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Comment by underwater | Hacker News Reader

The defense of hundred million dollar CEO paychecks in this thread feels like some bizarre Stockholm syndrome.

I chalk it up to the fact that everyone here believes they are going to be the CEO of their own multi-billion dollar startup, and when that happens, they want their own $100M/yr pay package as well.

cosigned

That is, after all, the hope that a lot of Silicon Valley startups (and VCs, naturally) depend upon.

It was very liberating once I'd got that idea out of my head.

Incorrect, most of us just like to build stuff. The money is a nice perk to continue building even more stuff.

Becoming a successful entrepreneur means people like Elon Musk not corporate CEO's like Marissa Mayer...

I think every major company has three management stages: creators, maintainers, and mooches.

The creators are the ones who bring things to life and redefine or create markets. There are very few of these people and they're often hard to work with because their very mindset requires them to ignore the rules. Elon Musk and Steve Jobs fall into this category.

The managers are the ones who can take something that exists, refine and grow it, and provide stability over a longer run. They tend to be rule followers and understand "the formula" and how it works. They may occasionally have those "creator" flashes and make a leap but that's not their purpose or goal.

Finally are the mooches. They know the rules and go through the motions so they're easily mistaken for the "maintainer" types but they're not there to promote stability. They want to get their piece of the pie and move on.. like locusts.

"Socialism never took root in America because the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires." - Ronald Wright

I always thought this quote was a great example of "those poor people are too stupid to figure out what's good for them. No worries, i'm smart enough to know what's best"

Poor are often uneducated and ignorant of how they are being taken advantage of, yes.

Has anyone actually asked them what they want?

What a strange question. I've been poor for more than one period of my life. And I've had differing ideologies at differing periods, including both full-blown objectivist libertarian and full-blown ban-money communist. I can tell you though that it has nothing to do with ideology, and more about getting to a basic standard of living. The government of the US is extremely corrupted and wasteful, and unable to support this standard of living for many, and the propaganda fed to the public, poor or not, is meant to convince people otherwise. Poor people in China believe the country should go back to full communism. Plenty of poor in the US believe that the country should deregulate as much as possible. What do you think causes this difference in opinion? Could it be genetic? Or perhaps it's the ideas they are fed through the education system and top-down controlled media.

Or it could be people thinking "just because someone has more money than I doesn't mean they took it from me. Good for them."

And then there are people with basic intelligence that understand that, basically, yes they take that money from the rest of the people. You know, mostly because money doesn't grow on trees.

When a certain part of economy inflates some other part deflates. And that other part might be more important than unicorn companies that are pure bubbles full of hot air offering exaclty 0 in the society.

I hope you cheerlead with a lot of gusto for the golden boys. After all they didn't take money out of your pockets? Right? Right???

It's not a zero sum game. New wealth can be created.

And yes, if Yahoo decides to pay ridiculous compensation to their CEO, I don't care. I don't own any Yahoo stock.

But they absolutely took it from me when they are being paid by a publicly traded company.

I am more convinced every day that the marginal income tax above a certain limit (my proposal is 100 * 2000 * minimum wage per hour, I'm willing to go lower to build consensus) above which the income shall be taxed at 90% of the additional income. It is the right thing to do. I want companies to go to the executives and say "look, it costs us too much to give you any more money. Please try to cooperate."

It is the right thing to do.

It only your money if you own stock in that company.

If you do own stock, then get enough shareholders together to vote on executive compensation.

That's the proper mechanism. If you can't get enough shareholders to change things, then I guess it's not that big of a problem to most.

The other option is just don't own stock. That's your choice.

I don't know how a small investor or an individual with a retirement plan can do that. Corporations accepted the controls when they decided to play in the big kids pool.

I understand not every decision can be made in a centralized manner but I think a progressive personal income tax is the right thing to do.

I always laugh at this because there are only room for so many $100M/yr people in this world, at least until technology takes another huge leap forward. But more importantly until that happens, I think we probably have all the ones we can handle, or at least the majority...

I see it as defending the free market economy. I don't think any of them deserve hundred million dollar pay checks, but really the supply/demand of talented CEOs is so out of whack that the pay scales have ballooned. Welcome to capitalism. What I don't understand is why this general problem with CEO pay has to degrade into targeted Mayer bashing.

you "dont understand" why the chief executive of a company should be targeted with criticism based on how said company performed ? So they should just get paid and not have any responsibilities whatsoever ?

