[Workaccount2]

Public company CEO pay is almost always paid by shareholders not by the company itself.

It's so misleading that these "CEO compensation is 100x employee pay" stats always get kicked around like it is an apples to apples comparison. It's not.

CEO's get paid in stock which they need to redeem from shareholders. Employees get paid with cash which them redeem from the company's checking account. They are different sources of money.

It's so annoying that this keeps getting repeated, on and on and on. It's totally disingenuous.

[pjc50]

The company's checking account also belongs to the shareholders, albeit indirectly.

The remarkable thing is how readily shareholders will accept narratives which give the CEO very large amounts of compensation. The notorious $50bn is a high mark: https://www.forbes.com/sites/antoniopequenoiv/2024/06/13/tes... - but that is very much taking value away from shareholders and handing it to the CEO in huge amounts.

[Workaccount2]

It doesn't indirectly belong to share holders, it directly does.

But that doesn't change the fact that employee's are paid with money that is generated by the business itself. Stock compensation comes from the wallets of shareholders and is totally disconnected from the operations of the company (although generally proportionate).

[anticensor]

Indirectly as in separate legal personhood from the shareholders themselves.

[JohnMakin]

Yes, but we can all agree that stock/$ is pretty fungible and can be exchanged for goods and services in pretty much the same way. So effectively, it is apples to apples.

[Workaccount2]

Stock/cash is not fungible for the company itself. Using shareholders as an ATM is a surefire way to tank a stock, and companies tend to use it as an absolute last resort.

[JohnMakin]

We aren’t talking in the context of the company though. The gp comment said it’s not an apples to apples comparison to say a CEO makes 100x an employee because CEO’s compensation is stock.

If the CEO’s stock compensation has a monetary value of $100 and the employees salary is $1, it absolutely is fair to say the CEO is compensated 100x the employee, regardless of it is stock or cash. The CEO can borrow against this and use it as effectively cash, if they are unable or do not want to exercise the options. This is such an insanely common practice and absurdly pedantic argument that I wonder why we’re even having it. Does the distinction matter? Of course it does not.

[Workaccount2]

It's not apples to apples because it is in essence two different employers. The CEO does not work for the company (this why you see that $1 CEO salary so often), the CEO works for the shareholders. But the employees work for the company. They are two distinct entities with two distinct finances.

If a company does layoffs and the CEO still gets paid, that is perfectly logical because the company was never paying the CEO in the first place. Whether or not the CEO got his $5 million compensation package has no impact on whether or not the company could have laid people off, as just about everyone portrays it (and thinks how it is).

[runako]

Can pretty quickly see that the CEO comp # in question is not the stock. Houston sold many times more than $1.5m in stock in 2023. The $1.5m is likely direct cash and services.

[pclmulqdq]

He owned a huge amount of dropbox before it went public. $1.5M is the money from the company to him (likely including stock compensation).