If you want to argue for a particular CEO not executing on grand strategy beyond the layoffs that's completely valid.
If you just want to be mad at the persons responsible the CEOs are the intentional scapegoats, the root cause is above them.
This is ultimately why I support board-level employee representation and why I think it's a good idea for employees to collectively own a non-trival amount of corporate stock. Providing jobs to generate stability in society has become a critical role of business, and the public at large is coming to expect more from publicly traded corporations than just quarterly profits. Wall Street shouldn't be the only voice in corporate governance.
Without the threat of the Soviet Union or even a semblance of an organized labor movement, there is nothing meaningful to support.
Also by revenue, US automakers are bigger than German ones.
I recall reading an article that for some companies in germany, the board-level employee representative have successfully negotiated during the GFC, to not have layoffs, but instead collectively took a pay cut and survive through the difficulties. The company got to retain the talents and save on the costs of retraining etc.
Having a dissenting voice can lead to better ideas. However, if the intention is to prevent employees from being fired even when it is in the best interest of the shareholders, then this employee representation is only going to decrease the shareholder value, and ultimately the profitability of the company.
> collectively own a non-trival amount of corporate stock.
how do these stock get granted? Because if the employees themselves pay for the equity, then they're part owners. If they don't actually pay, then they'd be usurping control in a way that is not fair to those paying the equity.
I am pretty sure most non tech people around me would take the pay cut over the risk of becoming unemployed for an uncertain amount of time, having to find a new job, maybe moving to a different place etc….
> If they don't actually pay, then they'd be usurping control in a way that is not fair to those paying the equity.
From a capitalist point of view. Socialists would argue that shareholders are already usurping the labor of the employees by not paying their fair value.
but then you have to question the idea of what fair value is. The market rate is a pretty fair value to use. The argument that the employee's wages are always less than the full market value of the goods/services they produce, thus they must not be paid their fair share, is not correct - what happened to the capital that the employees uses to produce their output (the guaranteed wages are also considered capital in this case)?
Again, I think capital should get profit in exchange for risk taking and organization, but there is no moral argument that shareholders should continue to rake in record profits while working Americans continue to get squeezed tighter every year. At what point does it become rent?
How do you support these ideas?
After all, if you pay a guy to mow your lawn a few times, does he now have a say in what you do with your house?
Giving employees regular input into big decisions is a good idea in the long term. Giving them stock is a way to motivate them to be less inward-looking and think about the company as a whole, and a convenient mechanism to formalise and fine-tune the power balance. If you have a bunch of stock (initially 100%), you can think of the voting power it entails as a resource that you can spend on people who are going to vote well with good information and the right kind of interest in making the company sustainable. Giving it to employees is a good way to spend that resource. They know more than regular shareholders and are empowered to change the course of the company from within.
If you can’t bring yourself to give away any stock due to unstoppable greed and a belief that employees are dumb lawn mower operators who would never know what’s good for them, then basically… good luck. There is a reason so many law firms operate as a partnership to buy into, so many investment firms give out units of a trust, so many startups and megacorps alike give out equity (usually as options). Of those, it’s usually only law firms that are giving out voting power. All people are saying here is that we should not shy away from giving out voting power as well as the economic interest that this practice is usually restricted to.
I don’t think we should seek to require that employment be more stable, because down that route lies moribund companies and an ossified economy, and at some point, that can no longer sustain the standard of living that Westerners are accustomed to, because companies in places that don’t have that will eat their lunch. I think we should just seek to make the penalties of not being employed less severe, with much improved social safety nets. Let people continue to compete hard, let them continue to associate and dissociate freely, but don’t let the penalty for dissociation be financial ruin for employees. If we achieve that, we’ll likely make the economy more dynamic, as risk taking is no longer so personally risky - it would give everyone the ability to operate from a place of security and rationality rather than fear and anxiety (from “a position of fuck you”, if you’ve seen that clip from The Gambler) and do what they should do rather than just trying to tread water.
