[HN Gopher] Norway's sovereign wealth fund to vote against Apple...
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Norway's sovereign wealth fund to vote against Apple management's
pay plan
Author : caaqil
Score : 149 points
Date : 2022-02-27 18:17 UTC (4 hours ago)
(HTM) web link (www.reuters.com)
(TXT) w3m dump (www.reuters.com)
| cottager2 wrote:
| It sounds like the issue is that the stocks aren't locked up for
| some period of years, leading to a situation where Tim Cook could
| take the money and run.
| CGamesPlay wrote:
| The idea that Cook quits because he doesn't get a raise somewhat
| relies on the notion that he can do better elsewhere. Is that
| true? He's already at the nation's wealthiest company.
| sschueller wrote:
| At this point do you still work for money or you work because
| you enjoy it? What more do you want with more money? There
| isn't anything out of reach.
| DevKoala wrote:
| I wouldn't want him to stick and lose motivation either.
| marcinzm wrote:
| He's worth 2 billion, he can do many many things to fill his
| time with that money without needing a day job. Investment,
| philanthropy, advising, etc.
| waffle_maniac wrote:
| Most people don't make enough to retire until they are in
| their 60s or 70s. It sounds like we are paying these guys too
| much if we have to compete for attention with their massive
| fortune.
| labster wrote:
| No, it sounds like we're not paying them enough if we can't
| distract them from their massive fortune!
| smolder wrote:
| I hope this is a joke. It's a failing or at best a quirk
| of our economic system that Tim Cook's time can be so
| highly valued when any number of different piles of well
| educated people could do 10x more useful work for less
| money. It's not meritocracy. He's winning the game, but
| he's replaceable.
| s1artibartfast wrote:
| >He's winning the game, but he's replaceable.
|
| ~100 million/year says he isn't.
|
| It all comes down to how you define "useful work" and
| value. A big part Tim Cooks value is simply being a known
| factor. You might not like that this is valued more than
| 1,000 engineers, but that doesn't change the reality of
| the situation.
| labster wrote:
| Hey, every human is unique and equally irreplaceable.
| It's just that some of us are more equal than others.
| oblio wrote:
| Some people just win capitalism.
|
| The problem is, frequently everyone else doesn't get to
| play a second game.
| lotsofpulp wrote:
| Who is we? Apple's owners already get to decide how badly
| they want their executives, what is wrong with this system?
| kennywinker wrote:
| When you have 2 billion, why would you work for $100mil a
| year?
|
| He is clearly working there for reasons other than money, at
| this point.
| NovemberWhiskey wrote:
| You don't set the compensation for a job bearing in mind
| the wealth of the person who is filling that position.
| That's such an odd perspective.
|
| For example, all other things being equal, would you pay
| someone working for you less because you found out they
| were the beneficiary of a large inheritance? I hope not; I
| hope you would keep paying them equitably according to
| their performance relative to market, I think?
| kennywinker wrote:
| You're talking to someone who believes in a maximum
| income, so yes generational wealth effects your pay
| expectations. Both up and down: up because you have a
| higher standard of living, and down because you can
| choose jobs that don't pay your "market value" because
| you like the work. Ask anyone in the non-profit or arts
| sectors - pay is low and generational wealth is
| widespread.
|
| If you have millions or billions in the bank, you're
| working for reasons other than wealth accumulation. You
| should be paid a living wage (like everyone) and derive
| your status and satisfaction from things besides a big
| number getting slightly bigger.
|
| Obviously we live in a world where markets impact how
| much you have to pay to retain someone beyond that
| livable wage threshold - but both tim cook and the "ceo
| of apple" job are not exactly fungible commodities, so
| it's not a healthy balanced market that we should trust
| to invisibly-hand itself a correct valuation.
| s1artibartfast wrote:
| Need and should are largely irrelevant. The question is
| does he want it and demand it, and the answer is yes.
|
| Some people like you mention don't care about pay, don't
| demand it, and don't get it, others do care.
