It's simply how the free market works. Supply and demand. There is only a narrow pool of candidates for CEO positions that can command that kind of compensation. Why do they command that compensation? Because the potential value they bring to the company is worth far more.
Sometimes it really is that simple.
At least, that's the argument.
"People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices."
— Adam Smith, The Wealth of Nations, 1776
Because their compensation is set by the board. What role do board members play in other corporations? CEO or directors.
What value does workers electing their directors add for anybody?
the idea that director appointments should be political is patently absurd
a directorship is a job with well defined requirements and expectations
the majority of workers are often completely unqualified to judge
the rest of the comment is composed of regurgitated talking points.
edit: disclosure - ex-vc and current business owner
Yes, people with voting power can make mistaken decisions that are contrary to their interests. Giving all of the voting power to people whose interests are systematically and fundamentally in conflict with the group at issue on many points does not, however, reduce the likelihood of adverse decisions being imposed on them.
Acting like the corporate-employee relationship is the same as between, say, a uber-driver and an uber-passenger is ridiculous but it seems to me your model of employment.
No company has ever had anything to do with my social life, and no company ever will.
I was suggesting that they do not have the information necessary to make a defensible decision.
others have already covered the remaining aspects of your comment i object to.
We don't exactly have unfettered capitalism in the US. Corporations are successful because the government stimulates demand in certain areas, creates incentives for people to do certain things (buy electric cars or grow corn for ethanol) and as the article points out, provides a charter to corporations to operate. We have antitrust laws that promote healthy competition to protect the consumer...
I think her proposal is not overreaching... it still allows the market and shareholders to determine where a company is headed...
It provides workers say in what they do, since the workers do LITERALLY ALL THE WORK. The shareholders do literally no work in a quest for profit at the expense of the people who DO THE WORK. The company/business cannot survive without workers, they are the most important part.
Have some solidarity for your fellow people. It's truly sickening that anyone would think workers shouldn't have any say at all and should just be useless cogs in the machine getting all representation gutted year after year so a few people can massively profit at the expense of everyone else.
It's not about who does the work. It never has been about who does the work. It's about who takes on the initial burden of risk and what kind of compensation that risk demands. A worker takes on little to no risk when offering his/her labour in return for a steady salary. An entrepreneur taking on massive amounts of leverage can be completely ruined when that venture fails.
There is nothing to stop a worker from quitting their job and taking on the risk of starting their own business. It happens all the time and if they succeed, they deserve to reap the rewards. If a worker chooses the safe path, they cannot then in good faith argue that they now deserve a bigger piece of the pie just because the enterprise has succeeded. Life does not work that way.
> A worker takes on little to no risk when offering his/her labour in return for a steady salary.
They are devoting an irreplaceable fraction of their life to the company. A large fraction of that time is spent learning the company's unique culture, social networks, processes, technology, history, etc. All of that value is lost when they change jobs.
When you work for a company, you have a very material investment in your long-term employment because the value of much of your previous time investment evaporates if you change jobs.
Also, many workers move to work for a specific company. The area may have few other similar opportunities. Switching jobs means moving away from friends and family, selling a house (and taking a significant financial hit from the transaction), uprooting your children from their school, etc.
The idea that jobs are somehow a commodity in a perfect market that workers can freely choose from is in no way connected to reality. Therefore, the idea that workers don't take real risk when choosing a job doesn't make sense.
> An entrepreneur taking on massive amounts of leverage can be completely ruined when that venture fails.
Do you really believe that? How many entrepreneurs actually risk their own well-being? If you have $100 million dollars and end up losing $90m on a venture, you're comfortably still set for life. Maybe you have to sell one of your boats.
> There is nothing to stop a worker from quitting their job and taking on the risk of starting their own business.
In the US, you risk dying from lack of insurance coverage.
You are entitled to your opinion, but there is something to be said about proponents of the left who feel the need to argue emotionally rather than objectively.
> They are devoting an irreplaceable fraction of their life to the company. A large fraction of that time is spent learning the company's unique culture, social networks, processes, technology, history, etc. All of that value is lost when they change jobs.
And a large fraction of the company's time is also spent teaching the company's unique culture, social networks, processes, technology, history, etc. All compensated for of course, and lost when the employee changes jobs.
>When you work for a company, you have a very material investment in your long-term employment because the value of much of your previous time investment evaporates if you change jobs.
The company owes you long term employment as much as you owe the company your long term labour. Nothing is owed, nothing is done out of favour. If a worker deems their salary and options vesting to be fair compensation for their potential time investment then they take the job. Taking the job is not a favour to the company and the company is not hiring the worker out of altruism. It's simply a mutually beneficial relationship. The second that relationship is no longer mutually beneficial, either party is free to terminate the relationship.
> Also, many workers move to work for a specific company. The area may have few other similar opportunities. Switching jobs means moving away from friends and family, selling a house (and taking a significant financial hit from the transaction), uprooting your children from their school, etc.
A company cannot be responsible for all of an employee's future job prospects, family life, and fiscal decisions. It cannot be responsible for which areas have job opportunities and which areas do not. All it can do is offer a value proposition which the employee is free to turn down should they not find it palatable.
> Do you really believe that? How many entrepreneurs actually risk their own well-being? If you have $100 million dollars and end up losing $90m on a venture, you're comfortably still set for life. Maybe you have to sell one of your boats.
