There is a class of people who make obscene amounts of money while introducing systemic risks into the economy.
When the inevitable blowup happens (like in 2008), then these people keep their bonuses of tens or hundreds of millions of dollars while the losses are socialized, which means you're on the hook and your tax money is used to bail out "too big to fail" banks, insurance companies and auto companies.
10 years later people are still talking about a "recovery".
The money supply has been diluted via money printing (so-called "quantitative easing") which is still being done in EU and Japan on a massive scale.
The already wealthy are positioned much closer to the money spigots (by being able to get money at much lower interest rates), and can therefore do "carry-trades". Basically a license to print money.
Money printing and interest rates kept at an artificially low rate deprives from savers and pensioners of income they would otherwise have.
A lot more than me, but that's not him taking my wealth. I'm in a voluntary relationship with his company, I've agreed to my salary, and if I'm unhappy with my pay, I'm free to find other work.
He's (well, the shareholders) still taking the surplus value of the work of all employees while they did most of said work. And you may be in a voluntary relationship but for many people, such a relationship is required to survive and it may not be so easy to find work elsewhere (especially when you're not in tech).
Do you allow for this to work both ways? For example, when the company tanks, the shareholders take the brunt of the losses, while most of the employees (at least the types of employees that are on HN) likely move on to another job at another company without much trouble...
You can't count the upsides for the shareholders without counting the downsides as well.
How do they "take the brunt of the losses" when the company tanks in a limited liability model ? unless you mean the actual loss of their stocks, and (at least most of the time) the lack of compensation for them ? because in that case what they're losing are the very tokens of ownership that allowed them to extract the aforementioned surplus value unfairly - the tokens that in my view should mainly belong to the actual value producers.
That's not to say that investors shouldn't be compensated for their initial risks when an actual funds injection is required, mind you; but them being compensated ad vitam eternam - and more generally, them actually owning the structure - makes very little sense morally for me (and beyond "morally", I don't see how this can result in anything else than progressive concentration of wealth society-wide in the long term).
You also assume people can "move on to another job" without too much trouble; again, that may hold true in tech or similar popular domains but it's far from true for a lot of people.
That presumes the job market is perfectly efficient but inn reality it isn't. Back in 2015 Apple and Google (among others) being convicted of breaking the law to suppress wages. It was broken before that lawsuit however, and you can bet that the job market hasn't magically been fixed since they settled.
it doesn't have anything to do with the company. before companies existed you still had to work to survive. it was of a different nature, but you have always had to gather and manage resources to stay alive.
Yes, and I'm not disputing that. What we're discussing though is the fact that CEOs make around 200x what their employees make and that you are required to help them uphold their standard of living if you want to eat or have health care regardless of which CEO you work for.
A corporation is a model of communist dictatorship. The higher-ups control the means of production, they take your labor according to your ability and give to you your need (as determined by them.) In the sense that existing in a communist dictatorship is 'voluntary' then your work for the company is voluntary. And in the sense that being able to move from one communist dictatorship to another communist dictatorship is free then you are free.
Most likely, yes. The CEO is the public face of the company. (S)He attracts both investors & customers either through direct hands-on interactions or by providing stability and confidence.
Put it this way:
- Would you feel comfortable investing your money with a company run by 200 engineers?
- Would you feel comfortable entering into a contract or purchasing agreement with a company run by 200 engineers?
Yes. Yes. Yes. Yes. Yes. Yes. A thousand times Yes. At least in a healthy company.
What exactly do you think separates companies like Oracle and Microsoft? Oracle has hundreds of very talented engineers. But their position in the market is stagnating.
This is hard for HN types to accept, but Engineers are not the people in software companies producing value. No individual person is producing value. Its a combination of the leadership who can lay down a plan toward something that produces value, and the line workers who can actually produce it. Both are necessary.
Here's the difference: If you need to replace an engineer, go for it. Who cares. There are millions of us. We're code-monkeys. If you need to replace a CEO, you better be careful. Github couldn't even find a good CEO, so they sold out. If you're not careful, you might get a Larry Ellison or a Marissa Meyer instead of a Satya Nadella or a Tim Cook.
Successfully leading companies legitimately requires personality characteristics that are present in less than 1% of the population. I would guarantee that if we dissected the brains of enough C-suite people from successful companies, we'd see some sort of genetic or brain matter similarities, probably something resembling sociopathism.
I don't think the marketplace makes a distinction between "good" and "bad" CEOs with regards to pay, compensation, and rewards. Stock valuations are speculative and a declaration of faith that you can sell the stock for more than what you paid. Good leadership is often unrecognizable until there's a crisis.
That's roughly true. And there's a good reason behind it: Its very difficult to tell when someone will be a good CEO. Hell, its really difficult to tell when anyone will be actually great at the job they're being hired for.
At least with an engineer, you can be hired by someone who could more-or-less do the job you're being hired for. Senior engineers hire entry-level devs. The CTO hires team leads. Who hires the CEO?
Often, there's no one in the company who is adequately prepared for that role, because the role doesn't have a job description. It doesn't have bullet points of what you do every day. Your job is to lead the company, set the expectations, set the results, for everyone else. That's the role of the c-suite.
i think we over-attribute the success's of companies based on the talent of both their CEO and their employees.
Here are some examples: I've worked in the gaming industry at big company for 5 years. I've seen a ton of games fail and few succeed. I was on the most successful game team that made hundreds of millions of dollars. And, I don't believe our team was more talented than all the other teams. We simply had the right market timing with exactly the right game, inexorably leading to an enormous success. Within this company many other teams built clones, executed just as well if not better and yet, none of those games received the success as the first one with the right timing.