|
| It seems like you are mainly making a point about how Tim
| Cook should think and feel about his job, when he clearly
| has a different opinion.
|
| As you say, Tim Cook is not fungible and wants to get
| what he is worth.
| kennywinker wrote:
| My point is not about what tim cook should think, it's
| about how i believe people in his position do think.
| Their pay keeps going up because profits are high,
| monopolization is high, and so when they ask boards give.
| But i don't believe they're doing that job for the pay.
| Or, not _primarily_ for the pay, they probably wouldn't
| do it for free.
|
| So, it's being put to a vote and they could deny it, and
| if they do the question is will he walk?
|
| That fact that he has 2bil in the bank and is still doing
| the work he's doing suggests to me that he might not. CEO
| of apple isn't a fungible job. I don't believe tim cook
| wants to be CEO of any other company. If he wanted to
| leave no dollar amount could keep him, similarly, i'm not
| sure a pay cut would send him packing.
| ghostly_s wrote:
| > To put that in perspective, if you were worth 200,000
| would you work for $10k/year?
|
| That's not how perspective works.
| [deleted]
| kennywinker wrote:
| Edited my comment to remove that bit because it distracts
| from the point that he is working for reasons other than
| money. It's not a 1:1 comparison, but it's valid and
| useful to scale big numbers down to ones we're more
| familiar with and can reason about intuitively.
|
| How's this for perspective. Simply sitting on his 2bil
| invested at a 6% return he's getting 120mil/year. He does
| not need that money as a motivator.
| gruez wrote:
| $200k can't even buy an average american house. Also,
| I've seen commenters on HN and reddit arguing that a
| $10k/yea job isn't worth having because it's lower than
| your cost of living.
| [deleted]
| MereInterest wrote:
| Having $2 billion in assets, invested at the historic average
| of 7% after inflation, yields $14 million every year. The
| median household income is about $68k per year. Therefore,
| the passive income just from having $2 billion of assets
| comes out to about the full income of 2000 households.
|
| That's the only way I've come up with to visualize massive
| wealth, as it is so far beyond anything I have experience
| with. That the closest visualization is the size of a town
| that could be entirely devoted in perpetuity to the whims of
| the person with that wealth.
| k4tz wrote:
| 140 million
| jedberg wrote:
| Your math is off by an order of magnitude. 7% of 2 billion
| is $140M.
| Jabbles wrote:
| Your math is also off by an order of magnitude. It is
| $140M, but that makes it 2,000 households @$68k each.
| jedberg wrote:
| You're right. I'll be honest, I just assumed OP did the
| math after $14M correctly and added a 0. I didn't even
| think about how off it sounds.
|
| Fixed my comment, thanks for pointing that out.
| pg_bot wrote:
| It yields 140 million
| Ericson2314 wrote:
| He could also...not work.
| jedberg wrote:
| It sounds like their biggest complaint is that the compensation
| vests too quickly, which means Tim Cook doesn't have an incentive
| to set Apple up for long term success. They want the vesting to
| be longer to incentivize him.
|
| But given that his net worth is already $2B, most of which is
| Apple stock, it seems like he's already incentivized to set Apple
| up for long term success, one because he has so much stock, and
| two because he's clearly not working for the comp, but for the
| love of the game.
| seaman1921 wrote:
| yeah, he probably has enough to just quit regardless of the
| vesting plan. just sounds like the wealth fund trying to gain
| some pr.
| matsemann wrote:
| Why would the wealth fund need PR..?
| jedberg wrote:
| If the people of your country perceive the wealth fund as
| "evil" they tend to revolt, so they need PR to keep the
| people happy.
| djrobstep wrote:
| Drawing a bit of a long bow to consider a trillion dollar
| fund voting in its own shareholder interests anything
| other than financially driven.
