I'll do it.
It's not like that one wrong decision ends up affecting them. Even if they get fired (which they often don't), they can exercise golden parachutes that will pay out many multiples of how much an average earner gets in a lifetime.
It's a job that gets paid a lot of money because the people who do it come from a fairly tight knit community that looks out for each other, not because of merit (CEO pay actually correlates slightly negatively with performance). Being an alumnus of McKinsey is actually one of the ways to enter that community.
You are totally right about the "golden parachute".
The nice thing about being in upper management is that none of your decisions has any negative consequences for yourself and in the end you will just have more money and some more enemies who will probably not even attack you.
It is always about "vitamin b" because that is how certain networks like (financial) elites work.
I always wonder how average people try to defend the rich and argue that it is totally justified that they earn something like one year of salary in a month or even more.
Think about all the big issues we have and how we could tackle them with all the money that now is inherited and shoved around to make more money out of nothing just to be even wealthier.
It is just absurd to me and that people are actually kind of ok with this takes away most of the hope I have for our global future because if these people prevail it might as well look like the "hunger games" here some day.
I'm one of those "average" people. CEOs are paid that much because they found some other people willing to pay them that much, and I'm not arrogant enough to presume my preferences for how the people paying them should spend their money are superior to their own preferences.
Look at it as empathy. Would I like it if somebody came and started telling me how to spend my money? Hell no! Then why should I wish that upon whomever's paying CEOs?
You and a bunch of others are going to think I am totally crazy for saying it, but I think you might be too possessive of "your" money.
Maybe you think you got it because you are totally that awesome and really deserve it more than somebody else. But surely you were supported throughout your lifetime to end up making that money. It's a collaborative effort.
Sometimes I get approached by homeless types on the sidewalk and I give them a $20 or something. Occasionally it's been larger than that, often it's been smaller. One might call that being generous. I am surely in a position of privilege being able to do that without it hurting much. But really all I am doing is giving them a piece of paper. Particles of the universe just like any other matter. I don't feel it's mine any more than it's theirs. So it moves from my wallet to their hand. No big deal.
I will admit that this attitude has its limits. You can go broke doing it too much. But there is room for it in our lives.
That is an odd point to make when you are fully aware of how much $20 could mean to a homeless person.
In an ideal world maybe everyone would be provided for and we wouldn't obsess over paper. But the system is a sort of lesser approximation of fairness. "Worst one except for all the others", as the saying goes.
My response would be that everybody who supported me was paid to do so, so they already got their fair share. Except for my parents, but personally I don't think children owe their parents because the parents are the ones who make the decision to have a child, so they should bear responsibility for the children's existence, not the child (i.e. they're obligated to provide for the child they created).
>Sometimes I get approached by homeless types on the sidewalk and I give them a $20 or something. Occasionally it's been larger than that, often it's been smaller. One might call that being generous.
There's a big difference (or at least there is in my eyes) between voluntarily giving someone something, and being forced by somebody else to do so. People who oppose punitive taxation doesn't necessarily oppose it because they oppose charitable giving, they oppose it because they don't think people have a right to decide how other people spend their money. For the record, it seems that in the US conservatives give more to charity than liberals: https://www.nytimes.com/2018/11/03/your-money/republicans-de... .
That strikes me as a cynical read on the situation. Could it be that some of those people liked you, believed in you, wanted you to thrive for selfless reasons that were not economic?
> People who oppose punitive taxation ... oppose it because they don't think people have a right to decide how other people spend their money.
That's the thing, the "their money" part is sort of a fiction. Additionally it is totally fungible, not earmarked or put conditions upon, it doesn't go into a little pile marked "asveikau's taxes" for only the parts of government I approve of. We pool it, and it's all or nothing, take the good with the bad. We have elections for any disagreements that may arise from there.
