If you think this is always justified then GTAT are worth their bonuses. However their very claim to bonuses after destroying a company and shareholder value is an example of how pay, unlike in sport, amongst the executive classes in not related to talent. Often the opposite.
GTAT is a very different situation. They are not profitable and I see no natural competition that created the salaries to attract execs from other successful companies. In fact, they are wanting bonuses despite being unsuccessful. If they were successful I'd have no issue with their management getting bonuses. This goes for all companies. If Apple starts losing money every quarter I don't expect Cook to start getting huge bonuses.
GTAT is a very different situation. They are not profitable and I see no natural competition that created the salaries to attract execs from other successful companies. In fact, they are wanting bonuses despite being unsuccessful. If they were successful I'd have no issue with their management getting bonuses. This goes for all companies. If Apple starts losing money every quarter I don't expect Cook to start getting huge bonuses.
You are either deliberately misleading me or my point is not getting across. Let me simplify the argument I was countering here.
Statement; executives are paid do much because of their talent, and to retain the best.
corollary: There are no well paid bad executives.
Facts: there are well paid and bonus receiving bad executives.
This fact wouldn't be true of sportsmen for example ( with the exception of once great sportsmen recently injured).
And GTAT is not alone. Banks driven into bankruptcy and bought out by taxpayers have been forced to pay bonuses to their value destroying managerial classes.
The link between executive pay and performance isn't related to their increasing expertise and brilliance but can be explained far simply - they make their own rules.
What, you don't think the Chicago Bull is a corporation? You don't think Nike is a corporation? It doesn't matter that he's not the CEO. And I'm willing to bet that both the Bulls and Nike got their monies worth. He was worth every dime of what you would consider " an obscene salary" and bonus package. Michael Jordan helped the Bulls win 6 championships in 8 years. Air Jordans are over $200 a pair sneakers and they still sell out.
It's true that Steve Jobs didn't care to make any more money but he did want Apple to show its appreciation for the job he was doing by granting him huge stock options and lDid Steve decline the $45 million Gulf Stream jet? Along with another $45 million for the tax on it? All that back dating of Steve Jobs stock options was the result of Steve wanting (almost demanding) Apple to show how much he was appreciated. For sure Jobs didn't care about the actual money, but don't for a second think that Jobs only cost Apple $1 a year. His estate got over $2 Billion worth of AAPL, shares that Apple paid to Steve Jobs. Shares that Steve Jobs earned. Shares that no AAPL share holders are complaining about. And Jobs did appreciate the jesture of receiving those RSU of AAPL. Even if he didn't care to sell any of it, except to pay the taxes on it when they became vested. To the tune of $295 million dollars to Uncle Sam.
Rich people don't earn interest on their investment. (At least the smart ones.) Unless they keeping it in a savings account in a bank. (Putting money in a bank account is not investing.) They earn dividend by investing in stocks. Dividend from stock investment is not taxed like interest. Dividend on long term stocks (qualified dividend) is treated like long term capital gains. Even the richest of the rich will only pay a 20% tax rate on it in 2014. (Due to go up if President Obama has his way) That's half the tax rate of a yearly salary of over $1million. It's the reason why most rich people have an effective tax rate in the mid teens. Most of their money they make is taxed as long term capital gains.
What makes you think Tim Cook (or many of these highly paid CEO) won't be like Bill Gates, or Rockafeller or Carnigie when he retires from the corporate life? You think Bill Gate could have started his charity foundation (with the $50 billion he earned from MS) if all he wanted was to be paid $1 a year as CEO (and co-founder) of MS, after he earned enough to retire in the 1% for the rest of his life. Warren Buffet is giving away his nearly $50 billion dollar to The Bill Gates Foundation. (I guess he's too lazy to start and run his own foundation.) You think Warrenn should have called it quits after earning his first billion dollars and started working for free for his shareholders? After all, he didn't need to make any more money. And yet, nearly $50 Billion the money he made will go to charity and won't be taxed. Most rich people are no Steve Jobs, if they want to change the World for the better, it'll take money. Lots of money.
