Comment by kortilla | Hacker News Reader

Comment by kortilla | Hacker News Reader

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> The other industries known for highly paid labor (finance, law, and medicine in the US) do not distribute rewards this way. Yes the people at the stop are still pulling in massive pay but there's a much stronger distribution of profits throughout the labor pyramid.

This is wrong. Lawyers get paid worse than FAANG SWEs unless they make partnership, which is the equivalent to becoming a co-owner or working as a lower level exec at a big tech company.

Doctors at big hospitals in the bay make worse money than Google SWEs last time I was chatting with my friend’s wife who was a Doctor at Stanford medicine. The super highly paid doctors are the ones who found or cofound practices.

Finance can pay a little higher, but that’s only because the teams are usually smaller and you have more direct impact. You might pull down 1M/year at Renaissance or whatever, but the partners are still pulling in nearly 100x that.

> It's not bad enough that this is true. The Bezos and Musks and Kalanicks of the world believe that this is correct.

This is the same across nearly all businesses. The owners get to decide how much to pay for operating costs. It’s not a coop.

IME the OP is correct. In my experience, doctors, lawyers and veterinarians all make 6 figures. Low six figures if employee, high 6 figures if partner. 3X difference maybe, nowhere close to 100X.

The key difference is that those professions don't "scale", and the output is linear to the labor (hours) put in. The wealth doesn't lend itself to concentrate into a few hands, and the professional worker is mostly independent and in control of what they do themselves.

In tech, people work in teams where each person is a tiny cog in a (relatively) big machine. We still don't agree how to objectively quantify a person's work output. (Eg: do 10x programmers exist?) When a product becomes successful, there's no objective way to distribute the windfall, so the default capitalist rule applies (whoever invested money and/or has access to the best lawyers gets most of it).

I don't think the discrepancy is the same in any other field of knowledge work, though.

Even hospital CEOs and partners at law firms are making 3-15x what their doctors and attorneys are making. Not 100-200x. The magnitude of the gap is way higher in tech.

"The owners get to decide how much to pay for operating costs."

They do make such decisions, but neither that nor their net worth makes them better than anyone else... yet too many of them act as if it does.

What they really are is nothing more than people who've won a rigged game.

Since when does this have to do with people “being better”?

The difference is not as great in these other fields, but that's because the pyramid isn't as large. There's one person at the top of Alphabet, and tens of thousands of people below him. No law firm has as many people, by a long shot. And the medical analogy isn't right either. You have to look at the CEO of a pharma company, who probably does make a similar multiple to Sundar.

But the person at the top also has a much greater risk because pay is tied to stock performance. The top lawyer in a firm gets paid well, and probably some of that is tied to firm performance. But the base salary is a much greater percent of total comp in that case.

I know this is beside the point you're making, but that guy at the top does not have greater risk.

The right measure of risk isn't money, it's freedom. Work as CEO of Google or Roche for a month and you don't have to work any more. You don't risk shit, you can only win or win bigger.

This is what I don't understand. There are plenty of people who can run a business, so why is it that we pay so much for them? There's a massive queue of candidates who will all do a decent job (you won't know), so why are they paid astronomical sums? There's no way you can be sure a guy is not going to mess things up, and paying him a lot of money won't motivate him more, he's only got a 24h day. He can't go and be CEO elsewhere because he doesn't know other businesses that well, only a few places could logically use him. On top of that a huge proportion of the stock price is not in his hands.

> that guy at the top does not have greater risk.

The CEO and CFO of publicly traded companies get paid pretty handsomely in exchange for taking on a significant amount of risk by signing off on the financial statements.

And when does that risk ever materialize apart from the Enron/Wirecard/FTX cases where the CEO and CFO truly were pulling a massive scam?

Kenneth Lay died after being convicted but before being sentenced, so afaik his family still has the money.

They get paid well to not do crimes? That's nonsensical.

They get paid to take responsibility for crimes that happen underneath them. That’s a lot different and why you got confused.

One creative theory I heard is that a rational benefit of seemingly-irrational executive pay is to incentivize harder work among the people who desire to be executives. Not sure if it makes sense or not, but it's an interesting possibility.

Only works if the would-be CEOs are themselves irrational. You can't seriously be expecting to outcompete thousands of other prospective CEOs.

It would only really apply to companies that promote from within. That could motivate a few dozen people who have a shot at becoming an executive in their career at the company.

You might feel that only a few people are qualified to be your CEO. And they all want to retire - you're competing with the "retire instead" option.

I think the problem here is it is incredibly difficult to evaluate the kind of value CEOs bring. Certainly I could have done a slightly better job than many ousted CEOs of large tech companies.

It’s also possible that simply by listening to your executives/board, an intelligent engineer could do about as well as Sataya or Ballmer or Sundar.

The bottom of their risk is having to become labor again, that's not a risk, that's the default for every one of their employees.

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