Author Topic: The Future/Survival of the Richest  (Read 1394 times)

jrhampt

  • Handlebar Stache
  • *****
  • Posts: 2037
  • Age: 46
  • Location: Connecticut
The Future/Survival of the Richest
« on: February 19, 2024, 06:19:04 PM »
Iíve been on fishbowl lately, reading all the layoff and RTO threads in my industry, and I saw a post with a stat about the CEO of my company and his salary relative to the average employee of the company. This was paired with speculation about what our raise % will be this year.  I boggled at the CEO salaries and the 200-300x ratio to the average employee salary.  Average!  Not even the median. 

https://www.insurancebusinessmag.com/us/guides/which-health-insurance-ceos-get-the-highest-pay-467513.aspx

This reminded me somewhat of a dystopian novel I had read this winter called the Future, by Naomi Alderman, although these arenít even tech salaries in the link above, which are presumably even more obscene.

Which in turn reminded me of some semi recent news articles that have been going around about billionaires and bunkers:

https://www.theguardian.com/news/2022/sep/04/super-rich-prepper-bunkers-apocalypse-survival-richest-rushkoff

Fru-Gal

  • Handlebar Stache
  • *****
  • Posts: 1326
Re: The Future/Survival of the Richest
« Reply #1 on: March 06, 2024, 05:17:51 PM »
Time for maximum wage.

Also, I read that book. It was OK, basically expanding an article into a book concept, but was somewhat enlightening as to what the ultra rich are planning for.

jrhampt

  • Handlebar Stache
  • *****
  • Posts: 2037
  • Age: 46
  • Location: Connecticut
Re: The Future/Survival of the Richest
« Reply #2 on: March 06, 2024, 07:10:47 PM »
I was just amazed that these billionaires are obsessing over how to keep their armed guards from turning on them when civilization collapses (shock collars for example).  I mean, yeah, it does seem like the kind of thing you might worry about when you have taken a seriously wrong turn somewhere.  Wrong turn!!  Maybe work on preventing civilizationís collapse instead of causing it??

Freedomin5

  • Walrus Stache
  • *******
  • Posts: 6643
    • FIRE Countdown
Re: The Future/Survival of the Richest
« Reply #3 on: March 06, 2024, 07:16:41 PM »
Knowing the incredible amount of stress my CEO is under and the amount of criticism he receives, I do not begrudge him his salary. No matter what decision you make, even if you're God and your decision is perfect, some loudmouth is going to be unhappy about it and try to make your life miserable while trying to turn everyone who is willing to listen to them against you. Or some low-level employee is going to think they know how to do your job better than you do, or not realize the risks that you are managing, and complain.

No, I wouldn't want to become a CEO of a large company, even if someone paid me $20M a year.

Maximum wage does not work, if maximum wage refers to putting a cap on compensation. They do that to doctors in Canada now, and I suspect that's contributing to the brain drain to the US where doctors can make more money.

I charge a premium for my services in China, because I'm literally better trained and more effective than most others in my role - the results speak for themselves. If someone put a cap on my wage, I'd simply move somewhere where I can charge what I'm worth. Putting a cap on compensation leads to all the really good people leaving.
« Last Edit: March 06, 2024, 07:25:22 PM by Freedomin5 »

GuitarStv

  • Senior Mustachian
  • ********
  • Posts: 23489
  • Age: 43
  • Location: Toronto, Ontario, Canada
Re: The Future/Survival of the Richest
« Reply #4 on: March 06, 2024, 07:48:13 PM »
Knowing the incredible amount of stress my CEO is under and the amount of criticism he receives, I do not begrudge him his salary. No matter what decision you make, even if you're God and your decision is perfect, some loudmouth is going to be unhappy about it and try to make your life miserable while trying to turn everyone who is willing to listen to them against you. Or some low-level employee is going to think they know how to do your job better than you do, or not realize the risks that you are managing, and complain.

No, I wouldn't want to become a CEO of a large company, even if someone paid me $20M a year.

Maximum wage does not work, if maximum wage refers to putting a cap on compensation. They do that to doctors in Canada now, and I suspect that's contributing to the brain drain to the US where doctors can make more money.

I charge a premium for my services in China, because I'm literally better trained and more effective than most others in my role - the results speak for themselves. If someone put a cap on my wage, I'd simply move somewhere where I can charge what I'm worth. Putting a cap on compensation leads to all the really good people leaving.

