If someone's gonna downvote me I'd appreciate some color on your choice too, thanks. ;-)
If executive pay was rationally based, that might be true. But it appears to rather be the case that executive pay is really high just because executives get a lot of control over how much they are payed. More likely it would result in someone being promoted to executive and business continuing as usual.
The poaching companies are going to run out of places to put executives long before Mozilla runs out of competent employees who could run the company. In the meantime Mozilla gains a great reputation as a place to work if you want to get poached to a million dollar salary job, so it gains access to lots more competent engineers.
Or at least I think that's the sane argument for why Mozilla executives (and most companies executives) should be payed less. I'm not totally convinced that all the premises are true.
Maybe most people do, but there're also those who are driven by things other than money, and would stay.
Why does it appear to you that way? Research suggests that CEOs are overwhelmingly important and have significant impact on the valuation of a company on a scale significantly larger compared their compensation.[1]
"For example, open-minded and curious CEOs create an entrepreneurial culture, driven and intense CEOs create a culture of results and achievement, and altruistic CEOs create a culture of empathy and cooperation. Second, as a 20-year review from 1993 to 2012 showed, CEOs’ judgment affects key strategic and managerial processes, such as staffing, financing, and marketing decisions. Third, CEOs’ reputations — their public personas — affect company valuations and stock prices.
It has been estimated that 22% of the variability in firm performance can be attributed directly to the CEO. In fact, even when researchers use transcripts of interviews and meeting conversations to infer a CEO’s psychological profile, their ability, strategic thinking skills, and communication skills predict a substantial amount of variability in company performance."
I'd suggest you evaluate whether you base your opinion around CEO pay on data evaluating CEO performance or whether it's just an emotional response because 70 workers being laid off just elicits more sympathy than a CEO receiving higher compensation.
- CEOs having a large impact - we agree here
- It is hard to replace the current CEO with a new one who will be, on average, equal (or better) than the existing one.
It's the second statement which I question. In a few rare cases (e.g. Elon Musk) there is good evidence to support it, but in the case of Mozilla I don't see it.
The research you cite goes both ways. If we can predict who will be a good CEO through an interview CEOs are easier to replace.
Most people on HN are speculating that many (not all!) engineers would be perfectly qualified for the job for instance. Market rates for this sort of person is a few hundred thousand. not a few million.
PS. I believe the relevant organization here is a non profit with 20M in revenue, not the company with 500M, but I could be wrong I don't care that much about the specific example.
Also, please provide some evidence that the board chair of a non-profit with an annual budget of $20M has a market rate salary of $2M/yr. Note that Mozilla Foundation also has an executive director (more like $250k/yr) and the Mozilla Corporation had a separate CEO and executive team (whose salaries aren't reported in the Mozilla Foundation form 990).
But hey, someone with more knowledge of Mozilla than you or I should really be the ones defending this. Maybe some are reading this thread and don't mind chiming in?
If you're a company in desperate need of a turn around, you're not going to have a lot of luck in finding a great CEO unless you offer a competitive compensation package and a guaranteed payout.
That's why you see failing companies' CEOs walk away with big packages. They won't get a good CEO unless they offer comp comparable to other companies they could work for.
Unfortunately, Mozilla seems to be focused on everything except for making Firefox better than Chrome.
This feels like a misleading question to ask. There are plenty of disputes about "market rates" for both groups, so the premise isn't one I'd agree to. Market rates are decided by these decisions, not the other way around.
If Mozilla was able to get adequate leadership at the rates that didnt grow faster than rank-and-file wages, that would have been a more ethical decision overall. If more companies did the same, market rates would reflect that. Unless you think there was no such leadership available at that rate, in which case we simply disagree.
Either remove the donation website, or find execs who are driven not by money and market rates, but by changing and improving society.
I think the latter types of execs, would work better, for making FF popular and increasing revenue. The idea that only execs that need lots of money (market rate) or they'd jump to another company, can do a good job, seems weird to me.
I've understood that in theory the Donate-to-Mozilla thing doesn't donate to the execs — but in practice, I'd say yes it does (to some extent at least).
> which would likely lead to more than 70 employees losing their jobs?
I think (guess) the opposite. That they could all have kept their job and Mozilla could have hired more.
I would be more concerned if people who picked fruit were being poached with higher pay. We have no one willing to do those jobs.
I have no problem with that. Let them leave.
Suppose we set a maximum compensation cap of $10M/year in the US. So executives can no longer earn more than $10M/year in total compensation (salary, bonus, golden parachute, etc.).
So a bunch of overpaid execs leave the US. Where exactly are they going to go where they'll 1) be paid more than $10M/year, and 2) actually be able to do these super-high-paying executive jobs effectively (i.e., they need to know the local language, etc.)?