If your response to challenges as a company is to shut out your employees and tell them to obey, you are missing out on this machine’s power. The only reason you would want to miss out on that power is if you had no other choice, because you were unable to frame the challenge in a way the employees can respond positively to. Democracies have a way of correcting that (among other things), which is called getting voted out; companies don’t by default, so at best you’re usually running a shitty version of democracy and yeah, bad democracies sometimes perform pretty poorly.
I think my main argument is to not mandate structure with law, I’ve seen a number of people calling for that. I think that if we strengthened social safety nets, this sort of thing would become more common, as people became more free to leave workplaces they didn’t feel invested in, and more companies would try to foster it to attract employees.
A pretty huge issue in modern capitalist economies is that people are locked into underpaid jobs with no prospects and no investment in their future other than to hold on for dear life. That’s a massive waste of our potential and a terrible experience for those workers. (And because failing these people is part of the complex of interconnected root causes that lead to anti-democratic sentiment, it is an existential problem.) You want companies to compete to use people better than that, and sharing in the rewards and the decision-making makes for a much better plight for a worker at the lower end of the pay scale. Heck, there are companies today that pay everyone the same salary, determined by the company’s profit divided by N. Their people post on HN sometimes.
Apologies for adding a slightly empty comment but clicking the little "upvote" button didn't feel like it was enough.
I said that being paid for a job does not imply ownership.
> If you can’t bring yourself to give away any stock due to unstoppable greed and a belief that employees are dumb lawn mower operators who would never know what’s good for them
That rude comment doesn't deserve a reply, but I wrote one anyway.
The parent I replied to wanted to use the government to force the issue.
You and anybody else are free to set up and run a corporation the way you please. If it works better, others will copy it. You can even set up a collective, or a commune, or a workers' cooperative. It's not illegal in the US.
Whether I am open to your vision of how a company should operate is irrelevant. In a free market, you get to choose how your company will operate. And the best structure will win.
Company owners are not so stupid they will turn down a corporate structure that will be more profitable. Tech companies are famous for handing out stock options like popcorn. Back when I ran Zortech, which was privately held, we gave each employee a cut of the monthly sales.
When I worked at Boeing, I bought Boeing stock out of my own pocket. It paid off handsomely.
That’s really awesome man, I wish you’d started with that.
And ... they loved them! They were really proud of their suits (for many it was their very first one) and enjoyed visiting customers with them on. Our customers liked it, too, and would remark that no other tech company representative would wear one. They took it as a mark of respect for the customers, as tech representatives usually were slobs. It was a big win for us, and a fun way to differentiate us from our competitors.
The conventional wisdom is one's dress doesn't matter, but in my experience it makes a big difference.
If the state deems it good policy for corporations (say, above $x,000 capitalization or y employees) to have employee representation on their boards, the state is well within its rights to introduce this condition.
Silicon Valley pays the highest and employs the most number of programmers and has done so with employees on boards. Other places and countries with board-level employee representation seem to do worse.
What's the logical argument that board-level employee representation won't employee pay or total employment?
I have read the parent comment twice, what is the argument or data supporting employees on boards will be good overall?
What data point do you have? Do you have a causal data point? Would love to hear that!
> Correlation and causation, just because US has high salaries doesn't mean it's because of that etc etc
Read again. I didn't suggest that.
Day to day moves in the market happen for many reasons. I doubt that over any sort of reasonable term (let's say a few quarters) the companies doing massive layoffs are going to outperform the companies that are not.
How is it impressive and worth multi-million dollar salaries to lay off people when your revenue is down?
How is it amazing to do what the board wants all the time?
What about mistakes and past decisions? If you make a decision, it turns out to be wrong, you aren't exceptional to then fix it. If I am making a customers order at McDonalds, get it wrong, then redo it that's certainly nice but how is that more than what anyone else would do?
If a companies revenue is down the CEO's decisions should be analzyed to see if his actions contributed to it and perhaps lose his job if so.
Agree. However, will you also apply the same logic to the current administration of your government who created the economic conditions which set the CEOs up to fail?
You did not have to have a degree in economics to see the effects of shutting down an entire countries economy for over a year would eventually come back to bite us in the arse. The Tech crowd predominately leans left and a large majority supported these measures and even heralded them at the time.
