He is clearly working there for reasons other than money, at this point.
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?
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.
The arts sector has a higher proportion of people with wealth because it doesn't pay very much, not the other way around. i.e. they are the only people with the required educational background who can afford to take those jobs. It's not like the arts organizations are trying to figure out who to employ and say "hmm, if we decide to have low pay, we can recruit a bunch of trust-funders and spouses of investment bankers".
By and large, it doesn't matter what your personal situation is when the market sets pay for a position. The comp package for a staff software engineer in SV is X, and it's not going to be X * 0.5 because the employee has a trust fund or X * 2 because the employee has seventeen children, five of which have expensive medical conditions.
The whole reason that boards have compensation committees is to figure out what the "right" level of executive pay is. It doesn't matter who is in that seat. If Apple decides to pay Tim Cook only $1, then what kind of a signal are they sending to the people who might replace him? Instead the board is going to set reasonable, market pay and if Tim Cook wants to give it all away through philanthropy, or even waive the entire package (i.e. taking all but $1), then that's up to him.
Yes this is obviously true. If the pay is low and you’re poor you’ll go elsewhere if you can. But my point is those rich people stay in that field even tho the pay is low, because they like the work. I suspect most CEOs would stay in their job if you cut all CEO pay by 1/10th, not that doing that would make their job low paid. As long as you did it across the board, instead of just at one company. My evidence for this? In 1985 ceo pay was 30x the average worker. In 2015 it was 271x. That’s a 9x increase. And yet in the entire period from 1985 to 2015 there were plenty of people seeking the job of CEOs.
You’re telling yourself a free market capitalism just-so-story. This is the way it is, therefor this is the way it must be. But there are plenty of non-free-market forces that push ceo salaries higher. Monopolization is a big one. Tax code is another one (stock grants as pay pushed rates up), etc.
There are obviously non-free-market forces that affect compensation but none of them work by considering the individual; they all start by considering the position and the market for the position.
The number of people looking for the position is also a meaningless metric. Go anywhere on the internet and you can find people who are desperate to get software engineering jobs and yet somehow compensation keeps going up. Only the availability of qualified candidates and the competition for them matters.
> There are obviously non-free-market forces that affect compensation but none of them work by considering the individual; they all start by considering the position and the market for the position.
Free market does NOT apply when you consider the individual. Considering the individual, there is no free market value to Tim Cook, because Tim Cook has a monopoly on Tim Cook. A monopoly is not a free market. Which is, of course, why he can ask for 100M/year in compensation... but it's not necessarily a good reason for anyone to pay that amount.
Anyway, all of this is academic. I'll be voting with my shares to block the pay hike, but that position will almost definitely lose.
If you cut the max pay of doctors to $50K/yr, in 20 years, you’d have a lot fewer high-achieving students going into medicine and doing something else (law, engineering, etc)
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.
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.
Perhaps I misinterpreted you post. If that is your position, than I totally agree.
>So, it’s being put to a vote and they could deny it, and if they do the question is will he walk?
I think that all depends on the alternative proposal. I think they most likely outcome if it passes is that Tim Cook will be offered more money but with a longer lockup schedule. If they came back and said "hey richie, you have enough in the bank and should work for the average salary", I think it is likely he would walk, even if he is not primarily doing it for the money.
That's not how perspective works.
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.
Either way, two entities came to a voluntary agreement on an exchange of services and compensation. I have not heard of a better model yet.
If the issue is income/wealth gaps in society, then that is better solved by implementing huge marginal income/wealth taxes such that the can be rewarded hundreds of millions of dollars, but they will only end up with a small portion of it.
~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.
He's just not that unique. The employees should be paid more and Tim should be paid less.
His value is being Tim Cook: Apple CEO since 2011. This is something that nobody else on the planet has and 1,000 engineers can't build.
The problem is, frequently everyone else doesn't get to play a second game.
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.
Fixed my comment, thanks for pointing that out.