Hacker News Reader

Comment by indecisive_user | Hacker News Reader

I don't think that's a good analogy. The value of a CEO should be relatively well known before hiring into a company. CEOs are rare, and at the endgame of their career, so you're already pricing in the present and future value you think they will add to your company. CEOs generally can't job hop every couple years for a large double digit raise.

Most good engineers(especially early in their career) will be an order of magnitude more productive after a couple years at the same company, as they build up both domain knowledge in their tech space, and institutional knowledge that can't be learned outside of the company. And companies know the value of this experience. That's why you can switch jobs after 2 years for a 20-40% increase. When the market rate for your labor is 1.2x your current salary, I think that's called underpaid.

View on HN

My point here has nothing to do with CEO pay. Or engineer pay.

My point is that dev pay being off a few percent since 2020 because of high inflation does not by itself decide the question of whether they're overpaid or not.

Patrick Mahomes doesn't get a pay raise adjustment every year for inflation. That doesn't mean his $500m football contract makes him underpaid.

The grandparent comment reads as if devs are underpaid because their pay isn't fully keeping up with some unusual inflation since 2020.

Engineers might not be underpaid due to inflation, but inflation can make them feel underpaid, because they're getting paid less than they were. They see that they're doing the same work as before but getting less for it, and thus the current amount must be too low. The idea that the previous amount was too high is less likely to occur to them.

> I don't think that's a good analogy. The value of a CEO should be relatively well known before hiring into a company. CEOs are rare, and at the endgame of their career, so you're already pricing in the present and future value you think they will add to your company.

Some would say CEOs are paid to increase corporate profits, thus their value is their ability to raise corporate profits.

However, the Kalecki-Levy profit equation (an accounting identity which originated in 1908 and is still accepted as true) makes clear that in aggregate, corporate profits == government deficit.

Thus the single largest driver of corporate profits is not CEO activity, but government fiscal policy.

So CEOs are paid based on what the government does.

>pricing in the present and future value

Are you pricing in value, or pricing in a specific amount of dollars? Because if you're actually pricing in value, then even though the value stays constant, the dollar amount of the value goes up with inflation.

I agree with your point that regular employees should be expected to get more raises than CEOs, because regular employees can improve more. This doesn't really relate to inflation though, except to the extent they are both factors that lead to raises.

Companies would be smart to chuck in 10% bonus after a year, 20 after 2 etc. to 50 after 5 and lock that in at hiring time. Like you say: domain knowledge. You would end up with smaller more productive and happy teams. In addition pay increases to market.

Asking too much? “Waaah! It is really hard to find good developers” is a stuck record on loop since 2016 at least

Reply on news.ycombinator.com