[pixelatedindex]

> Often that person's leadership wasn't the problem

Then what is the problem? Ultimately you’re paid the big bucks for being held responsible. Why isn’t it never something like the CEO doesn’t get any stocks that year. I’m not saying he needs to leave the company but maybe he should take a substantial hit to his pay. He has enough money to put food on the table for many years, unlike the people who are let go where it’s mostly a mixed bag.

[s1artibartfast]

>Why isn’t it never something like the CEO doesn’t get any stocks that year.

Performance based compensation is absolutely standard for CEOs- Both in terms of options and stock grants.

[DrillShopper]

Do those metrics count "number of people laid off" explicitly?

We know they do implicitly because laying off people makes the company more profitable, but is there any penalty for killing jobs?

If not, shouldn't there be?

[s1artibartfast]

No, I dont think there should be a penalty by default.

The objective of a company isnt and shouldn't be to run a charity. Some amount of layoffs are desirable just as a matter of housekeeping. Layoffs can be a hard part of doing a good job.

I think there are extreme examples and tactics where layoffs cross a moral line but not a legal line. for example, I think the humane thing to do is freeze hiring before layoffs so you dont relocate someone only to let them go.

That said, there are already a lot of business incentives to avoid turbulence in headcount. It is slow and expensive to hire people and let them go.

[johnnyanmac]

>I dont think there should be a penalty by default.

I do.

>The objective of a company isnt and shouldn't be to run a charity.

Charities pay employees too. 501ks don't mean you run on all volunteers and that it's okay to remove them at your whim. Horrible metaphor.

Anyways, a company has 3 goals

1. serve the customer

2. support your labor to enable efficient production

3. overall stimulate the economy and society

These all help the bottom line of "make profit". Shareholders have little stake here so it's annoying that that is all they prioritize lately. because you then break all 3 rules just for them, who will leave on a whim for some other speculation. And then they wonder why they lose money as workers burnout and leave, as customers get frustrated and move, and the economy gets worse as money is pocketed to the rich instead of the public.

It'a all a horrid death spiral. It needs to stop. It will stop forcefully if not voluntarily.

>It is slow and expensive to hire people and let them go.

And who's fault is that? I don't remember shouting in glee whenever I hear 5 rounds of interviews, including 2 rounds dedicated to trivia.

>Its actually incredibly hard to to figure out which people to cut in an efficient manner.

it is. That's why Hanlon's razor simply tells me they aren't trying very hard. They need to cut numbers, maxiize money and care about next quarter next quarter. efficiency wasn' prioritized before the layoffs, why would it be now?

[s1artibartfast]

I dont think we agree on enough fundamental facts about the world to have a productive conversation. It seems like you are in denial about the possibility that some workers can be detrimental to bottom line profit and efficiency.

By the way, the charity comment wasnt about volunteers. Companies are not run as a non-profit charity with workers as the beneficiaries.

[johnnyanmac]

Yes we are. You're in denial that most of these layoffs are performance based, and not because of factors beyond their control.

If you're cynical about your peers to think that the default of them in the field is unprofitable and unproductive, we have nothing to say to each other. Learn some empathy.

[DrillShopper]

> Layoffs can be a hard part of doing a good job.

Yeah firing people is so tiring - might have to skip my tee time!/s

[s1artibartfast]

/s aside Its actually incredibly hard to to figure out which people to cut in an efficient manner. It is one of the reasons companies suck so bad at doing it, and many avoid layoffs and firing when they should be doing more of it.

[mulmen]

The purpose of a corporation is to make money, not jobs.

[s1artibartfast]

to play devils advocate, there are different levels one can look at that. From the level of the companies and owners, the goal is to make money.

From the perspective of society there are tons of answers. A common answer is that companies provide goods and services that give consumers more value than they cost, thereby enriching the lives of consumers.

It seems like some people, especially those who take issue with layoffs, tend to think the social purpose of companies is to give jobs/money to workers. This leads to a lot of frustration for those people because the entire economic system is set up such that jobs are an optional byproduct of making goods, not the other way around.