Maybe that did, but it doesn't change that they did whatever they did without asking for anything in return. At least to me the idea of a system in which you owe somebody more for something they did (either something they did out of generosity or because you paid for it) than what you explicitly agreed upon is quite unpleasant. Like if somebody came to my house, asked "could I mow your lawn", and I was like "uh okay sure, I suppose so", then afterwards they were like "ah-hah, now you have to pay me $200!" or "ah-hah, now you have to clean my kitchen!", I wouldn't consider that very fair. Ideally an agreement/contract is only valid when both parties understand and agree to it.
>That's the thing, the "their money" part is sort of a fiction. Additionally it is totally fungible, not earmarked or put conditions upon, it doesn't go into a little pile marked "asveikau's taxes" for only the parts of government I approve of.
Well then that's where the disagreement comes from. For people who believe in property rights, money isn't a fiction, it's a proxy for the claim people have over the value of the product of their labour. For many of the American founders, it was a consequence of https://en.wikipedia.org/wiki/Natural_law . For economically conservative Christians, it was a product of the argument that commandment "Thou shalt not steal" is not waived merely because enough people have voted for you to steal. If someone believes for whatever reason in an inherent moral right to their property, they won't believe it's acceptable for that right to be violated just because other people voted to do so.
It's pretty simple when you realize the majority of the rich started as average people.
Wealth is relative, you're likely better off than 95% of the planet. Should we reduce your salary because of what a rural farmer makes in China?
And yes, we should prioritize everyone having a decent baseline quality of life. Excess wealth doesn't make people happier anyway.
1. https://www.cnbc.com/2019/09/26/majority-of-the-worlds-riche...
> "But you speak to a very American delusion."
It's called the American Dream. Freedom and opportunity to achieve your own goals, something people seem to take for granted until they go somewhere that doesn't have it.
> "Defend the ultra-rich because you think you will be one some day. You will not."
You shouldn't assume, but even if I never become a billionaire, I sure don't need to hate them for it. I defend their ability to attain success, not their wealth.
Here a snippet of an interesting article on this[0]: "Yet the opportunity to live the American dream is much less widely shared today than it was several decades ago. While 90% of the children born in 1940 ended up in higher ranks of the income distribution than their parents, only 40% of those born in 1980 have done so."
This correlates to the fact that wealth concentrates in few and fewer people around the world (the 1% for whom laws, governments, borders etc. do not exist).
It is not about a comparison with the people who are at their worst (and it will probably not be Chinese farmers but that is another topic). It is about fairness and an average level we can ALL agree to.
I want all people to have a meaningful existence and a life that they think is worth living because in my frame of mind this is fairness.
As long as people starve and children cannot afford to got to school and women are being used, sold and shipped like some goods etc. I cannot stand to see people who get so much more than they need just to spend all the money on stupid things (please take a look at some of their instagram profiles and youtube videos if you don't know what I refer to).
The best of behavior I saw is people like Musk who puts his money into businesses which hope to (really) "make the world a better place" - at least if this is true and not some sales pitch (we can discuss about this in a few years when there is more results I think).
Others like to frame themselves as "benevolent" super-humans who are giving away money to charities. This is "green washing" most of the times to improve their PR. The money they give is a joke and these charities do not change the world as you can see.
Why does someone need or even deserve to own 50 cars and 7 houses? No one contributes that much to the world that he would deserve that and especially not while others are dying because they cannot afford to buy food.
This "hard work" that is needed to become rich is using others and ignoring all moral implications in many times. I had two opportunities in my lifetime to become (kind of) rich and both where at least dubious in one way or the other. It is about cheating governments to not pay any or too much taxes and it is about customers who are willing to pay a huge amount of money for someone to "take responsibility" he does not really take in the end. Also you can cheat consumers like "big tobacco", sugar etc. do.
Staying in this position only took them some money to pay scientists, politicians and others to be legally sold or even recommended and advertised.
These systems are built by generations of people without moral (maybe they are raised like that) and inherited to alumni who are at least as numb and asocial.