This is now the fallout of those decisions and we are to live with the result of our convictions.
Saying you want someone else to take the fall is just asking to have your cake and eat it too, which I do not support at all.
2. The most severe shutdowns were in the early stages of the pandemic, under President Trump and a Republican Senate. Not sure why you are laying the blame entirely at the feet of those who “lean left”.
3. During those same shutdowns, the companies laying people off today went on hiring sprees. That wasn’t the decision of the employees being hired, it was the decision of management at the company. So even if it is true that this economy was inevitable due to the pandemic, and that anyone should have been able to see it, then the responsibility lies with those who chose not to act accordingly but instead overhire, which again, is management.
This was voluntary however since many would follow it there would be an economic impact
That would suck, but that didn't, even to a first approximation, happen. Not for a year, not for a month, and not for a day.
Schools, Restaurants, department stores, and just about anything that wasnt a pharmacy, grocery store, or gas station was forced closed. Borders with countries allies and foes alike were closed. In some 1st world countries like Germany this went on for MORE than a year.
Then you had a partial shutdown of the economy with vaccine requirements that shut out the economy for millions who did not have the vaccine yet or had no plans to get the vaccine.
You supported this. I will bring it up to you again, and again, and again because what you supported was wrong.
I will not stop telling the people that you and whoever supported these horrible measures are part of the reason we are in the situation. No matter how much you say No No No. You are partly responsible.
It might appear to be a lack of planning, but another way to look at it, is these companies are running at full throttle in a vehicle sense, and the CEO and others have taken their foot off the throttle to negotiate a bend.
>How is it amazing to do what the board wants all the time?
I've seen stats delivered to management and the board, and I've seen the board tell management to reverse their actions within minutes of those stats being delivered at shortly after 6am.
Keeping a currently work-to-rule, minimum-productivity workforce happy when it affects the business in other ways is important to the board.
> If a companies revenue is down the CEO's decisions should be analzyed to see if his actions contributed to it and perhaps lose his job if so.
Look at the UK Prime Minister situation, 3 PM's in a year. Its an interesting lesson for the whole world if you consider the British PM to be a CEO of a country.
Look for the parallels and whose Authority do you trust?
Do you find pieces of paper from a University to be an interesting Authority object? Do you find money to be an interesting Authority object?
Do you find the internet, regardless of website to be an intelligent training exercise? Do you find life and society is one giant over populated prison?
The companies of CEOs who were able to higher employees quickly and capitalize benefitted.
Now capital is much more expensive and companies cannot afford some percentage of those inefficient employees. CEOs that act quickly on this and cut staff typically end up protecting more company revenue.
CEO decisions also are absolutely analyzed by the board and CEOs are typically fired based on performance relative to the market as a whole.
No one could have predicted that you could hire people you don't need or are ""inefficient"" and a company could still be profitable?
Again, is this a complex notion? Is this like some revelation that could only be understood after a certain date? I mean I think not. It's such a simplistic concept
Also you keep claiming the people hired were inefficient and the people fired were inefficient. How do you know that? Like what is inefficient? It bothers me how you said it twice and implied everyone was inefficient (of those fired and hired)
And if you can predict interest rates, then no need to be a CEO, you can make billions just by placing a few trades per year.
You don't pay an executive millions because he has fourth-grade economic understanding.
1. Boards are mostly made up of (drum roll please)... other CEOs. There is a kind of class solidarity making sure that overall CEO pay only goes up and up and well beyond any kind of inflation; and
2. The real issue with many companies having poor financial performance has nothing to do with "bloat" or "over-hiring" and everything to do with poor leadership. Case in point: the tens of billions Meta has sunk into the Metaverse despite there being no product-market fit, no business model and no end to spending in sight.
But it's employees who are bearing the brutn of these poor decisions, which is extra ironic when you remember that those employees have no power over those decisions.
And notice...all management below the CEO are expected to inherit the stockholder priority.
That is to say, management (for which I have been) are the foot soldiers of the capital class. This is done by incentivizing management with larger and larger percentages of compensation based on stock, thus aligning management's incentives with investors rather than with non-management labor.