corporate america: we had a record 2018, so we're cutting 8% of the workforce

[RPM 26315]

Looks like things started spiraling out of control around '95.

 

[Pato del Muerto 52485]

So what happened around 1995 such that ceo compensation suddenly and dramatically rose in comparison to before?

 

[bluto 4912]

Southwest conference died? 

[FartingMonk 3606]

Something called the internet maybe you've heard of it before.  Prior to that I would assume that most industries were pretty stagnant and billion dollar companies didn't just pop up over night.  

Edited February 16, 2019 by FartingMonk

[TwiceHorn 31438]

9 hours ago, Dr. Beeper said:

Specifics counselor. Get specific. If your argument boils down to “some people in any walk of life are bad” then no shit.

It's not an argument, it's pretty much factual.  People are (or are trying to get other people) pissed about wealth and income inequality.  Most people don't have the foggiest clue how that inequality arose.  One concrete example that can be pointed out is CEO pay relative to janitor or mailroom pay.  But at least the CEO leads a corporation that provides some tangible value to the economy that even Joe Sixpack can appreciate (their products or services, the employment of thousands, for example). 

Joe Sixpack doesn't understand investment banking or ibankers salaries and least of all what, if any, contribution they make to society.  If he did, there would be more grousing about Wall Street than there is.

Joe Six Pack doesn't grouse as much about orthopedic surgeon's salaries or pro football player's salaries, because "muh back" and "muh super bowl."

[Nice Guy Eddie 13508]

Most likely the average ceo isn’t doing anything special that someone else couldn’t do for much less money.  But now corporate boards have gotten caught up in high ceo compensation and can’t get away from it.   If one board decides to put their foot down and drop comp by 50%, then no one wants to be their ceo.  Even when they find someone, that person will leave a year or two later to double their salary.

[TwiceHorn 31438]

1 minute ago, Nice Guy Eddie said:

Most likely the average ceo isn’t doing anything special that someone else couldn’t do for much less money.  But now corporate boards have gotten caught up in high ceo compensation and can’t get away from it.   If one board decides to put their foot down and drop comp by 50%, then no one wants to be their ceo.  Even when they find someone, that person will leave a year or two later to double their salary.

What has happened, I think, is that salaries have become untethered from any notion of real intrinsic value and solely to "the amount of money they bring in."  Granted, that amount of money is supposed to represent that intrinsic value, but  . . . .

It's because of fiat currency and deficit finance  . . .  (this is a joke, but not really).

[Nice Guy Eddie 13508]

If the decision makers want twicehorn to be the ceo, and twicehorn demands 25% more than they wanted to pay, why won’t they pay what he wants. It’s probably a relatively small amount when compared to the overall revenue of the company. And if twicehorn fails, they can point to saying that they hired the best, and it’s twicehorns fault if he failed.  If the board went with the 2nd or 3rd choice to save a few dollars, then his failure might be on them.

and for a public company, it’s not the boards money.  I would imagine that private company ceos, who are also not the owner, get paid much less.

[Guest]

7 hours ago, Pato del Muerto said:

So what happened around 1995 such that ceo compensation suddenly and dramatically rose in comparison to before?

 

[happyfunball 481]

What are you trying to imply?

There have been plenty of studies showing almost no correlation between CEO pay and stock performance. There is an argument albeit weak that CEO pay is correlated to size of firm but those studies have shown it can only explain less than 30% of the growth in CEO pay if my memory is accurate.

[Guest]

are you suggesting it doesn't matter to stockholders/ boards how their firms perform in massive swings of the stock market?

LOLz.

economics doesn't mean shit, right?

[elfenix 34223]

4 minutes ago, slorch said:

are you suggesting it doesn't matter to stockholders/ boards how their firms perform in massive swings of the stock market?

LOLz.

economics doesn't mean shit, right?

the question you're begging is whether CEOs have anything to do with it, or whether they're just along for the ride.

[Guest]

18 minutes ago, BurntEyes said:

No Slorchy that isn't what he was saying. Try reading it again really slowly. Maybe wait until Monday afternoon should help with the comprehension.

Got Dayum I love a good Slorchin. Thanks for Slorchin it up Slorchy my man.

Happyfunball says this: There have been plenty of studies showing almost no correlation between CEO pay and stock performance.