=> No one deserves to be that rich no matter what they do. => They become rich by using people like you and me without moral implication or hesitation. => They try to uphold the "American Dream" so we stay quiet until we are as poor as the people on the bottom. (look at Warren Buffet who talked about the "War of the Rich against the Poor")
[0]: https://www.theguardian.com/inequality/2017/jun/20/is-the-am...
It's a tight knit community because there are only a few individuals who get to that level of management and can be selected from to lead (and are even open to a new position in the first place).
The golden parachutes are to offset a bad tenure from hurting their future prospects. There are several CEOs who aren't hired anymore (or anywhere near that level) because of their past performance and they lose their earning potential.
You make it sound like they'll somehow lose out personally by losing the company 1000x their salary and hurting the livelihoods of workers, like they're somehow being compensated for personal risk.
What you cited represents no personal risk to the CEO. They already made their millions. Now maybe if CEOs were actually liable for the damage they could do to the company and economy, would it be more justified.
This is like wanting to find a top-tier senior staff engineer for $30k/year in San Francisco. At the end of the day, the people who can do the job can also perform other roles, and those other roles already pay more than $1M/year. You have to convince them to take on an unprecedented amount of stress and responsibility and effectively act as a public figure with all the baggage that comes along with that. You also have to retain them and prevent competitors from hiring them and deploying them against you. That means you have to pay them more -- sometimes a lot more.
Also corporations partly exist to shield liability so CEOs are not going to be personally held responsible outside of gross negligence or criminal acts, the same way you wouldn't be held responsible if you caused a major outage in your company that lost customers. There is an general move towards more performance-based compensation though, which I think you would agree is a good thing.
And if I do a shit job I might have trouble getting hired too, but I'm not paid millions for it.
For some reason, I hear that they do fine all the time. Like https://en.wikipedia.org/wiki/Marissa_Mayer ?
I'm asking because Google isn't giving me answers.
This is true for all jobs...
Not to mention sometimes CEO's performing badly results in a golden parachute... quite a far cry from your grunt worker getting laid off with no pension or benefits.
Golden parachutes are not about performance, it's about change of control like a company takeover or merger. It's very common and happens to many startup founders that get acquired. It's also not much different than severance which is offered to employees at large corporations.
Golden parachutes are extra insulation for CEOs and their performance can definitely cause them to exit a company with a parachute that otherwise would keep them. It is like severance except wildly higher and more often than not there is no severance for average workwrs, especially nowadays.
Either way, originally you made a statement about a CEO having negative impacts from their performance, but the exact same thing is true of everyone. A public story of a CEO performing badly is just as ethereal as a recommendation from a past job. Neither is a death sentence or a golden ticket, it's just a job and if you do it poorly you will have negative consequences. Publicity could serve an exiting CEO regardless of performance, that is not hard to conceive. It's just a different level of job people aren't blind to that. But to say they take greater personal risk by being a CEO, I don't buy that, they take the same risk as everyone else. If you do well you get rewarded, if you do poorly you're future is negatively affected. There's really nothing to support it's so different for a CEO.
Being a CEO is not a 9-5. Everything and anything a CEO does is monitored by a cadre of people.
Exactly. The wrong decision costs _the company_ a billion, it hurts the livelihoods of _the workers_. Incompetent, even criminal, managers more often than not pay for their mistakes with early retirement and severance packages.
Winterkorn got a 10+m bonus when he stepped back and receives over one million in additional pension payments each year. That's the guy who is at fault for the Emssions Fraud Scandal. John Cryan, who oversaw the further demise of Deutsche Bank, was kicked with a 10m severance package. During his time as CEO, the Deutsche Bank share went from 30€ to 15€.
That doesn't have a lot to do with a public company.
Focusing on a single number is irrelevant, you must account for everything in the organization and the results.
Also nobody is stopping anyone from creating corporations with different compensation, but clearly there's a certain price required when you get to these levels.