You still didn't comprehend bro, you still think it is about you and your hunger, that because something is done that it is right, that corporations are not their own entities but vehicles for extracting value from.. but thanks for the cool story.
Thanks for going to the effort of explaining your deep detailed knowledge and joy of an old corrupt system. Unfortunately we can't continue the conversation because you can't think passed it.
value is placed on things based on what others are willing to pay for it. That's it! Cook and Ahrendts are being compensated by Apple at a rate that will (hopefully) make them stay at Apple because they have proved to have a value to companies that exceeds their salary.
So what is this magic ceiling that the world should go by?
That's true but people can also only bid with what they already own. No matter if you have $100m or $1000, if it's everything you own that you are exchanging for something then it's the same sacrifice for the individual. If everyone in the world only had at most $10m, nobody would be able to offer $1b for anything on their own but it wouldn't prevent anything being sold, it would just expand the potential group of owners.
If you took a random person off the street and put them in an executive position and the company earnings came out exactly the same, would that person's value suddenly go from nothing to millions? People need opportunities and that doesn't come naturally to anyone.
The consideration with income inequality is how do we measure the value of earning. Say that an individual runs a grocery store and gets paid minimum wage and does a 60 hour week and does this for a year. He works 3,120 hours and makes say $22k. Carl Icahn clicks his mouse, enters a trade for $2.5b of shares at $400 and a year later, he's at $5b.
One human being works 3,120 hours for $22,000 providing a service to people.
Another human being clicks a mouse for $2,500,000,000 hoarding wealth for himself.
It doesn't make a whole lot of sense for the majority of the world to exist in a state barely able to survive when so few people have multiple orders of magnitude more than they'd ever need.
If there was an arbitrary wealth cap of say $100m, the wealth above that could be distributed across everyone e.g $1b gets distributed as $1 for 1 billion people. It's almost impossible to manage this scale of operation though and then people would ask why should people at the bottom just be given things when they might not have done anything at all to earn it. This entitlement culture definitely exists and cases like the following are disgusting, the attitude these people have especially:
People have kids and some governments have made a pledge to always support children so they take advantage of it. This encourages teenagers to have kids and live off the taxpayer for life. Some people have over a dozen kids and do it on purpose for lifelong welfare.
If there was some kind of wealth redistribution program, the only way it would work would be to use jobs programs. That's pretty much what happens in governments where they come up with non-jobs:
"Councils have advertised for posts such as 'Healthy Walks Co-ordinator', 'Woodfuel Development Officer', 'Active Women Officer' and 'Gypsy Romany Traveller Community Cohesion Officer'."
The entitlement attitude applies to people at the top too though. People like Icahn would say they made the choice to click their mouse so they're entitled to $2.5b for that effort but it's nonsense when you rationalize effort and reward knowing how much everyone alive has in common. No one can justify a system where human beings starve to death on a daily basis when the world has so many natural resources and the problem is not to justify it, it has always been how to effectively fix it. No economic system we've tried so far has worked.
I don't buy that the salaries of workers in IT get to be constrained within levels regardless of how good they are but the executive classes are to be unrestrained.
The executive classes are not any better than they were years ago - worse in fact. So why the pay rises (rises at the expense of both workers and owners).
I don't think the executives assign themselves pay rises, the board of directors will decide this and the shareholders would have the right to disagree.
The reward decided will come down to how essential they are to the successful running of the company as a whole. In sports, any one player on a small team could mean the difference between success or failure. In a business with tens of thousands of employees, it is more likely to be the executives.
Members of the Aperture team or Shake team may well have been more skilled than some higher-ups at Apple but their input wasn't critical to Apple's financial success.
That doesn't justify the huge disparity between income but how many lower level employees would just retire on being given a huge income? Mike Markkula did this retiring from electrical engineering at 32 because of his stock reward. This can have a positive effect in that it frees up job positions but having loads of people retiring quickly could make it hard to maintain an efficient operation.