| seanhunter wrote:
| How would the people of Norway revolt against their own
| country's sovereign wealth fund? Norway is a very small
| country with (I seem to remember) the largest wealth fund
| in the world due to investments of revenue from the oil
| industry. I highly doubt people there are going to
| perceive it as evil based on whether or not it's taking a
| particular stance on Apple's vesting plan.
|
| They do have a tradition of taking stances on corporate
| governance as a matter of principle and this looks like
| that.
| tyfon wrote:
| Norwegian here, can confirm. We do not see the wealth
| fund as an evil thing :)
|
| The fund has a policy of being an active investor to
| improve worker rights, prevent unethical practices and
| has a ban on investing in certain areas like weapons, oil
| and gas (due to diversification issues), tobacco etc.
|
| Edit: Just a note, the funds operation is completely
| transparent and you can follow the actions and read about
| strategy, what time frames they are looking at when
| investing (very long) and more on their web page [1].
|
| [1] https://www.nbim.no/en/
| conradfr wrote:
| > yeah, he probably has enough to just quit
|
| I bet most peope in the world would retire after only one
| year of his base salary ($3M in 2021).
|
| edit: not considering taxes ;)
| akomtu wrote:
| Those who would retire with $3M dont have the drive,
| ability and desire to run Apple.
| rmbyrro wrote:
| With current life expectancy and inflation prospects, one
| would need to live quite modestly or invest these 3M very
| wisely to retire on such a small amount.
| berdario wrote:
| Life expectancy has been decreasing, and you'd keep those
| 3M invested (bond if not stocks) to fend off inflation.
|
| 3M is absolutely a mind-boggling amount. Ok, housing in
| San Francisco will eat most of that, but the vast
| majority of people in the world retire on way less than
| that
| pjerem wrote:
| In most of the world, 3M is enough to buy a dozen of
| student flats which you can easily live just from the
| rent.
| freyr wrote:
| Or just move out of the Bay Area/NYC/your country's
| equivalent overpriced metro, and live very comfortably.
|
| Of course it works better if your closer to Tim's age
| than in your 20s or 30s.
| markdown wrote:
| LOL, #firstworldproblems
| tromp wrote:
| In many parts of the world you can live luxuriously for
| decades with $3M in assets. It feels wrong to call what
| 99% of the world population can never expect to save, a
| "small amount".
| Jolter wrote:
| Then why pay him that much in the first place?
| andy_ppp wrote:
| He says he's giving all of his wealth away when he dies
| anyway. So I'm guessing he has plans to give it to causes
| he really thinks are important going forward. I'm pretty
| sure someone like Tim Cook doesn't need the cash so there
| must be a reason for the compensation and to be fair
| Apple's execution has been nothing short of incredible
| since he took over.
| 55555 wrote:
| As a sign of respect, and so he can hold his head high
| while standing alongside his peers.
| oblio wrote:
| Yeah, because at that level, that's what's going to make
| the difference between him and his peers as they're
| chatting :-)
| seaman1921 wrote:
| It might be a bit hard to believe, but in reality many
| passionate employees don't really care about the pay - they
| genuinely want to build a great product - but they are
| still paid well because the company looks after the top
| talent in every possible way.
| supernova87a wrote:
| I think it would be more impressive if investors gave fewer shits
| about the headline comp packages of a few executives, and instead
| advocated that Apple pay more attention to how it's no longer
| creating a place that people want to develop their careers at.
|
| Maybe this is just an endemic problem, but it seems to me that
| big companies have lost the ability/desire to cultivate their own
| people. Nowadays it's "let people's salaries and career growth
| stagnate if they choose to stay internal", yet complain when they
| jump ship to another company that's willing to pay more with a
| promotion. And at the same time contribute to the problem by
| being very willing to hire external candidates at salary
| multiples compared to people from inside, while putting up
| unreasonable bars for promotion from within.
|
| I have yet to see any large company get this formula right. Not
| to say that I long for the days when you could make a career out
| of working for GE or something, but you imagine that some
| respected company (Apple?) could make it so that people wanted to
| grow and stay with them. Give people responsibility, roles,
| develop them for a career rather than trying to shortcut it with
| an external person who looks good but ends up being just talk.
