Is this actually whats happening? We read about golden parachutes a lot because its news when it happens, but from all the countless companies that have a CEO I cant imagine someone who really messed up time and time again getting work again (firing, selling shit often can be exactly what shareholders wanted to happen...so job done in that case).I don't really think execs should take a pay cut rather than laying off employees. I think they should just be paid less in general.
Especially when you see a pattern of terrible CEOs coming in, laying everyone off and selling everything to meet an arbitrary target for the next year and get their bonus, then fuck off on their golden parachute to the next company that will hire them even though they've ran the last seven companies into the ground.
I don't think many posters in this thread understand how Executives are compensated.
Very few companies give "5 mil bonuses". Those mainly things like huge corporation CEO's. And even those usually aren't compensated in cash, but in stock options, which wouldn't help a single employee. Also, these employees that are being laid off because their project was canceled and there are no more projects for them, what are they going to do if you keep them?Always wondered this. They can actually afford to take a paycut or just don't get a 5 mil bonus that year to keep the company going and live pretty well. Why layoff people who need the money much more? Greed, Comfort of life, evil, apathy of life?
Iwata is one of the rare exceptions because he was a generally good person.Nintendo boss Satoru Iwata will cut pay in half after poor fiscal results
https://www.polygon.com/2014/1/29/5...-iwata-will-cut-pay-in-half-after-poor-fiscal
What do you mean?I don't think many posters in this thread understand how Executives are compensated.
This.I don't think many posters in this thread understand how Executives are compensated.
Short answer: Because they don't have to.
Longer answer: Because market forces make that a really strange thing to do.
Even longer answer: Company execs jobs are to make the company efficient, which includes, unfortunately, locating where jobs may not be necessary and cutting them so that there can be more profit. That's literally their job. If they take a pay cut the inefficiency still exists and either someone else at the company or shareholders will see it and force that to happen anyway. If they consider a pay cut then they may as well look for a different job where they could make the same or similar amount instead of staying. And then the company is forced to get someone else and that new person's job is literally to locate those places where they can cut.
Companies aren't charities. Jobs exist because they're needed. If one exec doesn't cut them then another might. Or somewhere down the road they might. Or they'll get undercut by another business that does. That's probably the biggest thing. If your company doesn't get efficient someone else will and if they can undercut you by even a few percentage points you're fucked. Then everyone loses their job.
Then on top of that there's just really nothing pushing in the other direction. Humans are the same as anything else in the company. They're the same as cutting any other cost. If there were more unions this would be different, but there aren't really anymore.
Then there's the calculus that the math may not really mean anything. An exec makes a fuckton, but divided out by however many people's jobs may be inefficient and you might not get everyone anyway. You may save a quarter of them. Maybe less. Who knows.
Personally I don't think Execs are evil. I don't think companies are evil. They're just following the rules of the game we put forward. You want to change the game? Change the rules. Support unions. Support labor laws. And I say this as a business manager who literally right now is taking a massive cut in hours along with my owner so we can keep the lights on and not lay people off. Our company's a bit different though. And tiny.
Everyone pointing to "greed" or them being terrible people are only understanding (at most) half of the story here.
There is no pressure on them to take a pay cut. With the weakening of Unions and a general shift in attitudes in America in general, there is no countervailing power to prod an executive to take a pay cut. There's simply no reason to do so, other than altruism.
I have a good job and make pretty good money. Not executive money but... I'm doing alright. Should *I* be obligated to take a pay cut, too? Where is the cutoff? C-level executives only? Or just the CEO? Why not the CFO?
Who controls those pay cuts? Who controls how those cuts are redistributed to the workers? Who controls when a company really DOES have too many employees and needs to shed some to be healthy?
This post makes it sound like I'm on the CEO's side. I'm not. They're extremely overpaid. Income inequality is the problem of our age. But to not acknowledge that it is massively fucking complicated does everyone a big disservice.