I think it's commendable that despite the huge rewards the people at the top are getting, they aren't just bailing out. Given all the flack that Tim has to put up with and how easy it would be to just retire, he still gets up in the early hours and puts in the shifts. He's proved many times over he was the right person for that job role. The same went for Steve Jobs. He didn't need to go back to Apple and while he made a lot of wealth, he didn't cash in and spend to excess. He left all his billions behind because it's not what mattered to him.
From my experience one of Angela Ahrendt's first moves of removing name tags of employees has completely downgraded the quality of service I get in-store. With no name on display the sellers have no responsibility for what they do because how can you complain about them? I think I could have done better for $70+ million... in fact, most of the people commenting on here could have done!
Personally I think removing names tags is a great idea. You do realize that employees mostly hate being addressed by customers by first name. When customers do it it's a sign of stupid.
That's true but people can also only bid with what they already own. No matter if you have $100m or $1000, if it's everything you own that you are exchanging for something then it's the same sacrifice for the individual. If everyone in the world only had at most $10m, nobody would be able to offer $1b for anything on their own but it wouldn't prevent anything being sold, it would just expand the potential group of owners.
If you took a random person off the street and put them in an executive position and the company earnings came out exactly the same, would that person's value suddenly go from nothing to millions? People need opportunities and that doesn't come naturally to anyone.
The consideration with income inequality is how do we measure the value of earning. Say that an individual runs a grocery store and gets paid minimum wage and does a 60 hour week and does this for a year. He works 3,120 hours and makes say $22k. Carl Icahn clicks his mouse, enters a trade for $2.5b of shares at $400 and a year later, he's at $5b.
One human being works 3,120 hours for $22,000 providing a service to people.
Another human being clicks a mouse for $2,500,000,000 hoarding wealth for himself.
It doesn't make a whole lot of sense for the majority of the world to exist in a state barely able to survive when so few people have multiple orders of magnitude more than they'd ever need.
If there was an arbitrary wealth cap of say $100m, the wealth above that could be distributed across everyone e.g $1b gets distributed as $1 for 1 billion people. It's almost impossible to manage this scale of operation though and then people would ask why should people at the bottom just be given things when they might not have done anything at all to earn it. This entitlement culture definitely exists and cases like the following are disgusting, the attitude these people have especially:
People have kids and some governments have made a pledge to always support children so they take advantage of it. This encourages teenagers to have kids and live off the taxpayer for life. Some people have over a dozen kids and do it on purpose for lifelong welfare.
If there was some kind of wealth redistribution program, the only way it would work would be to use jobs programs. That's pretty much what happens in governments where they come up with non-jobs:
"Councils have advertised for posts such as 'Healthy Walks Co-ordinator', 'Woodfuel Development Officer', 'Active Women Officer' and 'Gypsy Romany Traveller Community Cohesion Officer'."
The entitlement attitude applies to people at the top too though. People like Icahn would say they made the choice to click their mouse so they're entitled to $2.5b for that effort but it's nonsense when you rationalize effort and reward knowing how much everyone alive has in common. No one can justify a system where human beings starve to death on a daily basis when the world has so many natural resources and the problem is not to justify it, it has always been how to effectively fix it. No economic system we've tried so far has worked.
I don't think the executives assign themselves pay rises, the board of directors will decide this and the shareholders would have the right to disagree.
The reward decided will come down to how essential they are to the successful running of the company as a whole. In sports, any one player on a small team could mean the difference between success or failure. In a business with tens of thousands of employees, it is more likely to be the executives.
Members of the Aperture team or Shake team may well have been more skilled than some higher-ups at Apple but their input wasn't critical to Apple's financial success.
That doesn't justify the huge disparity between income but how many lower level employees would just retire on being given a huge income? Mike Markkula did this retiring from electrical engineering at 32 because of his stock reward. This can have a positive effect in that it frees up job positions but having loads of people retiring quickly could make it hard to maintain an efficient operation.
