[necrobrit]

Interesting. This is a pretty common criticism of unions in the anglosphere as well -- often alongside a note that the problem has been "solved" in Germany via worker codetermination.

Have you found this situation to be universal in Germany or only at some employers? This is one of those things I'd actually expect "the market" to be good at regulating. Bad union or management kills a company, company with better management or union fills the market void etc...

[gyulai]

This was the only company with worker codetermination that I've ever worked at, so I don't have anything to compare it to. Part of the reason is that, as the article says, companies will try at all costs to avoid it when there is legally a way it can be avoided, and I'm guessing that this in and of itself speaks to the fact that there's a problem there. Otherwise you might expect companies to volunteer into it for reasons of improving their employer brand and so forth. But the opposite is the case, with many large companies going as far as incorporating in other European jurisdictions and using European freedom-of-movement rules for legal entities to operate out of Germany. N.b.: This confers no tax advantages. It is done solely for the purposes of escaping Germany's companies' law. (Examples: The German department store "Müller" with over 700 retail locations in Germany and "Air Berlin", a major airline out of Germany, were incorporated in Britain).

[int_19h]

Why would a company's board of directors volunteer to, basically, hand off a significant part of their power to somebody else? Somebody whom they know will definitely not optimize for upper executive compensation.

[gyulai]

Actually, executive compensation is usually subject to board approval. The board is answerable to the shareholders. Executive compensation hits a company's bottom line, and therefore shareholders' pockets. Shareholders are perfectly well-placed to keep executive compensation low, if they feel that that's what gets them the best value, or allow it to go high (with that compensation coming from their own pockets) if they feel that that's what gets them the best value.

I really don't see where employees come into this equation, other than perhaps wanting to keep executive compensation low for reasons of petty jealousy.

[AlexandrB]

This is extremely naive. One reason executives get more compensation is because they frequently sit on each-other's boards and are more than happy to scratch each-other's backs. At large companies, most shareholders are "institutional investors" (rich dudes managing other people's money) and are not going to be showing up to shareholder's meetings complaining about executive compensation.

Meanwhile those same shareholders are very happy to complain about worker's compensation[1], for reasons of petty greed.

[1] https://www.salon.com/2017/04/28/labor-is-being-paid-first-a...

[gyulai]

If shareholders were indeed "rich dudes", then why do you have a problem with rich dudes paying too much money to other rich dudes for being executives? With that logic, "normal" folk don't even enter into the equation, do they?

Institutional investor is not a euphemism for "rich dudes". Institutional investors are overwhelmingly things like pension funds and insurance companies, whose clients are people like you and me. -- Even more so in Europe, where stock ownership by individuals and private equity makes up an even smaller proportion than it does in the U.S., and top-level executives in large corporates still make a lot of money.

If a pension fund wanted to, it could represent the interests of pension fund holders in general meetings, although I will grant to you that they don't usually live up to that duty. But that doesn't mean that such a thing as shareholder activism doesn't exist. We are seeing increasing activity by agencies who collect proxies from institutional investors to push for change around certain issues at shareholders' meetings.

...even with all of that discussion, I really don't see why employee activitsm is needed over shareholder activism to rectify the situation, if indeed there were something wrong with the situation.

Furthermore, I don't believe that there is anything wrong with the situation: A C-Suite executive at an S&P 500 corporate or a EuroStoxx 500 corporation should, in my opinion, make more money than a football player or Hollywood star, because what they do is actually more valuable. -- For some reason, the general public never complains about the level of compensation of the latter, even when, as is the case in Europe, it is the taxpayer who pays for this through mandatory contributions to public broadcasting (which, in turn, get used to pay for broadcast rights to sports events and so forth).