> If the CEO of the world's first trillion dollar company can't make a lot of money, then who can?

Isn't this completely contradicted by

> It's a free market.

?

Wouldn't you expect that a company operating on free market principles went for a good but cheap option? Instead when you look at these companies it is always people born rich and well connected. Even better when you include Theranos, you can have a family history of con artists and the people in these circles will still throw money at you for decades. I would say the market for CEOs is about as free as an Italian getting a pair of custom concrete boots by the local mafia.

Edit: Just checked Cook actually doesn't seem to come from a family that rich. So used to it and when I write a comment I manage to refer to the one guy who wasn't born rich.

When the news broke Steve Ballmer was stepping down Microsoft stock jumped $2 billion. If it’s possible to be worth -$2 billion it’s possible to be worth $100 million.

It remember that is was far more than that.

Without having invested too much time into this, Microsoft's market cap back then was around $270bn, and the stock rose by around 7% on 2013-08-23, the day is retirement plans were announced. So the stock jumped close to $20bn.

Historical prices according to Yahoo on 2013-08-23: closed at 34.75, previous close was 32.39.

I haven’t read the article, but I assume it is 100mm annually not a lifetime achievement award.

> Wouldn't you expect that a company operating on free market principles went for a good but cheap option?

In an ideal competitive free market, there is no “good, but cheap” option; the marginal cost equals the marginal value delivered.

Not really. In this case there is also a huge serving of sunk cost fallacy: how will we cope if Tim leaves?

What unique value does Tim bring to Apple that someone else can’t? Apple has been missing Steve Jobs’ pedantic attention to detail for a while, perhaps Apple would actually be better off with someone else? But they aren’t going to try because they don’t want to spend the effort looking.

Apple is the first company in the world to hit 3t and under Steve's care. Saying they haven't replaced him because they haven't bothered looking is absurd. Why bother fucking with the most valuable company in the world. That's like saying LeBron James is only on the team because no ones bothered to find anyone better.

Also, free market doesn’t mean you’re not allowed to get upset about anything that happens.

Yes thinking that good CEOs would be cheap in a free market shows you have essentially ZERO understanding of basic economics, just like the author who thinks there is a specific ratio that CEO pay is not allowed to be relative to the average employee, which is obviously weighed by the large number of lower level employees.

The fact that Tim Cook ONLY costs 1447 times what an average employee costs is a real bargain.

There are 10s of 1000s of average employees. There was effectively only one Steve Jobs until Tim Cook proved he could be Tim Cook, and as a shareholder I would not want you to try and nickle&dime the guy who has created so much value for shareholders.

Yes, the CEO is the chief value creator because ultimately he decides who remains at Apple, he sets the overall strategy and HE has to take full and final responsibility in front of shareholders for all results good or bad.

Mr Middle Manager or Mr Programmer is not going to be called in by the board to explain any problems with profits or growth. Mr Programmer is important but there are more people that can do his job as well as him, as there are people who have a proven track record running an Apple or similar.

Shareholders that buy Apple stock do so at least in part because Tim Cook is the CEO. Sure I first look at the business fundamentals and the valuation, but Tim Cook's proven track record is a major part.

Go watch Buffet interviews on YouTube to hear how highly he rates Tim Cook.

I've never heard Warren Argue that Tim is overpaid, and yet Warren is a very large shareholder.

It's easy for people with very little stake in Apple to have strong opinions about what the Apple CEO should be paid.

If shareholders buy Apple stock in part because Tim Cook is the CEO and not some new unproven person of dubious merit, how much is he worth paying? A lot

I hold some Apple stock, and I'm not revolting.

I’m glad you’re not revolting. That sounds like it would be a bummer.

I do shower at least once a month.

Yes, yes, but ... can shareholders get the same Tim Cook value for less? Would Cook hand in his resignation if the board says that let's halve this bonus package? I guess Cook might lose a bit of morale, but it's not like he'll just post on r/antiwork send an email to everyone and walk away...

> Wouldn't you expect that a company operating on free market principles went for a good but cheap option?

No, I expect it to do what the market can bear. “The market“ can be a single person and single entity, a trade between two market participants where of course, any price is a market-good price.

Good simply meaning a transaction occurred and settled, while bad meaning it did not. Those are my expectations. Doesn't mean thats what I would do or negotiate or whether I would mildly chuckle at what was negotiated.

> Wouldn't you expect that a company operating on free market principles went for a good but cheap option?

I do not follow that logic. Why should they choose to make less money?

So just to get this straight: you argued that Tim Cook only got there via his rich family, even before you knew whether that was true.

I may be a bit jaded, a lot of rich people like to pretend they where poor and that their success is entirely self made. Stories like Theranos reinforce the image that the social circles are mostly static and unchanging no matter what the people involved are up to. I checked a bit late in this case but oce I saw some sparse evidence to the contrary in this case I corrected myself.

Question is - does he need to?

I don't know about you, or Cook, but where i live, everybody needs. When you don't need they look at you like at an alien. They even teach children in school that there are 2 important things in life: money and power.

Back to Apple: if they start to look at 99 Milions $ maybe you shall search for another supplier. Just saying.

Who or what determines what someone needs to earn?

How much do you earn? Could you survive if you got paid 15% less? How about 50% less? Well, if you don't need it then, how about we just cut your pay based on what some arbitrary person decides you "need".

Well in this case, the board and shareholders.

They don't determine how much Cook or anyone needs to earn, they determine how much they are willing to pay to get the CEO they want.

> Who or what determines what someone needs to earn?

As the song says: "Oh Lord, won't you buy me a Mercedes Benz? My friends all drive Porsches, I must make amends"

Question is - is it anyone's business what a company pays its CEO beyond those who own it?

I know of one entity whose business it is; the government. They could heavily tax him (or find new ways to do it), or even legislate top allowed compensations.

They don't do that now, but it's perfectly within their rights to do so if politics takes a hard left.

> but it's perfectly within their rights to do so if politics takes a hard left.

I don't see that happening the USA.

But we’re talking about pay, not taxes.

Of course the government could tax him heavily - that’s not the question at hand.

Shareholder vote surely is "those who own it".

Yes, it's the shareholders business for they own the company.

That’s why I said “beyond those who own it?”

Theoretically, no. But look what a beautiful thread is on HN. Religion has thought mere mortals to be interested in the life of gods.

Is it?

Its free market and the shareholders can say what they want its not a dictatorship.