 

I can read good.  Maybe homeboy needs gooder words, but it defies logic that growing value in the stock market wouldn't correlate to better pay for the people directing those organizations.  The growth is almost identical... yet it's just coincidental, right?

Edited February 17, 2019 by slorch

[Guest]

Dude from Harvard seems to think equity investments are reason #2 for high CEO pay, after  how developed the country is.  

https://hbr.org/2015/05/the-factors-that-lead-to-high-ceo-pay

Then there's this excerpt from another article:

Of course, many executives earn their million-dollar salaries by returning value to shareholders, hiring new employees, spotting trends before their competitors and continuing to grow the business. What’s more, they often have extremely high goals that are set by the company’s board of directors. “The skills of executives may be particularly scarce, and CEOs have a much larger impact on firm value than rank-and-file employees, which can fundamentally change the nature of the optimal contract,” the report found. 

 https://www.marketwatch.com/story/the-depressing-reason-why-executives-receive-such-massive-salaries-2017-07-17

 

earlier poster asked what happened in 1995 and I showed him.  happyfunball said some words with no links to support them, while also proposing no explanation other than to say I was wrong.

Then I get accused of slorching it up, or providing logic to y'all's class war.   LOFuckingL.

Edited February 17, 2019 by slorch

[luke duke 6412]

We tolerate far greater crimes against humanity every day.

[Guest]

Reported...

 

[elfenix 34223]

4 minutes ago, slorch said:

Dude from Harvard seems to think equity investments are reason #2 for high CEO pay, after  how developed the country is.  

https://hbr.org/2015/05/the-factors-that-lead-to-high-ceo-pay

Then there's this exceprt from another article:

Of course, many executives earn their million-dollar salaries by returning value to shareholders, hiring new employees, spotting trends before their competitors and continuing to grow the business. What’s more, they often have extremely high goals that are set by the company’s board of directors. “The skills of executives may be particularly scarce, and CEOs have a much larger impact on firm value than rank-and-file employees, which can fundamentally change the nature of the optimal contract,” the report found. 

 https://www.marketwatch.com/story/the-depressing-reason-why-executives-receive-such-massive-salaries-2017-07-17

 

earlier poster asked what happened in 1995 and I showed him.  happyfunball said some words with no links to support them, while also proposing no explanation other than to say I was wrong.

Then I get accused of slorching it up, or providing logic to y'all's class war.   LOFuckingL.

here's that number 2:

The more developed markets increase ownership “dispersion,” or the number of people who own shares in a company. Greater dispersion, writes Greckhamer, “implies

reduced owner-control, which should increase CEOs’ power to allocate more compensation for themselves.”

yeah that really sounds like the CEOs are doing a bang up job driving shareholder value.

[Guest]

I didn't say it was morally/ ethically pristine.

I answered the question though.

Boards and shareholders gotta do their due diligence too.  We seem to be lazy fucks on many fronts.

Easier to yell at clouds.

Edited February 17, 2019 by slorch

[elfenix 34223]

2 minutes ago, slorch said:

I didn't say it was morally/ ethically pristine.

I answered the question though.

Boards and shareholders gotta do their due diligence too.  We seem to be lazy fucks on many fronts.

Easier to yell at clouds.

 

49 minutes ago, elfenix said:

the question you're begging is whether CEOs have anything to do with it, or whether they're just along for the ride. 

no, you really didn't.  you posted a blurb with a bunch of factors, and you didn't even read the blurb since you'd have known the guy who did the scholarly work was from LSU rather than harvard, and none of the factors say 'CEOs aren't along for the ride,' in fact, most of them shade the other way.  the other thing you posted was 3 hypotheses at best, not an actual study.  you didn't even really look at the pretty spider graph, which might make you wonder if US CEOs are really 2.33x better than their german counterparts and 7x better than their japanese counterparts.

[Guest]

Ok...the rise in CEO pay since 95 doesn't mimic almost the exact same rise in value of the Dow...

 

You're right.

 

It's just people stealing...and then companies are negotiating to get stolen from by even bigger stealers.

 

 

Edited February 17, 2019 by slorch

[hornbri 1394]

Not getting the hate for Slorch on this one. Someone asked what happened around 1995 that could be related to the rise in CEO pay, he posted a link that showed a possible explanation. 

No one said it was completely justified. 