Why shouldn't I actually believe that? Do you actually believe that every entrepreneur starts off with $100 million dollars? Or is it more likely that they take 100k out of their savings and mortgage their house?
> In the US, you risk dying from lack of insurance coverage.
Another reason why starting one's own business is a risky proposition and should be properly compensated beyond that of the common worker.
Who takes more risk, the worker standing 70 stories up on an I-beam with no health insurance or life insurance (couldn't afford it!), or the guy who borrowed money to start a business? Who creates the profit that allows the owner to pay back that loan? Who dug the metal out of the ground? Oh, right, it all comes back to the worker. Workers risk their lives and livelihood. The worker takes on just as much risk, if not more, especially with 80% of our country living paycheck to paycheck.
Let me know how you start a business on $7.25/hr?
Hyperbole aside, I'm pretty sure this is illegal and no worker should ever be allowed onto a job site without insurance.
> Who creates the profit that allows the owner to pay back that loan? Who dug the metal out of the ground?
If digging the metal out of the ground commanded an executive's or major stakeholder's compensation, the market would compensate them. The fact, right or wrong, is that the barrier of entry for menial labour does not command a high salary. Almost anyone can do it. Can the same be said about directing a multinational organization?
> Workers risk their lives and livelihood. The worker takes on just as much risk, if not more, especially with 80% of our country living paycheck to paycheck.
I would hazard that the vast majority of occupations (in the US) do not involve workers risking their lives and livelihoods.
> Let me know how you start a business on $7.25/hr?
Wozniak sold his HP calculator for $500 and Jobs sold his Volkswagen for $1500. No one said it would be easy, but plenty of people started with less.
Hyperbole aside, I'm pretty sure this is illegal and no worker should ever be allowed onto a job site without insurance.
This is merely a description of the current state of affairs. It is not relevant in a debate about the desired state of affairs.
In the capitalist value system, the latter: he might lose (temporarily, at least) his credit rating and ability to acquire capital if the venture fails; all the other guy is going to lose is the life of a worker, and who cares about that?
Also, rant tropes like "it's truly sickening" aren't a good fit here, and fall under what the site guidelines refer to as name-calling. The idea on HN is to make a substantive point thoughtfully, which sometimes requires waiting until the heat of the moment subsides a bit.
“In recent years, large technology companies have been investigated for colluding
with a secret agreement not to hire one another’s best workers; **fined billions** of
dollars for unfairly favoring certain services on their platforms over other rivals;
and been accused of mishandling sensitive consumer information or of obtaining new
customers under false pretenses,”
Finally, and I hate to bring this up, but if you don't like it, then quit. That's what I did to start a business. It's tough and it's stressful, and some days are just no fun at all and I wonder what the heck I did. But it's my company, and I only answer to my clients. Yes, I am the shareholder, but honestly, what's in my best interest is serving my clients better than my competition.
I am the labor and the shareholder.
[0] https://www.washingtonpost.com/blogs/right-turn/wp/2018/07/2...
Technology workers who are able to start their own contracting company are a tiny minority of the employed population. To claim everyone has this option and thus should not attempt to affect change at their employer or exercise their power to vote for representatives who enact worker-friendly policies, is naive at best and insulting at worst.
IMHO, this perspective is everything that's wrong with the Silicon Valley mindset. I got mine so f* you if you can't do exactly the same thing as I did.
1 - I live in Texas, not Silicon Valley; 2 - I don't work in technology; 3 - I'm not a contracting company.
Finally, if you read at all what I said with any kind of open mind, then you'd have noticed how hard I said it is. But people rule out the option without really looking at it.
I think discussion would be improved with a less polarizing approach. This is just hyperbole.
They don't ask the machines in the factories how the company should be run and thus why would they ask the workers?
You are essentially company property - they have bought your time.
It's a sad state of affairs as it probably causes a great deal of workers to become alienated and disillusioned with their work.
What I find amusing is that the same people who support this bill are upset that Trump was elected through a democratic process. Many of these supporters would say the democratic process failed the American people. So why would they want to apply the same framework to corporate governance? It seems a bit hypocritical to be honest.
The workers are free to start their own company whenever they want, btw.
No it doesn't (see other people can make completly unqualified statements too).
It reduces the process of choosing directors to a contest of who can make the most empty promises to employees.
Treating low paid workers as interchangeable, disposable resources needs to change and this is a very small step towards giving them a little more control of their situation. It's not perfect but it's better.
It's a far better solution than no option at all. If people make a bad choice they'll just be back to where they started, with people in charge who care little about their welfare.
It's not like all the management will be elected and if a large company can't handle some voices in it's upper management structure that arn't entirely focused on shareholder profit then something else is wrong with that organization.
It’s a bill trying to solve the wrong problem with the wrong solution. What value does workers electing their directors add for anybody? Firstly, the idea that director appointments should be political is patently absurd — a directorship is a job with well defined requirements and expectations, which the majority of workers are often completely unqualified to judge. Secondly, what right does the federal government have to dictate the internal governance of corporations? (Answer: explicitly none, as per the tenth amendment of the constitution.) This is such an awful, awful idea. One only needs to look at the government itself to see what happens when leaders are elected, not appointed. There’s a reason the private sector has a reputation for success and efficiency and the government does not... the idea of executives being elected by democratic process is so scary it’s almost comical.
Disclaimer: I am extremely skeptical of the motives of Elizabeth Warren and hope she doesn’t come anywhere close to the White House