[HN Gopher] CEOs' pay climbed before layoffs at tech giants like...
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CEOs' pay climbed before layoffs at tech giants like Alphabet and
Microsoft
Author : pg_1234
Score : 64 points
Date : 2023-08-05 21:21 UTC (1 hours ago)
(HTM) web link (southernillinoisnow.com)
(TXT) w3m dump (southernillinoisnow.com)
| nine_zeros wrote:
| CEOs pay is tied to the stock price. They will do whatever it
| takes to boost the stock price, until they are out with a golden
| parachute. From their perspective, the business is all about
| boosting the stock price. It doesn't matter if the boost comes
| from innovation, or from polluting the planet, or from
| unscrupulous addictive practices, or from culling the employees.
|
| Employees are merely, an often undesired, side-effect in the
| business of boosting stock prices.
| mjevans wrote:
| Executive stock prices should vest at the first of 25 years
| from the date earned or 10 years after they've left the
| company. That would encourage long term strategies rather than
| pump and dump.
| spacemanspiff01 wrote:
| [dead]
| nine_zeros wrote:
| That would certainly be one way of attaining long term
| vision.
|
| But who will enforce this requirement? Only pension funds and
| other large shareholders have any (and often impractical)
| leverage over the board C-suite. Wall-street shareholders
| demand faster growth until they themselves can exit out. They
| don't care about the business or the services or the
| employees. They want a high growth return, year-over-year
| until their own investment carry continues to exist.
| toomuchtodo wrote:
| Stock buybacks used to be illegal. Lots of ways to use
| policy to encourage long-term shareholder value if boards
| and corporate bylaws won't.
| nine_zeros wrote:
| Stock buyback is equivalent to paying a dividend. If
| stock buybacks are prevented, companies will continue to
| layoff and pay out dividends. It doesn't solve the root
| cause that employees don't have a seat at the decision-
| making table.
|
| At a minimum, if corporation laws were modified such that
| every laid off employee must be issued 1 year worth of
| shares as a golden parachute, the incentives will all get
| aligned very quickly and employees will not be abruptly
| thrown away.
| s1artibartfast wrote:
| Stock BuyBacks have nothing to do with long or short-term
| vision.
| kqr2 wrote:
| Some companies such as Toyota supposedly have 100 year
| business plans:
|
| http://www.gongol.com/research/economics/100yearplans/
| kccqzy wrote:
| And frankly layoffs had almost no effect on their stock prices.
| Announcing new products, even if quite half-baked AI efforts,
| had much bigger impact on stock prices than layoffs.
| henry2023 wrote:
| Ask facebook
| mertd wrote:
| Meta stock performance is not really attributable to
| layoffs.
| madballster wrote:
| That is a very narrow and frankly sweepingly incorrect
| description of "CEOs" or "companies". They're not all the same.
| I for one (alongside many other investors) carefully study
| incentive programs and compensation oversight executed by the
| board of directors. There are many thoughtful companies (and
| CEOs) who e.g. align over very long-term targets, such as '5
| year return on capital". Investors have found out a long time
| ago that incentivizing by short-term measures such as share
| price (or revenues, or EPS) can bring about very adverse long-
| term investing outcomes.
| ChuckMcM wrote:
| And if you make them subject to "alternative minimum tax" where
| their stock based compensation is considered regular income for
| the year it is awarded based on the difference between the
| strike price and the market price, you "moderate" that process
| somewhat.
|
| But if you're a politician and your donors are all rich elites
| who really hated that aspect of AMT you get repeal it for them:
| https://www.bowlesrice.com/tax-cuts-and-jobs-act-2018-change...
| sjs7007 wrote:
| > compensation is considered regular income for the year it
| is awarded based on the difference between the strike price
| and the market price
|
| Isn't that exactly how it works? Your grant price just
| determines your number of your shares. When your shares vest
| they get taxed as regular income for the entirety of the vest
| amount.
| s1artibartfast wrote:
| I disagree with pretty much everything you say except this.
|
| >Employees are merely, an often undesired, side-effect in the
| business of boosting stock prices.
|
| Employees are worse than a side effect, they're a cost center
| to be avoided if possible. You want to achieve your goals with
| as few employees as possible.
| tootie wrote:
| Employees do work and that work is meant to be profitable. If
| it is, then great. More employees, more profit. If it isn't,
| they get cut. That's exactly what CEOs are responsible for
| determining.
| silverkiwi wrote:
| Deciding to layoff or not is a complex decision. Here the article
| only looks at Companies that did layoff. Although more difficult,
| would be interesting to also look at companies that also made
| this decision and decided not to layoff. Essentially widening the
| group of Companies evaluated to one step before the layoffs/no
| layoffs decision is made.
| lock-the-spock wrote:
| Is there really such a thing as to non-decide? This seems to me
| a pretty impossible study to do.
| behringer wrote:
| I'm reminded of the song by Christy Moore about being laid off:
|
| It seems to me such a cruel irony /
|
| He's richer now then he ever was before /
|
| And now my cheque is spent, I can't afford the rent /
|
| There's one law for the rich, one law for the poor /
| taberiand wrote:
| The law, in its majestic equality, forbids rich and poor alike
| to sleep under bridges, to beg in the streets, and to steal
| their bread.
|
| - Anatole France
| jtode wrote:
| It's become tiresome, reading things that pretend this is not
| business as usual.
| gumballindie wrote:
| Water is wet.
| gkoberger wrote:
| I guess I don't get the point of articles like this.
|
| Yeah, we live in a society where all we value is growth. If the
| company grows, the person who grows it gets more money as a
| reward. The nameless investors (known as "The Market") all demand
| more money.. even the employees want growth so their equity is
| worth more. There's no limit to the growth; there's no Good
| Enough. There's always more to grow. There's literally no
| incentives for anyone, from employee to investor to CEO, to do
| anything but maximize growth. And you can't just grow linearly...
| as the base valuation grows, to maintain a target percentage the
| growth itself has to grow. So anything less than growing the
| growth is a failure.
|
| It's exhausting and never-ending, but every single one of us is
| culpable to some degree. We all want our 401ks to get bigger and
| our house to be worth more than when we bought it. There needs to
| be a much bigger shift in society, otherwise yeah, this is what
| happens.
|
| It's so depressing. But my point is... this is a symptom of a
| much bigger mindset we have, mainly in America. And while that
| mindset has brought us great things, it's also left every single
| one of us on an infinite treadmill. You can't win at capitalism;
| every milestone is fleeting in the name of more growth.
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