Worrying about CEO pay seems like a waste of time, it is not like if the CEO was paid less all of the sudden the company would pay everyone else more. More than likely that difference would instead be returned to the stock holders in some way instead. But since the stock holders essentially decide to the CEO pay they have voted for it by maintaining ownership of the stock. 

Edited February 17, 2019 by hornbri

[ChiTownDoc 21141]

On 2/13/2019 at 11:54 AM, hayden_horn said:

 

i understand that executives have tough jobs - i deal with many c-level executives in my career. they work very hard, but i'm not sure they work 300x as hard as their producers within the corporation. take a games company like atvi - i have no doubt that many of these people work just as many 60 -80 hour weeks as the executives. probably more, given the intense deadline drive of the business.

 

That's not the point.  The point is their decisions could make the company 300x more money or less money then decisions of the guy on the assembly line - barring that person fucking up massively.  I don't think CEO's should make THAT much more but they certainly deserve 8 figure salaries at fortune 500 companies.  Now, what I'm not a fan of is when they fuck up massively and walk away with the golden parachutes etc.  I think we can all agree that BS needs to stop.  

[RPM 26315]

On 2/16/2019 at 11:01 PM, slorch said:

are you suggesting it doesn't matter to stockholders/ boards how their firms perform in massive swings of the stock market?

LOLz.

economics doesn't mean shit, right?

What happened to labor wages during that time? We all agree it great when the company profits from the stock market. Why does one person profit instead of company wide? Here lies the problem.

[Catdaddyhorn 3444]

10 minutes ago, RPM said:

What happened to labor wages during that time? We all agree it great when the company profits from the stock market. Why does one person profit instead of company wide? Here lies the problem.

Exactly, and nobody seems willing to address why all the spoils reaped from market success seems to only cause American CEOs (and C-suite executives) pay to rise exponentially while CEOs in other countries aren't seeing the near same massive increase in compensation.

Cue the lap dogs to run over here and explain why there's nothing to see here. 

Edited February 18, 2019 by Catdaddyhorn

[Guest]

25 minutes ago, RPM said:

What happened to labor wages during that time? We all agree it great when the company profits from the stock market. Why does one person profit instead of company wide? Here lies the problem.

My wages have damned sure risen more than 5X since 1995.

Same employer since 1994, and fuck no am I the CEO...LOlz. But i know, my shit doesn't count.  Everyone else can't be expected to keep getting so lucky( rolleyes).

 

Shareholders demand productivity and some of that has come in the form of smaller raises for general workers through the years.  If you want more money, don't expect it in the same role you've been doing for years.  That's where I am in 100% agreement with the youngsters who say they move around.  There is zero loyalty and it's a 2 way street.  You can sit there and hate your employer...or do something about it( change jobs/ take on more responsibility.  

Sorry.  that's just the way it is.  Wall Street demands, so the CEO produces.

 

During that same time span, I believe we have had at least 4 CEOs.

 

Edited February 18, 2019 by slorch

[RPM 26315]

4 minutes ago, slorch said:

My wages have damned sure risen more than 5X since 1995.

Did they rise 271x?

[Guest]

6 minutes ago, RPM said:

Did they rise 271x?

No.

Neither did the value of my employer, nor did the compensation to our CEO.

It is a fortune 50 company who makes products that virtually everyone on this board has owned at some time during that span.  Most repeatedly.

Where does the 271X come from?

Edited February 18, 2019 by slorch

[NoRagrets 1125]

I guess I’m more of an insider and here’s my perspective:

the disparity in pay since 1995 might also have a lot to do with new software being developed that slowly eliminated a lot of middle management positions.

CEO’s can destroy a company pretty quick with bad decisions, so you want someone that knows how to increase shareholder value and mitigate risk. In addition, at a public company, they have to be politician-like in their public demeanor. These are rare skill sets and are expensive. Elon Musk is a genius but look at how his one gaffe on a podcast destroyed value and almost landed him in jail.

PE owned companies are different. Base ceo pay is pretty low comparatively, but their equity compensation is massive. PE firms know what they’re doing and almost always come out on top (as always there are good ones and bad ones). That’s why I like their model; they get results quickly and know how to drive the behavior they seek in their executives. Plus execs don’t have to worry about the public side of the business and can focus and adding value.

