Apple CEO: “no layoffs here, but maybe cut my salary by 40%”
And yes, I know $50 million is couch change for Tim Apple
Right now there's a misaligned incentive to perform layoffs in order to appease investors (including those in the boardroom) and pump the stock price even if the company is doing well.
It's in the best interest of the shareholders that the CEO of a failing company either have faith that it will turn around or negotiate an acquisition. I don't believe this is the case with current executive compensation structures.
And at least this penalty would be an incentive towards shrinking the company via attrition instead of disrupting the lives of thousands of employees and shocking the labour market.
It’s better to have loved and to have lost than to never have loved at all.
I would much rather have been hired at AWS in mid 2020 (which I was), make over six figures more over the next two years than I would have anywhere locally (I work remotely) and gotten laid off (I haven’t) than not be hired at all.
I too work remotely making more than I would locally, and I left my previous company for a new place only to be laid off six months later. I would far rather not been hired into the new company and still be where I was at than suddenly job hunting (I have plenty of runway, I should be fine).
Well, in my specific case do you know of any other major tech company that would have hired me to consult other enterprise companies on how to develop on top of AWS?
> and I left my previous company for a new place only to be laid off six months later. I would far rather not been hired into the new company and still be where I was at than suddenly job hunting (I have plenty of runway, I should be fine).
I changed jobs 6 times between 2012-2020. I stay prepared to interview.
If they are right, then isn't the job of management, in a principle fundamental to the US economic system, to follow their wishes? Management doesn't have to do whatever investors ask for, but there is no real justification for them to do something which is both against their wishes and against the interests of the company.
If they are wrong, then surely the problem is that most US companies are having their decision-making driven by a group of people who are paramount but who are making misguided or misinformed decisions. Any tweaking of the exact incentives which doesn't solve this problem is both a distraction and subject to the law of unintended consequences.
Note that I am not strongly in favor of either sweeping layoffs or of the specific US variant of capitalism in general. I just think that one should be honest about to what extent problems are unavoidable to the extent that one cleaves to a given system.
Those that ignore that rule become heavily fined.
Also, stock value definitely needs to be in the equation. It makes no sense to fire people if the company's valuation is increasing and thus stockholders are getting richer.
What does it mean when almost every big company's management made the same mistake?
I'm all for worker protections and good severance and unemployment benefits and its not great to be laid off but these takes just don't resonate with me.
A CEO cutting his own pay seems like a much better first step. It signals accountability.
This is not true. Most executives' compensation is tied to equity. For example, Tim Cook's base pay + bonus is 9M, but he has 40M in equity comp (performance + time based).
> A CEO cutting his own pay seems like a much better first step. It signals accountability.
This, I agree with.
Tim Cook is still getting paid millions. His pay cut was voluntary.
Workers getting fired are getting zero salary and are not leaving because they want to.
I'm sure Tim Cook isn't stressing about how to make rent or pay the mortgage, unlike people getting laid off.
I seem to remember when studying economics that someone analyzed management behavior and found senior executives were typically decent at their jobs and more or less had incentives to make decent decisions. Middle management was completely risk averse, had no skin in the game and made decisions only insofar as they wouldn't be fired. I wish I could find a link, but I read it years ago, though this more informal discussion cites similar work (they use family-owned businesses as a proxy for middle managers who do have skin in the game)[0]
I do think that a CEO showing accountability sets a standard for the rest of mgmt and the organization, which is perhaps more accurate; though I'd hope that organizations find ways to hold middle management accountable for failures
[0] https://www.wealthmanagement.com/equities/why-management-nee...
The skin in the game being referred to is losing their job, not losing some fractional percentage of their net worth.
This reads like a disingenuous attempt at a strawman.
It's immaterial if firing people is a legitimate strategy or not. The whole point is that executives get little to no repercussion for dictating layoffs, regardless of the company's health.
They wake up one day, can decide to fire 10k people, order HR to prune the loose ends to meet the target, tell the assistant to write a heart-felt "I take full responsibility" email, and get back to browse the web or sip lattes or go for a nice walk like nothing happened. In the end they can even get a raise out of it.
Meanwhile, 10k workers are screwed.
The incentives are all wrong.
I also don't understand what a smooth strategy does in real terms. Layoffs should have been in smaller increments, started sooner, and lasted longer?
Management and especially executives are the least affected by layoffs, yet it was their decision making that led to the layoffs in the first place. In fact, these people stand to gain from layoffs because they have heavy equity compensation and shareholders seem to froth at the mouth for layoffs.
This idea that companies move from growth to profit and back and forth seems naïve at best. Yet, companies do indeed do this. So the executives who rode the past three years of insane stock growth, making a ton from equity and investments and hiring like madmen, now get to turn around and say "we're sorry, good luck paying your mortgage".
The incentives are all wrong, as the very people who control the decisions that lead up to layoffs are both immune from the layoffs and tacitly benefit from them.
Everyone and their dog knew this market clawback was coming, and it's been here for over a year already. You're telling me these supposedly brilliant executives couldn't have planned better?
Lately, and I've seen it happen, after layoffs, the companies immediately start hiring again for the exact same positions they just laid off. Over time, they hire a large portion of the positions back. So, what was the point? The point was to appease stockholders in the short term.
It's not saving the company from doing 10% layoffs.
Not even 0.1%...
For these folks, it's all about the stock.
By making this salary cut into a PR event, Cook's long term compensation is likely to skyrocket as shareholders reward the company's direction.
Regardless, Cook already owns a massive amount of stock. The PR event, and the eventual rise in Apple's price will reward Cook massively over the long term.
It also paves the way for a dramatic increase in total compensation when the economy gets back to normal and Apple share price rises with the tide naturally.
It will make up for it multiplied across all non-Cook Apple shares, but isn't that the point?
Zuck can do whatever he wants and remain in control. The others have to keep the board happy...
Since Sep 2019, Apple's workforce increased by 20%. Microsoft was next closest with 53%, and both Meta and Amazon pretty much doubled.
[1] https://www.wsj.com/articles/how-apple-has-so-far-avoided-la...
For most of these big wig shareholders it's probably the other way around, though.