Well said. I think the reason it's easy to feel that people at the C-Suite don't produce value is the "leadership" qualities that matter are very hard to define, and success or failure often doesn't make itself clear until months or years down the road.
As a lower-level employee, sometimes you think that the company would be successful without a leader, or even is successful in spite of poor leadership - while that may sometimes be true, much of what happens at that level is hard to understand unless you've been there
In the 1950's, American CEO's earned about 11 times as much as the median employee at their firm. Today it's about 200x. Are you claiming that the gap in value contributed between CEOs and employees has increased by a factor of 20 in that time? Do you have any evidence for this?
Absent any, I think it is much more reasonable to conclude that there's little to no justification for current CEO compensation and that they draw their current compensations mostly "because they can".
You have to keep up with the increasing sophistication of lies enabling business, so perhaps? (not sure I should put /s here as I am torn if I meant it seriously or as a satire; it's kinda blurry these days)
Who is on the board? Boards are mostly made up of CEOs of other companies. Agreeing to excessive compensation is a "you scratch my back, I'll scratch yours" situation.
So what. How is CEO pay any of your concern. It sounds like jealousy. For large companies, CEO pay is insignificant to the total company’s revenues. If the CEO make $1 that would suddenly result in money to pay more to employees. $10,000,000 salary divided among 20,000 workers and each worker gets $200 extra which is and extra $17 per month.
The his focus on CEO pay is nothing more than old-fashioned class warfare jealousy. Think how much more money workers could make if we cut payroll taxes by 20% — a lot more than if they paid the CEO $1. But those on the left complaining about CEO pay would go apoplectic just discussing tax cuts. Because the issue isn’t really about pay, it’s an ideological thing.
Could somebody else provide the same amount of value (as your CEO) for a much lower salary? In principle at least, employees (including CEOs) shouldn't be compensated according to the "value" they provide, but instead only paid the minimum necessary to prevent them from quitting, or at least from quitting too frequently.
This is honestly the most damaging form of false consciousness that pervades the tech industry. Yes, in terms of income, they’re better off than many people in the workforce, but in class terms they are labor.
Because many software developers in SV might make over 100K (most do) but have vastly less money left over to actually save compared to someone earning less than half that in other places.
I recently considered an opportunity in SV and after getting over the initial shock of how much they thought I was worth, I realized I as in better economic shape staying where I am and earning what appears to be a lot less. And I'm not what I'd consider wealthy at all.
I recently saw an article here on HN about a guy who worked for Google for 10 years then quit and started his own company. He says in that decade he saved 100K, and my thought was, that's all, for 10 years at Google? I earn a lot less than he did, but I'm saving at nearly triple that rate.
> Because many software developers in SV might make over 100K (most do) but have vastly less money left over to actually save compared to someone earning less than half that in other places.
That's just not true.
If you're working in SF on 100k/year, your pay after tax is 5750. Spending 2k/month on rent leaves you with 3750/month, which is almost the pay before tax of someone on half that.
When you add up how much a life costs in SF compared to many other places (and in my case I was comparing to life in a large West-European city where I currently live, and where driving/owning a car is a rarity, where healthcare is ubiquitous and relatively inexpensive), there is a significant economic advantage when earning nearly half what you'd earn in SF.
I'm not just talking about rent (which, incidentally, for my family, 2K per month is much lower than the rent we were looking at to accommodate our kids and private life without roommates in SF), but also about how much you spend on your transportation or gas every day, your healthcare premiums and deductibles, cost of groceries and entertainment, auto mortgages and/or insurance for 2 cars (because 1 car for a family wouldn't cut it there).... and the answer becomes obvious.
What adult is paying 2k in rent in SV, with 4 roommates that may be possible... If you want to live like that fine but most of America can afford to buy a substantial house for 2k a month.
I don't live in SF, I had a cursory google and came up with [0] for 2100/month. My point was that even spending that amount on rent, and paying tax on a 100k salary, that you still have more left over at that point than someone on 50k a year will _gross_ and have to pay rent and taxes out of. The commenter I replied to said:
> many software developers in SV might make over 100K (most do) but have vastly less money left over to actually save compared to someone earning less than half that in other places.
Not that he couldn't afford to buy a substantial house in SF.
Sure and I bet you could find a $500/mo room in a crack house. Doesn't mean a working professional would be willing to live there.
Frankly a realistic number is $3000/mo for a 1BR and my point is that you could own an incredible home in most of the country for that price. People in SV have Stockholm Syndrome and justify the horrendous cost of living, rampant homelessness, insane working hours etc. with their cries of "but look at all my stock options!"
Meanwhile their counterparts in places like Austin make over $100k, can easily own a substantial home, have excellent life-work balance and shocker... have SUBSTANTIAL SAVINGS as well.
How much do you pay for rent? Who does that rent go to?
How much do you pay for your car payment? Who does that go to?
How much of your paycheck goes to health care 'insurance'? Who does that go to?
How much do you spend on frivolous items/entertainment that is owned by a mega-corp?
How much did you pay for college tuition?
How much of any of that do you think goes into lining the pockets of the highest person in the corporate food chain?
If you don't see the issue you are being willfully ignorant.
I was hell banned on HN for mentioning it so this will be my last post, but think about royalties. Do you get any of the things you build?
Or if you left your job, would you be legally required to delete all your work and have to pay tax money on an illiquid second-class asset that only has a percentage chance of payout(the startup scam).
As for HN, I love engineers and have been on HN for over a decade, but this site is the same as startups and ycombinator in general. Built for VCs to extract value out of engineers and the public.