 

Edited February 18, 2019 by NoRagrets

[CooterBrown 18002]

It is a fortune 50 company who makes products that virtually everyone on this board has owned at some time during that span.  Most repeatedly.

I had no idea the Fleshlight has been that successful.

[Guest]

Just now, CooterBrown said:

 

I had no idea the Fleshlight has been that successful.

 

Hands-free devices are the wave of the future...

[Nice Guy Eddie 13508]

5 hours ago, slorch said:

My wages have damned sure risen more than 5X since 1995.

Same employer since 1994, and fuck no am I the CEO...LOlz. But i know, my shit doesn't count.  Everyone else can't be expected to keep getting so lucky( rolleyes).

 

Shareholders demand productivity and some of that has come in the form of smaller raises for general workers through the years.  If you want more money, don't expect it in the same role you've been doing for years.  That's where I am in 100% agreement with the youngsters who say they move around.  There is zero loyalty and it's a 2 way street.  You can sit there and hate your employer...or do something about it( change jobs/ take on more responsibility.  

Sorry.  that's just the way it is.  Wall Street demands, so the CEO produces.

 

During that same time span, I believe we have had at least 4 CEOs.

 

Unless you’ve been in the same role since 1994, I don’t understand the comparison that your salary has gone up more than 5x.  

[Nivek 16917]

Unless you’ve been in the same role since 1994, I don’t understand the comparison that your salary has gone up more than 5x.  

Crash test person.

[TwiceHorn 31438]

On 2/16/2019 at 6:19 AM, Nice Guy Eddie said:

If the decision makers want twicehorn to be the ceo, and twicehorn demands 25% more than they wanted to pay, why won’t they pay what he wants. It’s probably a relatively small amount when compared to the overall revenue of the company. And if twicehorn fails, they can point to saying that they hired the best, and it’s twicehorns fault if he failed.  If the board went with the 2nd or 3rd choice to save a few dollars, then his failure might be on them.

and for a public company, it’s not the boards money.  I would imagine that private company ceos, who are also not the owner, get paid much less.

Where do I sign up?

[Armybrat 40822]

Interesting. My teachers net pension has basically remained stagnant since 1997, except for a 13th “paycheck” around the turn of the century. My net SS has increased  <10% total in 16 years.

Ain’t complaining though that my son’s bank bonus by itself for the past year exceeded our total four pension income for the same period.

[52-80 19147]

On 2/17/2019 at 6:01 AM, slorch said:

are you suggesting it doesn't matter to stockholders/ boards how their firms perform in massive swings of the stock market?

LOLz.

economics doesn't mean shit, right?

how often do boards actively take action on executive performance ?

they're treated with kiddie gloves.  too much disturbance and it sends bad signal to wall street.  hence the soft landings and cushy exits.

executives get credited and awarded for bringing a company up.  but they also get awarded for managing it on the way down.  and for doing nothing at all. 

wonder if the workforce get that same kind of treatment.

 

yes i do read proxy statements and i do cast my votes where i own voting rights, so no i dont mind repeating those sentiments here

[Guest]

3 hours ago, Nice Guy Eddie said:

Unless you’ve been in the same role since 1994, I don’t understand the comparison that your salary has gone up more than 5x.  

One can change companies to improve their lot at work, as has been espoused by many millennials these days.  Ihave chosen to change roles within the same company.

No, I did not expect my income to change dramatically in the same role over the years.  I could either spend my time bitching about a miracle not falling in my lap... or do something about it.

[hornbri 1394]

9 hours ago, Catdaddyhorn said:

Cue the lap dogs to run over here and explain why there's nothing to see here. 

You still have not examples why there is a problem to solve. CEOs make more...so what? do you think the 50-200 people in the the US this applies to are really effecting the rest of us?

[Nice Guy Eddie 13508]

1 hour ago, slorch said:

One can change companies to improve their lot at work, as has been espoused by many millennials these days.  Ihave chosen to change roles within the same company.

No, I did not expect my income to change dramatically in the same role over the years.  I could either spend my time bitching about a miracle not falling in my lap... or do something about it.

My point was only that when it's spoken that salaries have barely budged over X number of years, no one is referring to an individual.  they're referring to averages across the board or even for a particular role.  For most private industries, an individual's salary has most likely increased over 20 years due to to increase in responsibilities or promotions.   