Honestly should be illegal. One of the most blatant and harmful transfers of wealth that is even possible.I wondered this while reading up on Activision's current situation- they have multiple execs getting multi million dollar bonuses while laying off 100s. it's baffling to me
What do you mean?
You're being kinda vague here.
I mean, boards usually push executives to get paid and usually paid more, and a lot of them build their compensation package in such way that it will go up without them doing anything so they can claim their hands are clean.
But a CEO can take a paycut, they can even not get paid at all if they wanted to.
This.
Most executives have a relatively tiny salary. They're big payouts come in the form of stocks, options, other assets, ect.
Why does the fact that get more compensation in stock than cash matter for this question?^
Take a look at the Highest Earning CEOs, you'll see that their base salaries are "tiny," even their performance based cash bonuses aren't that much. The bulk of their compensation comes from stock rewards/options.
https://www.equilar.com/reports/18-2-200-highest-paid-CEO-rankings-2015.html
Stock isn't liquid where as payroll is.Why does the fact that get more compensation in stock than cash matter for this question?
I'm not sure I follow.
ask yourself and be honest if you would cut your own salary in half to save your Colleagues .
Why does the fact that get more compensation in stock than cash matter for this question?
I'm not sure I follow.
If it's the difference between 2 yachts instead of 4, yeah probably.
Generally I consider human livelihood more important than the amount of yachts I own but I know this is actually atypical for an American.
Top execs routinely make north 10mil in cash compensation, that's a lot of money that can do a whole lot regardless of how much they get paid on top of it in stock.
Most execs are moving to stock awards from stock options, though again, I'm not really sure why you're insisting on this point because^
Stock options are not salary. You can't just cut your stock options to save budget. It doesn't work like that.
https://www.cnn.com/2018/11/16/business/sears-executive-bonuses/index.htmlThe issues is what if it's the difference between the company lasting another 10-20 years with jobs for a decent amount of people or not cutting and dying off within 5?
This is actually a good point and one of the problems with our economy where our retirements are tied to the stock market so it's in the civilians' best interests to see other civilians laid off in order to protect their 401(k). I have no answer to this except that it needs to stop because it pits common people against other common people.That plus the stock takes a hit and hurts people's retirement and investments?
https://www.forbes.com/sites/steves...magic-charm-for-a-toys-r-us-ipo/#5994a8f5748bAnd what if you could easily grab a different job for the same pay you've got now or even slightly less with almost no hassle instead of dealing with it?
Most execs are moving to stock awards from stock options, though again, I'm not really sure why you're insisting on this point because a
a. Execs still get paid a ton of cash
b. You can sell stock for money, that's like the whole point of stocks.
Those would be "pensions", which have nearly disappeared in America.Renumeration for jobs should be codified into law or something. We have a runaway greed culture and obviously the ones deciding the pay are the ones getting paid. I think anyone with free reign to decide their pay bracket would inevitably edge it ever upwards while they could, hence my idea of making renumeration for a job based on set limits.
Why any of that matter?But the stock value fluctuates. If you liquidate stock to gain money to pay employees, that could trigger a lowering value of the stock. Keeping excessive amount of employees when it's known that the company is bleeding money can also trigger a lowering value of the stock. These things don't help or do much good by trying to keep people on and compensate with stock in any way. Plus stock compensation tends to be limited and would only counter one year of salary for employees.
No, let's not ignore the 10 million dollars compensation package because that's the fucking point.So let's ignore the stock and use your 10 million dollar compensation figure. How people does that save? If you're at Google, it saves maybe 50 people? To get higher compensation tends to be that you're working for a bigger company which in many cases tend to have higher salary compensation for their employees. Not always like in the cases of Walmart, but that 10 million doesn't go very far when you factor in what the real cost per employee is and it doesn't even solve the problem that the company might be facing. It's a bandaid to a big wound that doesn't fix the problems the company might be facing and it doesn't go as far as people think it would. It's going to be highly dependent on the situation.
ask yourself and be honest if you would cut your own salary in half to save your Colleagues .
