieve that? Like is there any difference between $100M and $200M? Both of those numbers are way higher than anyone and their children can use in their entire lifetimes, why do you even…
"Too often, executive compensation in the U.S. is ridiculously out of line with performance. That won’t change, moreover, because the deck is stacked against investors when it comes to the CEO’s pay. The upshot is that a mediocre-or-worse CEO – aided by his handpicked VP of human relations and a consultant from the ever-accommodating firm of Ratchet, Ratchet and Bingo – all too often receives gobs of money from an ill-designed compensation arrangement.
Take, for instance, ten year, fixed-price options (and who wouldn’t?). If Fred Futile, CEO of Stagnant, Inc., receives a bundle of these – let’s say enough to give him an option on 1% of the company – his self-interest is clear: He should skip dividends entirely and instead use all of the company’s earnings to repurchase stock.
Let’s assume that under Fred’s leadership Stagnant lives up to its name. In each of the ten years after the option grant, it earns $1 billion on $10 billion of net worth, which initially comes to $10 per share on the 100 million shares then outstanding. Fred eschews dividends and regularly uses all earnings to repurchase shares. If the stock constantly sells at ten times earnings per share, it will have appreciated 158% by the end of the option period. That’s because repurchases would reduce the number of shares to 38.7 million by that time, and earnings per share would thereby increase to $25.80. Simply by withholding earnings from owners, Fred gets very rich, making a cool $158 million, despite the business itself improving not at all. Astonishingly, Fred could have made more than $100 million if Stagnant’s earnings had declined by 20% during the ten-year period.
Fred can also get a splendid result for himself by paying no dividends and deploying the earnings he withholds from shareholders into a variety of disappointing projects and acquisitions. Even if these initiatives deliver a paltry 5% return, Fred will still make a bundle. Specifically – with Stagnant’s p/e ratio remaining unchanged at ten – Fred’s option will deliver him $63 million. Meanwhile, his shareholders will wonder what happened to the “alignment of interests"
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Chrome is sitting near all-time highs in market share: https://www.statista.com/statistics/268254/market-share-of-i... . Search hovers around ~90% for the last several years: https://gs.statcounter.com/search-engine-market-share Google Cloud is growing faster than Azure & AWS for the last few years: https://www.statista.com/statistics/967365/worldwide-cloud-i... . Cloud was at ~4% market share 5 years ago, now it's a…
Except how profitable is Google's cloud? It lost 480 million last quarter. AWS made 5.2B last quarter. Google is selling at cloud at a loss to gain market share while it's biggest competitor is raking in profit. Sure, you can burn money and gain market share. But would anyone pick Google for a long term partner on any product? I sure as hell wouldn't. They have a tendency to simply discard products left and right. Th…
Sundar is an example of what happens when you promote from within and rule out anyone with enemies. You get nice guys whom everyone "likes." The comment about sociopathic almost-CEO's is spot on. Tony, Andy, Anthony, and Vic all would have been terrible CEO's. On the other hand, Bill Coughran, Alan Eustace, Udi Manber, or Patrick Pichette would have been decent, at the very least. Maybe even very good.
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The definition of working class is making their income from selling their labor as opposed to from capital. Everything else is an implementation detail.
I think it’s pretty ignorant to think a staff software engineer at Google and the cleaning lady are in the same boat
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Sundar became CEO at a time when Google needed a leader who could build consensus across different product areas. Sundar was the right person for this role. Unfortunately Sundar is also relatively weak at setting a bold vision to ensure the company continues to grow and innovate, as Larry had done. So under Sundar the company has slowly shifted from being innovative to being very risk averse, incentivising not making…
> Sundar was the right person for this role. Was he? What is the evidence that he succeeded? Or even had more positive influence than random decisions? Does google have consensus over what it’s doing? Or is Sundar specifically a “safe,” milquetoast CEO chosen to not show up previous CEOs. I don’t know Sundar, but it seems he was picked because google leadership assumed supremacy and thought that they just needed a st…
Sundar is like Neville Chamberlain. Maybe ok during peacetime. But now Google is at war, and needs a Churchill.
The upper management at Google are so lucky that the company is filled with timid people who are averse to change and didn't unionize. Now they can safely siphon the profits for another several years until they inevitably drive the company into the ground when the ad revenue dries up, and they move to similar positions at other places with healthy revenue streams. And the rank-and-file Googlers will defend this becau…
The fact that this is currently the third highest voted comment is just sad. As other sibling commenters have said virtually every sentence here contains ridiculous falsehoods or is just "r/antiwork" levels of nonsense. And it's not that Google doesn't have major problems, a lot of which can be laid at Sundar's feet, or that he's wildly overpaid. It's that these types of reactionary missives just miss the point in ev…
... And getting caught flat-footed against Microsoft (and Adobe, but but not as loudly) in the precise field Alphabet is supposedly the insurmountable leader. Remind me again how big-co CEOs assume "all the risk"?
[0] https://www.law.cornell.edu/uscode/text/15/7241
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For 226 MILLION dollars I bet my ass a ton of VERY SMART people would want that job. Many many many.
Or maybe the smartest people have decided money isn’t everything?
You don't have to think money is everything to understand how earning $225 million in a short time will help you with all the things you do care about, whether it's retiring early, spending time with kids, supporting charity, pursuing hobbies, doing independent research, or taking care of aging parents.
... And getting caught flat-footed against Microsoft (and Adobe, but but not as loudly) in the precise field Alphabet is supposedly the insurmountable leader. Remind me again how big-co CEOs assume "all the risk"?
When the CEO and CFO sign off on the financial statements, they assume an extraordinary amount of risk. If there is fraud occurring in the financial reporting of their company, they will be severely disciplined. I suggest reading up on Sarbanes-Oxley Section 302[0] and the Enron[1] and WorldCom[2] accounting scandals. Sarbanes-Oxley was issued as a response to the aforementioned scandals and lays out the bulk of the…