Yes, someone should take responsibility for their own lot in life but that has zero to do with this discussion.   Say you have 3 roles in a company.  

• Low level worker bee making 50K/yr in 2005.
• Mid mgr earning 100K/yr in 2005
• CEO eanring 500K in 2005.

Fast forward to 2019, and you see the following salaries

• Low level worker bee making 55K/yr
• Mid mgr earning 110K/yr 
• CEO earning 1.5M

Even if the worker bee worked hard and they moved into the mid mgr role, it doesn't change the fact that the 2 lower jobs saw a 10% bump over that 14 year period whereas the CEO had a 200% bump.  The new manager is now earning 120% more but that has zero bearing on this discussion.  We're talking about the role not the person.

Edited February 18, 2019 by Nice Guy Eddie

[hornbri 1394]

20 minutes ago, Nice Guy Eddie said:

My point was only that when it's spoken that salaries have barely budged over X number of years, no one is referring to an individual.  they're referring to averages across the board or even for a particular role.  For most private industries, an individual's salary has most likely increased over 20 years due to to increase in responsibilities or promotions.   

Yes, someone should take responsibility for their own lot in life but that has zero to do with this discussion.   Say you have 3 roles in a company.  

• Low level worker bee making 50K/yr in 2005.
• Mid mgr earning 100K/yr in 2005
• CEO eanring 500K in 2005.

Fast forward to 2019, and you see the following salaries

• Low level worker bee making 55K/yr
• Mid mgr earning 110K/yr 
• CEO earning 1.5M

Even if the worker bee worked hard and they moved into the mid mgr role, it doesn't change the fact that the 2 lower jobs saw a 10% bump over that 14 year period whereas the CEO had a 200% bump.  The new manager is now earning 120% more but that has zero bearing on this discussion.  We're talking about the role not the person.

so are you upset the CEO is making 200% more or that the the low lever worker is only making 10% more? Because those are two different discussions and trying to relate them does not make a whole lot of sense. 

[ChiTownDoc 21141]

7 hours ago, NoRagrets said:

 

PE owned companies are different. Base ceo pay is pretty low comparatively, but their equity compensation is massive. PE firms know what they’re doing and almost always come out on top (as always there are good ones and bad ones). That’s why I like their model; they get results quickly and know how to drive the behavior they seek in their executives. Plus execs don’t have to worry about the public side of the business and can focus and adding value.

 

Just closed our deal with PE last month.  Sold 70%.  My take home is 50x LESS post-close but we were paid a big multiple and like you said, the value on the next exit should be huge.  

I think PE has the best model out there.  I’ll only cash out big if we perform.  No golden parachutes etc.  

[Nice Guy Eddie 13508]

57 minutes ago, hornbri said:

so are you upset the CEO is making 200% more or that the the low lever worker is only making 10% more? Because those are two different discussions and trying to relate them does not make a whole lot of sense. 

first off I'm not upset at anything.  We're discussing that CEO salaries have outpaced average workers without any reasoning other than other CEOs earn more.  Someone said that their salary has increased 5x over 20 years so therefore average salaries are increasing.  I was pointing out that someone being promoted isn't an example of job income growth.

you don't think there should be any relation between compensation within a company?  

[52-80 19147]

On 2/18/2019 at 6:05 PM, hornbri said:

You still have not examples why there is a problem to solve. CEOs make more...so what? do you think the 50-200 people in the the US this applies to are really effecting the rest of us?

I think we'll all sleep fine if specifically G&E doubled its CEO this year despite that company backsliding for a decade.

 

The relevance for its discussion is it's emblematic of the growing wealth concentration and disparity.  That the 50-200 are multiplying their earnings while those of their 500000-2000000 subordinates have remained stagnant.  Scale that out to the entire labor force and that's not a great thing in the long term.

[Johnny Sack 8397]

Does not bother me.  Nor do athlete salaries.  Or entertainer salaries.  Or investment banker salaries.  Or successful entrepreneurs.  I am just not the jealous type.  I run with some people who make a lot more than me.  And some that make a lot less.  Nobody gives a shit.

[David Dennison 18845]

19 minutes ago, Johnny Sack said:

Does not bother me.  Nor do athlete salaries.  Or entertainer salaries.  Or investment banker salaries.  Or successful entrepreneurs.  I am just not the jealous type.  I run with some people who make a lot more than me.  And some that make a lot less.  Nobody gives a shit.

