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Overpaid CEOs 2019

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Re: Overpaid CEOs 2019

#61

Post by mactrey »

jlawson wrote: post #18
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 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…

It may even be that:

* Normal-Person will increase profits by 5% and will dutifully inform the media of those gains

* Super-Exec will increase profits by 5% and will give a charismatic interview leading the market to believe that profits may increase by 10% the next year, which is reflected in an outsized 30% rise in the price of company stock

The board will hire Super-Exec for $50mm/yr because they all hold stock in the company and are thus more interested in the stock price than in the company fundamentals.

Re: Overpaid CEOs 2019

#62

Post by zdragnar »

munk-a wrote: post #46
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.

Just as a note, $3k a year raise for a QA tester making 42k is going to do quite a bit for retention. If 3k seems like nothing then I have a bathroom renovation that I'd love for you to bankroll with your pocket change.

Oh I know, I was making less than that when I started my career. My point was I'd be willing to be that for most people, a single raise isn't the straw that breaks the camels back when it comes to whether or not they'd stay at Activision Blizzard. From what I've heard from people who worked there (specifically the Activision side) is that it isn't a place I would want to work myself, and $3k wouldn't be enough to convince me otherwise.

Re: Overpaid CEOs 2019

#63

Post by zavi »

Traster wrote: post #2

I feel like CEO pay is one of these emergent problems with our current system. We have this group of people whose salaries are just astronomical compared to the average person in the company, and whilst it's true their job could technically make more of a difference these payouts are totally asymmetrical and completely independent of how effective a CEO is.

Salaries are determined by market forces. Board pays CEO as much as they value her or him. "Pay gap" between CEOs and proletariat is a meme and as such should not be considered seriously.

Re: Overpaid CEOs 2019

#64

Post by hnbroseph »

large corporations seem more like corporate aristocratic states. the ceos are frequently so thoroughly divorced from the common plebs in the trenches doing the actual work that enables the company to actually exist. this divorce also seems to show up in how compensation and performance apparently has so limited correlation.

Re: Overpaid CEOs 2019

#65

Post by [deleted] »

roenxi wrote: post #55
Traster wrote: post #2

I feel like CEO pay is one of these emergent problems with our current system. We have this group of people whose salaries are just astronomical compared to the average person in the company, and whilst it's true their job could technically make more of a difference these payouts are totally asymmetrical and completely independent of how effective a CEO is.

It is highly suggestive that CEOs are the ones who determine the pay of CEOs, in practice. If the shareholders actually had to negotiate the remuneration packages I bet the CEOs wouldn't be able to command the salaries that they do. There isn't enough evidence that paying more for a CEO increases profits. The upper middle management strata is stuffed with exceptional people and the skillset to be a good CEO isn't act…

[deleted]

Re: Overpaid CEOs 2019

#66

Post by CountSessine »

ryandrake wrote: post #52
jjoonathan wrote: post #20

Earlier quoted context omitted.

A good CEO can create massive value, but the present value of any particular choice of CEO -- which should be an upper bound to the performance-independent pay they are able to negotiate -- needs to be diminished according to the uncertainty in the evaluation. That's where the leverage excuse falls apart: uncertainty is through the roof. Everybody's throwing darts at a dart board and everybody knows it, so if the sto…

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?

I’ve always wondered: if CEO pay was truly tied to their “creating value” then shouldn’t they lose money if they destroy value?

Not necessarily. They'd be plain-old investors then. CEOs are like options traders who pay for their call options by working 60 hour weeks.

Re: Overpaid CEOs 2019

#67

Post by hnbroseph »

simplecomplex wrote: post #13

Everyone is free to be a CEO. If salaries are really too high it should be easy to get a CEO position by undercutting everyone else. It’s easy to sit on the sidelines and complain other people are making too much money. Remember that CEOs making less wont result in employees making more. Maybe it’s just me, but HN lately seems dominated by whiny/complaining articles that don’t really contribute any knowledge or enhan…

> Everyone is free to be a CEO.

this is such a thoroughly trivial and simplistic observation, that it contains basically zero useful information.

Re: Overpaid CEOs 2019

#68

Post by CountSessine »

ryandrake wrote: post #56
davesque wrote: post #17

Earlier quoted context omitted.

Part of OP's point though is that CEO pay is apparently not tied to performance because CEOs still get astronomical pay really regardless of whether or not their company/division performs well. So CEOs just get paid more period. And there's this funny set of myths as to why that is the case. In reality, I think it just boils down to the fact that humans sort of instinctively (or maybe culturally?) like the idea of ro…

You’re exactly right. Senior leadership (including CEOs) have the best of both worlds: they get the upside when the company succeeds, but none of the downside when the company fails. The worst that happens is they get fired and go make more millions as CEO of some other company. In fact, they often get upside when the company fails (what was Marissa Mayer’s exit package?) It’s a helluva deal they got going.

In fact, they often get upside when the company fails (what was Marissa Mayer’s exit package?)

Marissa Mayer got a nice compensation package because she did well by Yahoo investors: she managed to trick Verizon into paying real money to buy the hulking wreck of Yahoo.

If you start out thinking that Yahoo could ever possibly have been saved in any alternate universe, you can get all-kinds of angry or disappointed in Mayer's performance. But if you see Yahoo for what it was, you realize she really did arrange the best possible deal that Yahoo shareholders could have hoped for.

Re: Overpaid CEOs 2019

#69

Post by [deleted] »

will_pseudonym wrote: post #42
hangonhn wrote: post #36

Earlier quoted context omitted.

"so the game dev shops know that most/all inhumane treatment will be accepted by the next person who will gladly endure it to be working in the industry." This is precisely the environment where unions emerged. If individual workers had a lot of leverage, there would never be a need for unions.

Yes, but the workers in those original unionization events didn't have as many options as the workers who are doing game development. People weren't working in factories and coal mines because they loved it, turning down other, less inhumane and more lucrative positions to do so. The options were the horrible companies or unionization. For a game developer, the options are horrible companies, unionization, or a devel…

[deleted]

Re: Overpaid CEOs 2019

#70

Post by mc32 »

Traster wrote: post #2

I feel like CEO pay is one of these emergent problems with our current system. We have this group of people whose salaries are just astronomical compared to the average person in the company, and whilst it's true their job could technically make more of a difference these payouts are totally asymmetrical and completely independent of how effective a CEO is.

Apparently the CEO of Renault Nissan while compensated fairly compared to Hapanese counterparts, was unhappy that compared to NA and EU auto companies he wasn’t so set out to set up another unofficial compensation mechanism to bring him closer to the global pay scale.
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