It always amazes me how hostile most large companies are to paying for developer tools that have a trivial cost. Then they will approve the budget for some yay quartly profit party no one cares about that cost $100k for the venue rental alone.
I do understand that this mostly is because management wants staff to be replaceable and disposable having specialty tools suggests that a person can be unique.
1. You want to control spend - there are budgets.
2. You want to control accounting - minimize the number of vendors you work with. Each billing needs to come with an invoice, these need to be managed, when a developer leaves you need to cancel their seat etc. It's a pain.
3. You want to control compliance - are these tools safe? Are they accessing sensitive data? Are they audited?
4. You want to control interoperability between teams. Can't have it become a zoo of bring-your-own stuff.
So free tools get around all of these, you can just wing it under the radar and if the tool becomes prominent enough then you go fight the war to have it adopted. Once there's spend, you need to get into line. And that line makes a lot of sense when you're into 30 developers, let alone hundreds.
If you've got 30 developers then you've probably got, what, five or six teams? Your tech leads/senior engineers/whoever provides tech leadership at a team level are operating at a scale where they can go to the pub with your head of engineering/CTO/each other/the dude from finance who has a credit card and fit around a table.
I've worked at companies that size and the "war" involved putting time in the calendar of the head of engineering, asking how his son was, demoing the product we wanted for about two minutes and explaining the pain point it solved, then promising to get our legal team and the one security person to review it after he put the credit card in and before we used it in prod. When I worked somewhere larger it was much more difficult.
Obviously all of this is far from universal. I've worked at places that just gave me a card with $500-$1000mo limit for whatever I need. I've worked at a place when I asked for $100 of hard drive space to test something out of production they said find another way.
To me, the Therac incident is the poster child for a category I call 'context change error'.
Some of the controls were 'born' in a world of hardware interlocks, and so the engineers used the frame of mind where hardware interlocks exist.
Some time later, the interlocks were replaced with software controls. Since everything had worked before, all the software had to do was what worked before.
But it is VERY difficult to challenge all of your assumptions about what "working" means.
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This is also a good reminder that work is done by people and teams, not corporations. That is - just because somebody knows the fine details, that does not mean that the corporation knows the fine details.
> An inspection of the aircraft’s wreckage found that about one-third of the fluid in the hydraulic systems in both the nose and right main landing gears was water, when there should have been none.
I firmly believe, more and more each day, that the human mind does not seek truth or correctness, it primarily seeks satisfaction.
The context for satisfaction is different for every individual human. Some parts of the context are shared (to various degrees). These 'shared contexts' we might call rationality, or science, or society, or religion.
Another part of the problem is that satisfaction is recursive.
We may evaluate something based on:
1. Correctness
2. Completeness
3. Satisfaction
This is obviously self-referential because if something is incorrect or incomplete, then it is also unsatisfying.
For instance, if you are only aware of Electromagnetism, then Maxwell's equations are correct, complete, and satisfying. And then some jerk discovers neutrons.
Anyway, this whole comment may fit into your first three points; or it may help someone understand a failure to communicate.
I'm not sure how to phrase this, so please be patient and try to understand what I intend to say.
CEO pay relative to median employee pay has soared since the 1970s. That is, a CEO may be paid $10,000,000 vs the median employee at $70,000 (arbitrary numbers), where before 1970 the numbers may have been $150,000 and $20,000
Using only one set of numbers can be deceiving though. For instance, through mergers and acquisitions, there may be One CEO where there were previously 10. So you might be able to see this by comparing Total Executive Pay - ie the whole C-suite to Total Non-Executive Pay.
Also, many companies have become more efficient as measured in revenue per employee over time, so another good set of numbers might be Total Executive Pay vs Gross Revenue.
How does Executive Pay look in these contexts?
I'm sure someone has done the work, but I have not had luck googling it, and I definitely don't trust a LLM to get this one right.
As a thought experiment, consider what it would take to make CEO pay gap even BIGGER, in addition to stock-based comp* and buybacks, which are mentioned in headline. Here's what one might do:
- Reduce unions
- Outsource and automate labor
- Slow minimum wage increases
- Consolidate power via M&A (you mentioned this)
- Cut back on benefits like healthcare, pensions and paid leave
- Promote "guru culture": indispensable, iconic leaders like Jack Welch, Steve Jobs etc
- Shift economy towards high-margin industries (tech, finance, pharma) and away from lower-margin ones (retail, manufacturing)
Turns out all of these have been happening since the 70s. So this result should not be surprising.
*Important note that the 1993 Clinton tax bill made it so corporations could no longer deduct the full amount of top executive salaries as a business expense. Only up to $1 million. UNLESS the amount beyond $1 million was performance-based (leading to stock option comp boom).