My first job was for a small aerospace company that went belly up in the five years I was there (it went from having 230 engineers to having 3 engineers and eventually sold off all IP and stopped being a viable business) - entirely due to ridiculously bad management decisions.  One of the upper management decisions made was to bribe a company that we were about to sign a contract with - which ended up costing us the contract and sending us into the tailspin.

Anyhoo, I knew a guy who worked in payroll at the company.  That CEO made merely 10x what the average engineer did, and got a payout bonus of 20 million (which was the largest of 150 million in payouts to upper management) after tanking the company and laying off everyone.  And this guy was spectacularly incompetent.  It boggles the mind to ponder what a less stupid CEO is getting away with.

Fru-Gal

  • Handlebar Stache
  • *****
  • Posts: 1326
Re: The Future/Survival of the Richest
« Reply #5 on: March 06, 2024, 10:49:01 PM »
I say maximum wage slightly in jest. It would never pass in the USA but it makes for a nice threat.

reeshau

  • Magnum Stache
  • ******
  • Posts: 2740
  • Location: Houston, TX
  • Former locations: Detroit, Indianapolis, Dublin
Re: The Future/Survival of the Richest
« Reply #6 on: March 07, 2024, 05:29:36 AM »
Part of the issue with CEO pay is that, just like everyone else, the time they work for a company is falling.  (Median tenure is under 5 years)  And like an athlete or movie star, once their assignment is done, they don't know if they will have another.  Unlike those 2 groups, a CEO assignment is usually at the end of an already-successful career.  But if you are ousted by your board, your future options are greatly dimmed.

I do think CEO contributions are over-appreciated.  But a bad one can kill your company.  And a great one is Steve Jobs or Jeff Bezos.  I may not want to eat lunch with them, but I sure as heck want to invest with them, as early as possible.

It's a hit-driven business, like the entertainment sector.

Metalcat

  • Senior Mustachian
  • ********
  • Posts: 17923
Re: The Future/Survival of the Richest
« Reply #7 on: March 07, 2024, 06:36:01 AM »
Knowing the incredible amount of stress my CEO is under and the amount of criticism he receives, I do not begrudge him his salary. No matter what decision you make, even if you're God and your decision is perfect, some loudmouth is going to be unhappy about it and try to make your life miserable while trying to turn everyone who is willing to listen to them against you. Or some low-level employee is going to think they know how to do your job better than you do, or not realize the risks that you are managing, and complain.

No, I wouldn't want to become a CEO of a large company, even if someone paid me $20M a year.

Maximum wage does not work, if maximum wage refers to putting a cap on compensation. They do that to doctors in Canada now, and I suspect that's contributing to the brain drain to the US where doctors can make more money.

I charge a premium for my services in China, because I'm literally better trained and more effective than most others in my role - the results speak for themselves. If someone put a cap on my wage, I'd simply move somewhere where I can charge what I'm worth. Putting a cap on compensation leads to all the really good people leaving.

Conversely, my aunt was until very recently the president of a multinational corporation with an annual 300M+ revenue. She probably had the least stressful job in the company because she could outsource most of the stress to the management below her.

Her job was to be the final say on the solutions that other people had to come up with. She finished work every single weekday at 4pm, and didn't even have a work cell phone. It was someone else's job to deal with emergencies and then report to her the next day.

She made obscene amounts of money to generally *not* stress about anything.

In most company structures I've seen, it's the junior executives and middle managers who experience the most stress.

But I also have never lived and worked in China, which is a different cultural and economic creature for sure.

ETA: there are also many extremely demanding careers with general ceilings on their earning potential and it has never caused anyone who not pursue these careers.

I have had many, many talks where I explain to doctors, dentists, and lawyers that relative to their effort, risk, and skill that they're horribly underpaid.

Even though virtually any doctor, dentist, or lawyer could be orders of magnitude richer had they dedicated that amount of effort into a different, more scalable profession, it doesn't deter anyone from working their asses off to achieve in those extraordinarily stressful and demanding roles.

So I'm not convinced that throttling top level earning potential would actually hold people back from working their asses off to accomplish great career success.

A hell of a lot of people would work themselves to the bone and take massive risks to make even low 7 figures.
« Last Edit: March 07, 2024, 06:41:20 AM by Metalcat »

Freedomin5

  • Walrus Stache
  • *******
  • Posts: 6643
    • FIRE Countdown
Re: The Future/Survival of the Richest
« Reply #8 on: March 07, 2024, 06:43:11 AM »
We have a saying here: The head of the snake gets chopped off.