[duped]

We live in a society where there are more metrics than money. The entire notion of corporate amorality is a thin veil that people use to hide their own unethical and immoral behavior.

That's why I made the comment that layoffs are the trolley problem. It's an ethical question and companies don't always make the ethical choice, for example choosing profit over jobs in a downturn.

[s1artibartfast]

That presupposes an ethical obligation to provide jobs, which is of course at the center of this.

If you think companies have a ethical obligation to provide jobs and do so continuously, of course you will find issue with the rest of it. All objections stem from this, and it is controversial.

[duped]

I disagree, and think you're missing the forest for the trees. I think that people have an obligation to keep their promises to other people - that's a virtue called honesty or integrity. When a promise needs to be broken, that presents an ethical dilemma.

One example of people making a promise is hiring. A layoff is fundamentally breaking the promise you made to a group of people to keep them employed - whether that's the most ethical choice or not circles back to the trolley problem. If 20% need to be laid off to save the 80% then it's not an unethical choice. If 20% need to be laid off to make up for the mistake of a small group of leaders in order to benefit the small group of shareholders, then it's unethical.

> All objections stem from this, and it is controversial.

It's only controversial when you pretend that you can absolve an unethical choice by placing it behind the corporate veil. It's not controversial outside of Milton Friedman disciples.

[mulmen]

> The entire notion of corporate amorality is a thin veil that people use to hide their own unethical and immoral behavior.

Do you believe there is no such thing as an ethical layoff?

[duped]

No, but that specific sentence you're quoting is targeting a very specific bit of business ethics teaching that I find great issue with. IME no one making decisions like layoffs really believes in the amorality of corporate decisions, except the morally bankrupt. You don't find solace in the idea that a company only exists to make money when you're telling a father whose kids are about to start college that he needs to look for a new job.

[johnnyanmac]

There are. This isn't one.

[pixelatedindex]

> Performance based compensation is absolutely standard for CEOs- Both in terms of options and stock grants.

Yes but you’re still making $1.5M after a 34% haircut. That seems like a reward, and not any real sense of taking responsibility when you have to let go 1 in 5. Wouldn’t it be better if he just got a base salary of 200K or something and no stocks for that year? He already has a bunch of equity and if he does well at the end of the year, that equity will be worth more anyway.

[s1artibartfast]

In what sense do you think it would be better? Would it advance CEO performance or the company? Would it bring the world more into alignment with some sense of moral justice?

[pixelatedindex]

It certainly would be some real accountability. They didn’t perform well and they’re mostly compensated in equity, so they get less of it. When they perform better, they’ll get more equity. Why wouldn’t this encourages the CEO perform better? The sword cuts both ways.

[s1artibartfast]

You are describing how the world already works. The only difference is base pay. Why do you think lower base pay is better accountability and performance? They already have millions on the line. I imagine better base pay means better candidates.

[johnnyanmac]

>Why do you think lower base pay is better accountability and performance?

it really doesn't matter. Because you don't just apply on linkedin and get interviewed for a CEO position like this. You're already a millionaire if you're being considered for a million dollar position. It can be charity work and I wouldn't care because you probably accrue money passively anyway.

>They already have millions on the line.

and if they fail they have millions left. oh no!

the outcome can be equal but the opportunity never was. And it's a real shame people with these safety nets actively work to erode the pittance of safety nets he government gives to people who make less than them in their careers than they do in a few months.

[sangnoir]

And who sets the standards? Their CEO-buddies on the boards. None of them would dare rock the boat.

One of the failure modes of 401ks and investment funds are large investment pools that don't vote at AGMs, leaving boards largely dominated by CxOs, to their own devices.

[s1artibartfast]

Either you dont understand my point, or I dont understand yours.

Im saying CEOs have financial skin in the game tied to company performance. They get less, often much less when the company shits the bed. This was in response to a parent post that seems to think CEO comp is entirely isolated from performance.