I think it's commendable that despite the huge rewards the people at the top are getting, they aren't just bailing out. Given all the flack that Tim has to put up with and how easy it would be to just retire, he still gets up in the early hours and puts in the shifts. He's proved many times over he was the right person for that job role. The same went for Steve Jobs. He didn't need to go back to Apple and while he made a lot of wealth, he didn't cash in and spend to excess. He left all his billions behind because it's not what mattered to him.
I agree and would like to add that rich people don't treat money the same way as poor. Poor people are poor simply because they see money as a scarce resource. That kind of thinking sets them up to be poor. Rich people undestand the difference between an expense and an investment . The reason poor people are poor is because they are generally trying to hold on to money rather than letting it flow. It's a law of this universe. The more one lets the money flow out the more it comes in . But you have to realize it's the outflow of investment money not just consumption money that counts.
Poor people are stupid for not spending their consumption money on investment. If only they knew that by not eating or paying rent they could buy stock options, and then their street-side skeletons would be rolling in dollars.
Personally I think removing names tags is a great idea. You do realize that employees mostly hate being addressed by customers by first name. When customers do it it's a sign of stupid.
I was an original Apple Store employee (2001) and I didn't mind having a tag at all. Now, as just a customer I like knowing who is helping me. Our local stores (there are three within my area) are always packed and loud. When I come in and the concierge guy says Paul will help you back by the Genius Bar, it's nice to be able to identify Paul.
^
Poor people are stupid for not spending their consumption money on investment. If only they knew that by not eating or paying rent they could buy stock options, and then their street-side skeletons would be rolling in dollars.
I'm glad you agree, the more options trading the better and then the whole pyramid scheme would collapse
Comments
GTAT is a very different situation. They are not profitable and I see no natural competition that created the salaries to attract execs from other successful companies. In fact, they are wanting bonuses despite being unsuccessful. If they were successful I'd have no issue with their management getting bonuses. This goes for all companies. If Apple starts losing money every quarter I don't expect Cook to start getting huge bonuses.
You are either deliberately misleading me or my point is not getting across. Let me simplify the argument I was countering here.
Statement; executives are paid do much because of their talent, and to retain the best.
corollary: There are no well paid bad executives.
Facts: there are well paid and bonus receiving bad executives.
This fact wouldn't be true of sportsmen for example ( with the exception of once great sportsmen recently injured).
And GTAT is not alone. Banks driven into bankruptcy and bought out by taxpayers have been forced to pay bonuses to their value destroying managerial classes.
http://www.theguardian.com/business/2010/feb/24/rbs-bonuses-ukfi-approval
The link between executive pay and performance isn't related to their increasing expertise and brilliance but can be explained far simply - they make their own rules.
You still didn't comprehend bro, you still think it is about you and your hunger, that because something is done that it is right, that corporations are not their own entities but vehicles for extracting value from.. but thanks for the cool story.
Thanks for going to the effort of explaining your deep detailed knowledge and joy of an old corrupt system. Unfortunately we can't continue the conversation because you can't think passed it.
That's true but people can also only bid with what they already own. No matter if you have $100m or $1000, if it's everything you own that you are exchanging for something then it's the same sacrifice for the individual. If everyone in the world only had at most $10m, nobody would be able to offer $1b for anything on their own but it wouldn't prevent anything being sold, it would just expand the potential group of owners.
If you took a random person off the street and put them in an executive position and the company earnings came out exactly the same, would that person's value suddenly go from nothing to millions? People need opportunities and that doesn't come naturally to anyone.
The consideration with income inequality is how do we measure the value of earning. Say that an individual runs a grocery store and gets paid minimum wage and does a 60 hour week and does this for a year. He works 3,120 hours and makes say $22k. Carl Icahn clicks his mouse, enters a trade for $2.5b of shares at $400 and a year later, he's at $5b.
One human being works 3,120 hours for $22,000 providing a service to people.
Another human being clicks a mouse for $2,500,000,000 hoarding wealth for himself.