Hmmmmm.

[Dahobbs 17522]

3 hours ago, David Dennison said:

Hmmmmm.

Yeah, the people that didnt have trust funds probably give a shit and, you know, people who can actually think about someone other than themselves. 

[tbone_ 14106]

Nm

 

[Johnny Sack 8397]

17 hours ago, Dahobbs said:

Yeah, the people that didnt have trust funds probably give a shit and, you know, people who can actually think about someone other than themselves. 

If I had a trust fund, I guess you might have a point.  I just don't get jealous of people who make more than me like you do.  I also am not jealous of people with trust funds either, and I know more than a few.  I have this ability to be happy for other's good fortunes and never thought their unearned cash somehow is holding me down or costing me money.  Losers think like that.  This is America. The best place on this planet to make your own fortune.  

My privilege was having family member role models to show me how it is done.  And along with my parents' help, scholarships and working, being able graduate debt free.  Other than that, everything my wife and I own is from the money we earned.

The left constantly telling people they are victims and the deck is stacked against them due to capitalism, racism, sexism, whatever is immeasurably harmful to them.  And makes it less likely for them to go out there and maximize whatever opportunities they do have.  But the left is not actually interested in helping the poor.  They are interested in telling them what they want to hear so they can win elections.

 

 

[Dahobbs 17522]

25 minutes ago, Johnny Sack said:

If I had a trust fund, I guess you might have a point.  I just don't get jealous of people who make more than me like you do.  I also am not jealous of people with trust funds either, and I know more than a few.  I have this ability to be happy for other's good fortunes and never thought their unearned cash somehow is holding me down or costing me money.  Losers think like that.  This is America. The best place on this planet to make your own fortune.  

My privilege was having family member role models to show me how it is done.  And along with my parents' help, scholarships and working, being able graduate debt free.  Other than that, everything my wife and I own is from the money we earned.

The left constantly telling people they are victims and the deck is stacked against them due to capitalism, racism, sexism, whatever is immeasurably harmful to them.  And makes it less likely for them to go out there and maximize whatever opportunities they do have.  But the left is not actually interested in helping the poor.  They are interested in telling them what they want to hear so they can win elections.

 

 

Being concerned about the increasing wealth imbalance doesn't mean one is "jealous." Rather, it indicates ability to see beyond one's own narrow perspective and maybe, just maybe, think about people other than oneself. It also means recognizing that no one in modern society had accomplished it all on their own. Too much of what we do depends on services, social structures, and infrastructure built and provided by society as a whole. I'll be better off than 95% of the population. But I still care how the 95% do and I want to see our country's good fortune actually benefit the entire population and not just the top 5% of it.  You think saying you "don't give a shit" about all that says something about yourself. And I agree, it really does. 

Edited February 20, 2019 by Dahobbs

[SydneyCarton 48054]

On 2/18/2019 at 10:25 AM, slorch said:

One can change companies to improve their lot at work, as has been espoused by many millennials these days.  Ihave chosen to change roles within the same company.

No, I did not expect my income to change dramatically in the same role over the years.  I could either spend my time bitching about a miracle not falling in my lap... or do something about it.

Hey man, I'm not exactly a millennial, but what you described isn't always an option. I got a job at Hewlett Packard in 2005 and thought I was set. My step father worked for shell for 30 years. HP was a great big company with lots of options, and I was a hard worker I was confident if something didn't fit I'd have opportunity to find other jobs within a Fortune 100 company. I worked there for a year, and was unhappy. I then spent an additional 6-8 months attempting to interview within the company, using their work portal. I must have applied for 20 jobs for which I was absolutely qualified. I got zero interviews. Not one. Not even the courtesy interview for the guy down the hall. Because even though I was required to go through the HR portal, hiring managers weren't required to use it. Now, I realize that HP was a beyond broken system in this regard, but I'm just pointing out that I really, really wanted to work with one big company that had lots of opportunities for smart people to try new things. But I couldn't even get a courtesy interview internally. Sometimes things dont work out as seamlessly as you hope. 

[safe sex 11696]

Modern American "conservatives"  seem to be incapable of imagining and empathizing with anyone's personal situation unless it mirrors their own life. Very weird.