Itís not the day to day operations that is stressful. Itís knowing that youíre the head that gets chopped off if anyone in your company does anything egregiously wrong, or if the company does not do well.

Metalcat

  • Senior Mustachian
  • ********
  • Posts: 17923
Re: The Future/Survival of the Richest
« Reply #9 on: March 07, 2024, 06:52:05 AM »
We have a saying here: The head of the snake gets chopped off.

Itís not the day to day operations that is stressful. Itís knowing that youíre the head that gets chopped off if anyone in your company does anything egregiously wrong, or if the company does not do well.

I'm guessing they don't have the same massive golden parachutes as US top.executives?

And in western megacorps, the top execs don't get shitcanned for mistakes, they fire whomever they hold responsible for those mistakes, it's a huge part of an executives job to figure out who is at fault and fire them.

The mega, stupid wealthy executives in the US are extremely hard to get rid of, even when they fuck up massively.

ChpBstrd

  • Walrus Stache
  • *******
  • Posts: 6914
  • Location: A poor and backward Southern state known as minimum wage country
Re: The Future/Survival of the Richest
« Reply #10 on: March 07, 2024, 08:58:40 AM »
Time for maximum wage.
Wouldn't this be the same thing as restoring the tax rates of the mid-1960s? For example in 1965 there was a 70% tax bracket for earnings over $200k (~$2M in today's money) and a LOT fewer loopholes for billionaires to pay no taxes.

That one simple trick kept the US from becoming on oligarchy, and coincided with the fastest sustained period of economic growth in our history.

Log

  • Pencil Stache
  • ****
  • Posts: 697
  • Location: San Francisco
Re: The Future/Survival of the Richest
« Reply #11 on: March 07, 2024, 09:28:54 AM »
Time for maximum wage.
Wouldn't this be the same thing as restoring the tax rates of the mid-1960s? For example in 1965 there was a 70% tax bracket for earnings over $200k (~$2M in today's money) and a LOT fewer loopholes for billionaires to pay no taxes.

That one simple trick kept the US from becoming on oligarchy, and coincided with the fastest sustained period of economic growth in our history.

You beat me to it. Much steeper progressive income taxes already solved this problem, and we got rid of them because we're idiots.

Freedomin5

  • Walrus Stache
  • *******
  • Posts: 6643
    • FIRE Countdown
Re: The Future/Survival of the Richest
« Reply #12 on: March 07, 2024, 02:41:10 PM »
We have a saying here: The head of the snake gets chopped off.

Itís not the day to day operations that is stressful. Itís knowing that youíre the head that gets chopped off if anyone in your company does anything egregiously wrong, or if the company does not do well.

I'm guessing they don't have the same massive golden parachutes as US top.executives?

And in western megacorps, the top execs don't get shitcanned for mistakes, they fire whomever they hold responsible for those mistakes, it's a huge part of an executives job to figure out who is at fault and fire them.

The mega, stupid wealthy executives in the US are extremely hard to get rid of, even when they fuck up massively.

Well, given that my previous company went through three CEOs in seven years, and my current company is on its third one in five years, my experience has been it's pretty easy to get rid of the C-suite. Thereís pretty much no stability at any level here.

And the mega companies are owned by the gvmt here. Itís easy for them to make an example of whomever is at the top.

Metalcat

  • Senior Mustachian
  • ********
  • Posts: 17923
Re: The Future/Survival of the Richest
« Reply #13 on: March 07, 2024, 02:48:01 PM »
We have a saying here: The head of the snake gets chopped off.

Itís not the day to day operations that is stressful. Itís knowing that youíre the head that gets chopped off if anyone in your company does anything egregiously wrong, or if the company does not do well.

I'm guessing they don't have the same massive golden parachutes as US top.executives?

And in western megacorps, the top execs don't get shitcanned for mistakes, they fire whomever they hold responsible for those mistakes, it's a huge part of an executives job to figure out who is at fault and fire them.

The mega, stupid wealthy executives in the US are extremely hard to get rid of, even when they fuck up massively.

Well, given that my previous company went through three CEOs in seven years, and my current company is on its third one in five years, my experience has been it's pretty easy to get rid of the C-suite. Thereís pretty much no stability at any level here.

And the mega companies are owned by the gvmt here. Itís easy for them to make an example of whomever is at the top.

Yeah, such a different set-up than North America, esp the US.

I'm guessing the CEOs also don't make the same batshit insane bonuses that US CEOs make even when their companies lose massive amounts of money.