It doesn't make a whole lot of sense for the majority of the world to exist in a state barely able to survive when so few people have multiple orders of magnitude more than they'd ever need.
If there was an arbitrary wealth cap of say $100m, the wealth above that could be distributed across everyone e.g $1b gets distributed as $1 for 1 billion people. It's almost impossible to manage this scale of operation though and then people would ask why should people at the bottom just be given things when they might not have done anything at all to earn it. This entitlement culture definitely exists and cases like the following are disgusting, the attitude these people have especially:
http://www.express.co.uk/news/uk/387308/Working-is-not-worth-it-Benefits-mum-rakes-in-70-000-in-welfare
People have kids and some governments have made a pledge to always support children so they take advantage of it. This encourages teenagers to have kids and live off the taxpayer for life. Some people have over a dozen kids and do it on purpose for lifelong welfare.
If there was some kind of wealth redistribution program, the only way it would work would be to use jobs programs. That's pretty much what happens in governments where they come up with non-jobs:
http://www.dailymail.co.uk/news/article-1375468/Public-sector-cuts-Ccouncils-recruiting-non-jobs-despite-frontline-service-cuts.html
"Councils have advertised for posts such as 'Healthy Walks Co-ordinator', 'Woodfuel Development Officer', 'Active Women Officer' and 'Gypsy Romany Traveller Community Cohesion Officer'."
The entitlement attitude applies to people at the top too though. People like Icahn would say they made the choice to click their mouse so they're entitled to $2.5b for that effort but it's nonsense when you rationalize effort and reward knowing how much everyone alive has in common. No one can justify a system where human beings starve to death on a daily basis when the world has so many natural resources and the problem is not to justify it, it has always been how to effectively fix it. No economic system we've tried so far has worked.
I don't think the executives assign themselves pay rises, the board of directors will decide this and the shareholders would have the right to disagree.
The reward decided will come down to how essential they are to the successful running of the company as a whole. In sports, any one player on a small team could mean the difference between success or failure. In a business with tens of thousands of employees, it is more likely to be the executives.
Members of the Aperture team or Shake team may well have been more skilled than some higher-ups at Apple but their input wasn't critical to Apple's financial success.
That doesn't justify the huge disparity between income but how many lower level employees would just retire on being given a huge income? Mike Markkula did this retiring from electrical engineering at 32 because of his stock reward. This can have a positive effect in that it frees up job positions but having loads of people retiring quickly could make it hard to maintain an efficient operation.
I think it's commendable that despite the huge rewards the people at the top are getting, they aren't just bailing out. Given all the flack that Tim has to put up with and how easy it would be to just retire, he still gets up in the early hours and puts in the shifts. He's proved many times over he was the right person for that job role. The same went for Steve Jobs. He didn't need to go back to Apple and while he made a lot of wealth, he didn't cash in and spend to excess. He left all his billions behind because it's not what mattered to him.
Personally I think removing names tags is a great idea. You do realize that employees mostly hate being addressed by customers by first name. When customers do it it's a sign of stupid.
I agree and would like to add that rich people don't treat money the same way as poor. Poor people are poor simply because they see money as a scarce resource. That kind of thinking sets them up to be poor. Rich people undestand the difference between an expense and an investment . The reason poor people are poor is because they are generally trying to hold on to money rather than letting it flow. It's a law of this universe. The more one lets the money flow out the more it comes in . But you have to realize it's the outflow of investment money not just consumption money that counts.
^
Poor people are stupid for not spending their consumption money on investment. If only they knew that by not eating or paying rent they could buy stock options, and then their street-side skeletons would be rolling in dollars.
I was an original Apple Store employee (2001) and I didn't mind having a tag at all. Now, as just a customer I like knowing who is helping me. Our local stores (there are three within my area) are always packed and loud. When I come in and the concierge guy says Paul will help you back by the Genius Bar, it's nice to be able to identify Paul.
I'm glad you agree, the more options trading the better and then the whole pyramid scheme would collapse