|
| Maybe that's impossible nowadays with the pressure to move on to
| a new product every 3 years.
| jonas21 wrote:
| I dunno. I've been hearing people make these complaints about
| Apple for at least 15 years. And in that time, Apple stock has
| gone up 50x. So it seems to have worked out pretty well for
| investors.
| trhway wrote:
| >Nowadays it's "let people's salaries and career growth
| stagnate if they choose to stay internal", yet complain when
| they jump ship to another company that's willing to pay more.
| And at the same time contribute to the problem by being very
| willing to hire external candidates at multiples of people from
| inside, while putting up unreasonable bars for promotion from
| within.
|
| such cross-pollination improves overall state of the industry
| (in particular it optimizes for efficient use of programmers
| time - burning that time on low productive unnecessary tasks
| can be done only by either very rich companies or by companies
| who hire cheap barrel bottom) and results in development of
| better technical talent at higher wages. As direct participants
| and beneficiaries we should celebrate it.
|
| Just look at the alternative like say lawyers - you have to
| suck up to your higher-ups for many years before getting any
| way ahead.
| s1artibartfast wrote:
| >Just look at the alternative like say lawyers - you have to
| suck up to your higher-ups for many years before getting any
| way ahead.
|
| Pretty bad example in my opinion. Top law firms have fixed
| seniority based compensation. They firms all pay the same and
| move in lockstep unison.
|
| https://www.biglawinvestor.com/biglaw-salary-scale/
| thatfrenchguy wrote:
| Apple is pretty well known when I look at my friends working
| there, at least in software and hardware engineering, to have
| people who have been there for a decade or more?
| HWR_14 wrote:
| Investors often have to approve in an up or down vote executive
| compensation. Certainly that's the case here. Sure, they could
| also bring up other issues, but there is no "make Apple a good
| place to grow your career" vote they can participate in.
| Grustaf wrote:
| > how it's no longer creating a place that people want to
| develop their careers at
|
| I thought Apple remained one of the most admired companies in
| the world, to the point where they can pay lower salaries than
| most competitors and still get the best candidates. When are
| you saying that this changed?
| matsemann wrote:
| Btw was just announced that the fund (Oljefondet as it's known as
| here) will work on withdrawing all investments in Russia.
| croes wrote:
| Do they have any investments in Saudi Arabia?
| tordrt wrote:
| I don't know if they completely sold all their investments in
| Saudi Arabia, but they sold down drastically a couple of
| years ago.
| bruce511 wrote:
| I know it's topical at the moment, and hey its good PR to take
| a stand, but frankly it's a tad inconsistent.
|
| So their argument is that a nuclear super power invaded a
| country with little to no provocation, so hey let's make a
| point and disinvest.
|
| So far so good. Definitely a good position to take, and one I
| agree with. Then again Iraqis are wondering why they are still
| invested in Apple, a US company...
| tordrt wrote:
| What about it is inconsistent?
| s1artibartfast wrote:
| The inconsistencies is that the US has invaded and toppled
| far more governments than Russia has
| oblio wrote:
| Not in Europe, and Norway is European, at the end of the
| day.
| rmbyrro wrote:
| Was asking the same thing. Why some people think the US is
| entitled to do such things while criticize anyone else who
| does the same thing?
| stirlo wrote:
| I'm certainly not a US supporter but their intention wasn't
| to annex Iraqi territory.
| ed25519FUUU wrote:
| > _Chief Executive Tim Cook 's pay in 2021 was 1,447 times that
| of the average Apple employee, a company filing on Jan. 7 showed,
| fuelled by stock awards that helped him earn a total of $98.7
| million._
|
| They measure the average salary for such a large company? This
| number seems absolutely pointless to me.
| gsnedders wrote:
| In many countries, total payroll expenditure and total number
| of employees are both matters of public record. It's often the
| only figure that's publicly available.