Always wondered this. They can actually afford to take a paycut or just don't get a 5 mil bonus that year to keep the company going and live pretty well. Why layoff people who need the money much more? Greed, Comfort of life, evil, apathy of life?
Why any of that matter?
Also, you know that once you awarded stock to an exec they can sell them, right?
No, let's not ignore the 10 million dollars compensation package because that's the fucking point.
Also, if that person take a 5 mil pay cut (which would still leave them with enough money to do anything anyone could ever dream about) you would save enough money to keep 125 people who make the median income on your payroll. Or you know, just give a nice compensation package to the people that you really really really think you cannot keep.
I understand why an exec would think that's a great use of the company money, I'm just not sure why you do.
Patrick said: "I am a mother who has four biological children and one stepson, and my income is all we have. When you take away our only income, you leave us with nothing – and we don't deserve nothing. Mentally and physically it drags on you. It's like saying you're not good enough. And we're all good enough."
Sheila Brewer worked at the same Kmart in Rockford for 17 years as a full-time employee. Four weeks into receiving severance pay, a bankruptcy court stopped the rest of the payments. In the meantime, Sears executives have petitioned to receive up to $25m in bonuses.
Brewer said: "It was a big toll emotionally and financially. It's a big slap in the face, them telling me I can't get the rest of my severance because of bankruptcy.
"Yet they're petitioning in court to get bonuses for the executives when that money could go into a plan or some kind of package deal for full and part-time employees to receive some sort of package. [It would help] to pay bills to help us get back on our feet."
Holy shit, this. Just another example of EtcetEra being nuanced and well-read. /sI don't think many posters in this thread understand how Executives are compensated.
So first of all, of course you can sell stock for cash, that's like the whole purpose of stocks.When much of that compensation is in stock, you can't just dump the stock for cash.
Flooding the market with large numbers of shares will devalue all the shares.
I didn't ignore the $10 million compensation, I said let's forget about the stock and look at the $10 million in compensation. Did you not read what I said? Someone getting $10 million compensation is likely working at a larger company where if they're laying off people, 125 isn't going to be enough. Plus you're low balling it. $5 million for 125 people means you're calculating a salary of $40k a person. That doesn't factor in there's more overhead costs per employee than their flat salary. So you're going to be saving even less people than you think and that's the point I'm getting at. The amount it saves isn't anywhere what it needs to be anyway so you cannot simply avoid layoffs by taking it out of the CEO compensation. There's more to it than that.
So first of all, of course you can sell stock for cash, that's like the whole purpose of stocks.
And when you're giving stocks to an exec they are "in the market" just as much as they would have been had you sold them for money.
So first of all, of course you can sell stock for cash, that's like the whole purpose of stocks.
And when you're giving stocks to an exec they are "in the market" just as much as they would have been had you sold them for money.
Executive stock always comes with sale restrictions.
They cannot just buy/sell on the market like you or I can.
Any volume of stock that is market moving will impact a large number of pension funds, individual investors, etc.
I don't think many posters in this thread understand how Executives are compensated.
Stock value mostly matter for shareholders, fluctuation in the stock price has very little influence on the ability of most companies to do their business.The stock valuation of a company is important to the company. Lowering the value of the stock goes against the interest of the company. The company isn't at an obligation to lose money to employ people. The exec also can't just sell all their stock the same way any of us can either.
It's funny how companies are always trying to squeeze every cent from their workers and their costumers, but somehow when it comes to exec pay it's like 10mil, who cares, what are numbers really?I didn't ignore the $10 million compensation, I said let's forget about the stock and look at the $10 million in compensation. Did you not read what I said? Someone getting $10 million compensation is likely working at a larger company where if they're laying off people, 125 isn't going to be enough. Plus you're low balling it. $5 million for 125 people means you're calculating a salary of $40k a person. That doesn't factor in there's more overhead costs per employee than their flat salary. So you're going to be saving even less people than you think and that's the point I'm getting at. The amount it saves isn't anywhere what it needs to be anyway so you cannot simply avoid layoffs by taking it out of the CEO compensation. There's more to it than that.