I see it as defending an "old boys club(now including women!)" who sit on tons of overlapping boards and conspire to "keep it in the family" and "reward" the "successful" businessperson.

The reality is that CEO pay isn't based on performance. its based on some bizarre dance done in the highest boardrooms designed to extract the most wealth possible for the 2 - 5 years someone is CEO regardless of how they run the company.

Welcome to corporate America. I agree with you, but the people on this forum are not writing comments defending the old boys club when they suggest her pay is not abnormal in the market. If we want to change these things it requires changes in government and regulation so we need to lobby for that change.

The dynamic seems to be a) if things are bad, we need to pay top dollar to keep valuable executive talent to fix it, and b) if things are good, we should shower rewards on the executives who made it happen. Heads I win, tails you lose. It's a nice place to be.

CEO pay has little to do with the free market and everything to do with the principle-agent problem.

In 1983 the average CEO was paid wages equal to 50 average employees. Today the ratio is over 300:1.

If this is the free market at work then our economy and society is doing something profoundly wrong to produce such an enormous shortfall in qualified CEOs. Clearly we need to identify what's wrong with our upper classes that they no longer seem to be able to produce qualified senior-executives. Maybe they're being educated improperly? Perhaps social problems endemic to that type of person can explain the executive skills gap? In the meantime, at the very least, we need to have a temporary guest worker program to ensure our companies aren't crippled by senior executive shortages.

>In 1983 the average CEO was paid wages equal to 50 average employees. Today the ratio is over 300:1.

https://en.wikipedia.org/wiki/Minimum_wage_in_the_United_Sta...

The government failed to do its job since 197x. The growing income disparity is the result of free market let run completely free by the government. It is the basic example from statistics 101 - in completely symmetric odds situation that thus looks fair at first ("free market"), the player with deepest pockets wins with higher probability. The government by not increasing minimum wage provided for much significant disparity between the "depth of pockets" and thus the resulting increasing income gap.

What a company pays their CEO doesn't have anything to do with you (unless of course you're a stockholder).

Well, something. The hypothetical company exists in a society.

Sure, but it's still none of anyone else' business.

So what you're saying is that a business can not negatively impact the society it exists in in any way, so shut the hell up with your criticism?

I'm glad you're here to enhance this conversation.

It's a public company.

Everything exists in society. If that's the filter you'd like to use, then be prepared for the gov't having a lot more say about how you run your life.

That doesn't mean you can't have an opinion on it.

And I'd wager it does have something to do with many people. CEO salary increases don't happen in a bubble - there has been an unprecedented increase in them while income growth in the middle class has stagnated horribly.

Blame globalization for that, not absurd CEO pay. There are now many people that are willing to do what were blue collar and middle class jobs for much, much less, and they'll do it just as well. There are fewer and fewer natural reasons for companies to pay US workers the premium they command.

How globalization isn't applicable to CEO?

At least partly because it's a very rare and specialized skillset - you basically have to have run large divisions in large companies or other large organizations, or been the CEO of a smaller company to be considered for the top spot at one of the large companies that pay these outlandish sums.

A good CEO can be worth an incredible amount of money to a large company, which is why they command such amazing pay. Just think, how much is it worth to Apple to have Steve Jobs as CEO vs. someone else? His leadership helped add hundreds of billions of dollars to their market cap. Naturally, the owners of the company are going to be willing to pay him a lot to help keep his interest.

CEOs are a popular scapegoat because they're easy to identify and their rewards are outsized, but they're not the actual problem, and it's counterproductive to focus on their compensation.

> CEO salary increases don't happen in a bubble - there has been an unprecedented increase in them while income growth in the middle class has stagnated horribly.

Since you bring up stagnating wages, it sounds like you are suggesting that the reason middle class workers aren't being paid more is because the money is going to bigger CEO pay. Do you think that if the CEO was paid less, then that money would go to the workers? Because it wouldn't, it would go towards higher profits for the company and so more money for the shareholders. The shareholders, who ultimately decide how much the CEO gets paid. This is the problem some of us have with debates about CEO compensation. It ultimately boils down to complaining about how people choose to spend their own money.

My own and many other pension plans will have bought into many of these companies. We are all indirect stockholders.

The success and failure (including how poor performing CEO's are remunerated) of top companies directly impacts my finances and indirectly affects my business enviroment and direction of the country.

Not to mention simple freedom of speech around a public company.

Yes, it does have something to do with me. And yes, I will have an opinion.

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