None of these issues are specific to CEO wages. This is essentially just a list of reasons why you don't like capitalism. ie if a CEO doesn't do these on their own accord, the shareholders might contact the CEO and tell them to take some of these measures. This mechanism isn't dependent on CEO pay, because the CEO is always beholden to the shareholders, and shareholders always want more money.
The solution to this isn't to get mad (or even do something about) CEO wages, but to make sure there are other good reasons why companies might not use these approaches to maximize shareholder returns (ie stronger government regulation, making these approaches illegal).
> This mechanism isn't dependent on CEO pay, because the CEO is always beholden to the shareholders, and shareholders always want more money
Legally the CEO has a fiduciary duty to the shareholders. In practice, can we honestly say that every CEO of a publicly traded corporation acted in the long term interests of EVERY shareholder and didn't just parasitically extract value from the company for themselves and a handful of LARGE shareholders? Facebook is essentially the personal property of Mark Zuckerberg
It's no longer a company it's an empire. Got it. But the executive layer didn’t shrink. You don’t just have one CEO now you have the CEO, presidents of divisions, business-unit heads, all pulling down compensation packages that in the 1970s would’ve looked like outliers even for the very top.
Is revenue per employee the best metric? Productivity gains don’t automatically justify higher executive pay. Most of those gains come from technology the CEO didn't invent or personally implement, supply-chain leverage, and cost-cutting at the bottom, not from some surge of genius at the top. Yet the financial rewards are heavily skewed upward, while median wages flatlined. Plus you know the rule about what you measure being what you get more of. All that would happens under your metric is CEOs push to move to 'contractors' to reduce the measured headcount to justify an even higher salary.
Changing the metric just masks things. Society is broken for those at the bottom, and if their numbers grow too large, it will become broken for everyone.
Using only one metric is THE classic way to misunderstand a system.
> Society is broken for those at the bottom, and if their numbers grow too large, it will become broken for everyone.
It's difficult to capture my intention and perspective in a short comment. In my personal belief, if the future is going to be better than the present, we need to share resources more fairly.
However, money is an imperfect representation of resources. For instance, the extremely wealthy may eat more food or more quality food, but not anywhere near a proportionate excess. They may have a bit more housing, but generally not proportionate to their excess income. Etc etc etc for most things.
This is not excuse, or justification.
What I am saying is that focusing on the excess wealth can become a distraction.
I believe that the majority of harm relating to income inequality does not come from the inequality itself, or even excess resource (food, housing, etc) consumption.
I believe that the majority of harm comes from actions taken while attaining and defending wealth.
It's regulations bent and broken while growing a business.
It's not the housing per se, but the housing must retain value.
It's not the stock portfolio per se, it's the tax loopholes exploited.
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Excess wealth is a correlation to harm. Beyond that, I feel that care must be taken.
Yes and no. Executive compensation, from one perspective, is the mechanism via which shareholders align executive behavior in their favor, to the detriment of workers.
Worker pay is determined by the Law of Supply & Demand, not by the amount of executive pay. I.e. worker pay is determined by the minimum wage the worker will accept and the maximum wage the company is willing to pay. The latter figure is based on the value the worker will provide.
Executive compensation is not part of that equation.
Farmers in poor countries will plant low-yield traditional varietals, even when a high yield option is available.
They might have twice the yield with the new varietal, but if their crop fails: they risk destitution and might even loose their land. So they rationally choose the proven lower-yield varietal. Their risk appetite is proportional to their savings, if they have any. A catch-22.
For low wage workers in America, is it that much different? So many people stay in badly paying jobs because if they loose access to health insurance they could loose their home. Or get sued over a non-compete they cannot afford to fight.
Seems like below some threshold of wealth, supply and demand don't apply anymore. People are forced to choose the least risky option.
In addition to the modern US structural labor concerns sibling highlighted,
> the maximum wage the company is willing to pay
This is the primary method I was thinking of. A company/CEO has a variety of reasons for paying its labor more than the minimum (retention, moral belief, working next to colleagues, etc). Shareholders really only have executive comp (and its structure) to discourage CEOs from paying labor more than the minimum necessary.
Big companies are made of teams of teams.
The little teams don't really get to make purchasing decisions.
If there's a free alternative, little teams just have to suck it up and try to make it work.
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Also consider that many of these expenses are born by the 'cost center' side of the house, that is, the people who don't make money for the company.
If you work in a cost center, the name of the game is saving money by cutting expenses.
If technology goes into the actual product, the cost for that is accounted for differently.