[sangnoir]

You probably didn't understand my point. You said CEOs are paid that way because it's the standard. In your opinion, who sets the standards for CEO compensation, and what are their day-jobs? The majority of boardmembers happen to be C-suite executives themselves.

My thesis is that the boards of public companies have been captured by the executives, and the diffuse shareholding has been ineffective in providing oversight to the boards at AGMs. If SWE (or teacher) remuneration were determined by a (nominally independent) subcommittee dominated by other SWEs (or teachers), I posit that incomes for that role would outstrip other roles at the same organization over multiple decades, due to biases and knowing who butters their bread. It would become standard practice, naturally.

[s1artibartfast]

Okay, I think we are both misunderstanding then. My original point was a fairly mundane one. Pixel was asking why CEOs don't suffer substantial financial cost for bad performance. My point was simply that they do! Poor performance often incurs millions of dollars of opportunity costs to CEOs. I suspect that the deeper question was why don't CEO suffer more than just opportunity cost, in harsher way that would be more emotionally satisfying.

You raise good questions about how prevailing compensation is set and the relative power of corporate governance. I tend to agree that executives have a lot of leverage and it seems like boards are relatively weak. They don't have a lot of incentive to pinch pennies push back on CEO compensation. There's a pretty huge cost to shareholders if they want to fire or even replace a CEO, and uncertain upside.

There might be some class/roll solidarity going on as you propose. However, I think the bigger factor is that minimizing CEO comp simply is not a priority for boards and shareholders, despite the attention it gets from outside critics.

[geodel]

Held responsible for what? The what part is written in contract for execs, movie stars, sport persons. I have not seen in any category people not getting paid per their contract for poor performance.

[teitoklien]

The ones out of job can join a different company, america’s unemployment rate especially in the tech sector tends to be low.

Them doing layoffs doesnt mean the people become destitute.

It is better to layoff people who are not adding value to a company, so that those newly unemployed folks can join a different company and build great products and add more value to the economy.

Ofcourse this only applies to US tech sector where hiring is tight. Especially when coming out of top tier companies like dropbox on your resume.

I don’t think its that dramatic, folks who tend to hold similar ideologies like you state, tend to not even bat a single eye, when average americans who lack the privilege of a tech worker lose their job to automation (with tech) or outsourcing or due to overburdened climate regulations and redtape leading to fewer factory jobs in America.

This is not the titanic, those people will move on to places where they’ll have a chance for promotion.

[dandellion]

Whenever people are laid off where you work, I suppose you always volunteer to take their place? Since according to you it's only such a minor inconvenience I think it would be hypocritical of you to not to offer to take their place.

Grandparent is not even saying that it should be avoided, just that the CEO should face some accountability from it. In many cases they have none at all, whereas the impact on the employees can range from actually quite low (as in your example) to very high. In fact there is no upper ceiling to impact to the worker which is the real problem. From the horror stories I've heard about the US they could even lose health insurance and end up with someone in the family dying because they can't afford treatment. Accountability is good precisely when there are such asymmetrical power imbalances, where one person makes the decision and someone else bears all the consequences. Either you add some feedback loops or the imbalance grows unchecked until it becomes unsustainable, and eventually you end up with a war of independence, or a French revolution and things like that.

With just a bit of empathy it should be easy to understand why accountability is needed in such situations to keep a good social dynamic long term. Someone with the empathy of a river boulder might think it's just people behaving irrationally, but I suggest you look into game theory and you'll see how some seemingly irrational behaviours like tit-for-tat are not as irrational as they seem.

[johnnyanmac]

>The ones out of job can join a different company, america’s unemployment rate especially in the tech sector tends to be low.

>Ofcourse this only applies to US tech sector where hiring is tight.

So, which is it? Will we move on or wont we?

>tend to not even bat a single eye, when average americans who lack the privilege of a tech worker lose their job to automation (with tech) or outsourcing

They keep trying to re-outsource tech every decade and we're in another wave. Why would I not be batting all my eyes at outsourcing?