| onphonenow wrote:
| My question is always exactly how they measure these for stock
| awards.
|
| Elon did some deal that if he pumped Tesla stock up to what
| seemed to be unbelievable at the time heights and other what
| seemed like impossible goals he'd make major bank.
|
| The target was taking tesla from something like $69B market cap
| to $650B market cap - he did that and got it to 800B+.
|
| So, is his pay valued at the value when he cashes in / gets his
| bonus, or the value of the bonus at the time of award (much
| much lower).
| s1artibartfast wrote:
| Some places require reporting it by law so politicians can trot
| out these ratios.
| waffle_maniac wrote:
| The question is can someone do the same job as Tim without
| getting paid as much as him. The answer is yes, obviously.
| Everyone is replaceable.
| newsclues wrote:
| The risk is, can his replacement not fuck up the profits that
| apple generates ever quarter.
|
| Any change or lack of action can take years to hit the bottom
| line.
| nickpp wrote:
| Classic counterexample being Tim's predecessor, Steve Jobs who
| took Apple from the brink and changed it into the most
| successful company of all time.
| waffle_maniac wrote:
| Tim's run at the company has been about building out services
| and not innovation.
|
| Maybe it makes more sense to hire a designer like Ive as CEO.
| Closi wrote:
| Building out hugely profitable services as the lifecycle of
| technology refresh slows has been a huge part of Apple's
| recent success.
|
| Also making huge gambles on things like M1 / Apple Silicon
| show that Apple is still innovating and leading the way -
| even in spaces that were starting to be stagnant.
|
| Let's also not forget hugely profitable hardware lines
| under Tim such as Apple becoming the number 1 biggest watch
| retailer by revenue, and dominating the wireless earphones
| market (which it pretty much established itself too).
| msoad wrote:
| Steve Ballmer enters the chat
| pc86 wrote:
| Steve Ballmer joining Apple would do for Microsoft's stock
| price what Steve Ballmer leaving Microsoft did for
| Microsoft's stock price.
| nopzor wrote:
| i think that was more the function of the macro market.
| much of the foundation for microsoft's second coming was
| laid by balmer. basically, i think he gets somewhat of an
| unfair rap ;-)
| robertlagrant wrote:
| It's certainly true that he was instrumental in their
| success. If someone else had been in post, it would've
| happened ten years earlier.
| dareobasanjo wrote:
| No one who worked at Microsoft under Ballmer & Satya
| believes this. I'm curious as to why people believe that
| Ballmer who missed every major tech trend, threw good
| money after chasing competitors and had zero idea how to
| build build good products "laid the foundation" versus
| acknowledging Satya's significant success?
| nopzor wrote:
| i never said satya wasn't an incredible leader. i've
| heard as much from friends who work at microsoft.
|
| i just don't think it's fair to look at the stock price
| of microsoft during ballers tenure at microsoft without
| applying the lens of the broader market.
| rmbyrro wrote:
| Do you think Microsoft stock would be even near what it
| is today if it was led by Ballmer?
|
| This is an extremely hard to imagine scenario...
| johnebgd wrote:
| Balmer extracted profits out of the established
| businesses while failing at everything else.
| mabbo wrote:
| I interned at Microsoft when he was CEO and he gave us a
| lunch q&a.
|
| The man is the most charismatic person I've ever seen
| speak in person. Given just how badly he ran Microsoft, I
| really think his ability to convince people of stuff is
| some kind of superpower.
| stouset wrote:
| The problem is finding that person and having both high enough
| and _accurate_ enough confidence in that choice.
| Aperocky wrote:
| confidence is self reinforcing, that's why it's impossible
| today. Eventually, the replacement may earn the confidence,
| but it's not today.
|
| The only problem is, how much risk are Apple ready to assume
| for that decision?
| [deleted]
| t1E9mE7JTRjf wrote:
| https://web.archive.org/web/20220227182327/https://www.reute...
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