[davvolun]

Exactly, pensions were considerably more common in the 1960s also, but at the end of the day, I don't really care if my retirement is actually funded by a pension or a 401k or by stuffing dollar bills under my mattress, I want to know when I can retire and how comfortably I can live when I retire.

Yes, getting into the weeds is valuable, but here we're talking about the money in your bank at the end of the day, and that CEO salaries haven't changed much doesn't say anything.

Yes, a CEO should be making more money than the average employee. The debate is over how much -- why do CEOs get absolutely massive bonuses and golden parachutes and stock options and for employees it's expected that you put in the work in the hope of future recompense in terms of bonuses, promotions, etc.

[lanstin]

Didn't you just say the stock owners were being diluted by the CEO compensations? Doesn't that include the 401k and pension funds? Isn't this is a massive transfer of wealth the the managerial class, justified simply because they can do it, and leave the consequences to others to clean up.

[idiotsecant]

Bingo. The massive growth in the stock market in the past 40 years is directly a result of the massive inflow of capital from middle class 401k purchases. Overinflated CEO compensation packages are a way to siphon some of this into the pockets of the ruling class.

[refurb]

No it’s not due to that. How do I know? Look at PE ratios. Stock prices are backed by earnings.

[bumby]

I think the Cyclically Adjusted PE ratio is more useful in this regard. It does seem to point to overinflated prices compared to earnings. The current PE ratios are only surpassed by those during the dot-com boom when people found it difficult to create valuations grounded in reality. One theory is this is due to access to cheap capital in the last decade +

https://www.multpl.com/shiller-pe

[WalterBright]

> why

Because their decisions can drive a company into bankruptcy or transform it into a trillion dollar company. Your average line employee has no such leverage from their actions.

[refenestrator]

That would make sense as a post-exceptional-transformation windfall. Not as standard comp for keeping the seat warm while saying "yeah do more of that thing that prints money".

[WalterBright]

Why would any company hire a CEO and pay him millions to warm a seat? Why would the stockholders put up with that?

[refenestrator]

I don't know, but half of them are below average by definition.

Take a scan down the Fortune 500 and put a star next to each one you think has had 'exemplary leadership' rather than 'competent administration' or 're-arranging deck chairs while the titanic burns'.

The CEO of eBay got busted sending bloody pig masks to people who left bad reviews on the internet, for god's sake. These people aren't a higher plane of being.

[bobthepanda]

Stockholders are increasingly not putting up with it. Votes against are still kind of rare, but they do happen: https://www.restaurantbusinessonline.com/financing/starbucks...

But also, the board makes CEO decisions, and it's not totally uncommon for board members to also be CEOs of other companies, so they buy the kool-aid because they also benefit from it.

Plus, CEOs and boards don't exist in a vacuum. You've got to keep up with the Joneses if you think you're letting a good candidate get away.

[WalterBright]

The stockholders can revolt. If they don't, and it's their money being handed to the CEO, is it reasonable for non-stockholders to gripe about it?

[po8crg]

Almost everyone owns stock in all the major companies - indirectly via their 401k or index fund.

To a first approximation, there are no non-stockholders.

One real question is why, when stockholders vote on CEO compensation, fund managers are allowed to cast the votes of fund investors. If you invest money on behalf of other people, there are all sorts of fiduciary duties to keep the money separate, but that money gets you votes, and you get to vote them according to your personal preferences, not according to the preferences of your investors.

[refenestrator]

We're all stockholders, and anyone with a 401k is, by way of Vanguard and Blackrock.

[greedo]

Tim Cook.

Compared to Steve Jobs, Cook is milquetoast. He's fantastic at supply chain management, and milking existing products/services. He's exactly what stockholders have wanted for a CEO after the Jobs died. Someone to basically do the same thing for decades. Milk the iPhone for all it's worth.

Yes, I know he's introduce the Watch and AirPods. But he also introduced the HomePod. He's no tech visionary, and eventually his value will drop and Apple will need a new leader. But for now, he's warming the seat.

[WalterBright]

Do you really believe Cook is just warming a seat? There's a lot more to running Apple than being a visionary.

I'm an Apple shareholder since before Cook, and admit I was skeptical about Cook. But as a shareholder I'm very happy with Cook's leadership. If his compensation is $$$$, that's cool with me.

BTW, Jobs was a visionary, sure. But that wasn't enough - he nearly wrecked Apple through mismanagement. Next Inc. bombed due to his mismanagement as well. But Jobs learned how to run a company with his management of Pixar, and then returned to Apple as still a visionary, but with management competence.

But hey, I might be wrong. Let us know how your shorts on Apple are working out.

[greedo]

I don't own any stocks directly, I prefer index funds. But I've owned Apple hardware since 1984, so perhaps I've invested in Apple through side channels.

I'm sure Apple shareholders are happy with Cook's leadership. AAPL has done very very well in the last 20 years. But is that due to Cook, or is that inherent in being CEO of a company that created the iPhone? Would Scott Forstall have been as effective in driving the stock price higher had Tim stayed as COO?

Imagine Apple today without the iPhone. It would still be a 2nd tier personal computer manufacturer with a recognizable design aesthetic. But everything that makes Apple the trillion dollar gorilla stems from the iPhone. Not only the outsized profits from selling 200m units a year, but without the iPhone, there's no iPad. No watch (same cpu designs). And no M1 Macs to boost sales to 2x the previous year. All stemming from a bet Apple made in 2004.

[FireBeyond]

And when they drive it into bankruptcy, the company will still go to court to argue that these bonuses, compensation, parachutes should be paid, regardless. Win-win game. Except for the employees and shareholders.

[WalterBright]

Stock based compensation goes to zero in bankruptcy.

[lanstin]

Usually somehow the execs have sold out just before the bad news, while the regular employees haven't liquidated their 401s/stock plans.

[WinstonSmith84]

Usually? Please ...

That's called insider trading and those who do that ends up in jail or at best have to hide in the sun for the rest of their life.

[paulmd]

A recent example would be Intel's CEO Brian Krzanich dumping as much stock as he could after learning about Meltdown and before the news went public.

https://arstechnica.com/information-technology/2018/01/intel...

The article also cites Equifax's CEO selling before the news of their data breach went public.

And that's just the ones that are prominent enough that everybody knows about it.

[bumby]

There's of course legal ways to do similarly. I thought this was a good example of John Krafcik's resignation which to a certain extent meets the same aim:

Official resignation letter:

https://blog.waymo.com/2021/04/capstone-of-my-career-email-f...

"Interpreted" letter:

https://gist.github.com/ChuckM/ff5fc8c800c7fe9160483b68ec45a...

[ivan888]

Is "hide in the sun" an idiom I'm unfamiliar with? Genuinely curious about what this means