Shall we tie all workers compensation to a high base + lots of options ?
- 2020 profit $13.672B - 2021 profit $17.878B - 2023 profit $20.981B - 2023 profit $22.344B
Yet GM cannot afford to give 10% year on year hikes for next 4 years ?
If management is responsible for profits then they are responsible for the losses too do they return money back in bad times ? Of course not , they will just negotiate more options to compensate for low price . Do you think she will stay and work even one year at her base compensation level of 2M ?
hypothetically let’s say the better salary is going to cost GM 10B a year . The profit would halve and stock would crash , it would still be a healthy company with 15B in profits but management and shareholders will be pissed, would it bad outcome for society or the company ?
In a unregulated capitalist ecosystem, the company will always pay the bare minimum, the shareholders and management incentives will not allow anything else .
Look at Apple for even starker example, most valuable company on earth unimaginable profits every year yet they pay their retail staff peanuts and don’t give them basic benefits because they can and the market expects them to.
[1] It does , all else being the same - They could have sold the stock for the same money in the market, or simply not diluted everyone with new issues and increased the stock price to reflect that.