For all the talk about the Deep State, the truly unaccountable power holders are the C-suite class.
Most billionaires realized that they do not need to be in the news or do any work, they can let the CEOs of this world take a small part of the profits and all the blame for what companies do. That is why we know nothing about the super-rich but many CEOs are always on TV. Smaller shareholders do not have power to change things.
In some sense I respect him for at least being transparent. Most other billionaires are only visible through heavily refracted PR lenses.
This is in contrast to Musk, who is hated for being a POS person, despite running companies that are somewhat respected.
Gates had a pretty good one somewhere, as he quietly slipped into the night. Bezos, Zuckerberg? They're too involved and don't seem to deeply care (though I suspect Zuckerberg's is doing better, what with that race they had him run).
There are a lot of irrational people on the Internet very quick to lump anything into an incoherent conspiracy and start flooding you with hate; for example, nearly every song on Youtube has a comment saying the song has Satanic or Illuminati references, or whatever flavor of conspiracy you like.
https://en.m.wikipedia.org/wiki/Bloomberg_Billionaires_Index
Edit: Hi folks. Please remember I’m responding to a comment about public perception, not some ground truth idea of absolute wealth. These lists reflect what regular people are being told, and are probably a good indicator of public perception.
What is real disposable wealth?
This is true, but there will also be a set of just regular normal people who see what these powerful people are saying and doing and hate on them because what they are saying and doing is bad and hateful.
I suppose he gets all the credit for being authentic due to his telling the public not to buy TLSA shares, and the way he tries to work the number 420 into share purchase prices? Its all just theatrics, just as how he (and was photographed as he) carried a sink into the lobby of Twitter last year on the day he bought it. You'd think a heavily-burdened business leader would have things of greater import on his mind than cheap imagery.
Naturally, some of it could have been organic. I sure remember having a more positive opinion on Musk based on what he was able to accomplish with Tesla and SpaceX. It is only later as he was gaining more spotlight that the eventual reports of his work practices became more commonly known. OTOH, Gates remain that old guy that talks about sustainability, saving the world and stuff.
Come to think of it. Maybe you are right. Musk does not have PR team.
Sadly we cannot trust all billionaires to be 'enlightened despots', but at least in this case I say we lucked out - there's plenty stupid or harmful things he could've done
Like, for example, purchase Twitter and grind it into garbage. I'm joking, of course, but goes to show why Musk is considered an imbecile _despite_ having money and Gates is considered intelligent because he made money (and spends it well).
I'd point you to the relative popularity of the Media that is down on Musk and instructs others to be so.
We (in the US) should all worry as they move to private islands/beaches/New Zealand.
But G investors won't be very strong as a block on their own. There's a large block of environmentalists (maybe call them "E" investors), and another block of people who care about social issues (call them "S" investors?).
Then people can get together in one big, ESG, block, to try to make sure that modern companies think about environmental, societal, and corporate governance issues.
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ESG has plenty of faults mind you. But the methodology to organize our money into blocks that focus on these issues is sound. We just need to come up with a better governance issue for ESG itself.
When Blackrock makes an ESG fund, they'll look at governance issues like "Oh, Netflix has crappy governance", and then refuse to give them any money. ESG-funds focus on funds that have good environmental/social/governance records.
If anyone wants ESG-money, they have to match the baseline requirements of ESG-investors and what ESG-funds will offer. Otherwise, you don't get our money.
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The other reason why ESG works, is this "G" issue. Companies that care about shareholders will, on the average, return more money back to shareholders over the long run.
Companies like Netflix who hoard power to themselves and overpay their C-suite are obviously wasting money anyway, and therefore make for crappy investments. "G", theoretically, is just a good idea for investors to think about _anyway_.
AKA: If Netflix are a bunch of assholes, no biggie. I can invest into Disney instead, who has a much better G/Governance structure. And Disney+ is kinda kicking Netflix's ass right now anyway, so I think there's a good chance I'd make more money.
If Netflix wants my investment money (or the investment money of anyone else in the ESG group/fund I'm part of), they'll need to fix their G/Governance issues. If for nothing else, for more fair compensation of their C-suite.
I also think there's some inherent conflict in the S part of ESG investing. i.e. a truly socially responsible company would be returning most of its earning to the workers who actually did the work that earned that money, rather than funneling it to shareholders. Which makes those companies a bad investment, which means ESG funds that extended their S goals that far will fail and ESG funds that don't will get good returns for their investors and continue on - so by definition the S goal is limited.
The main thing investors have been focused on in the last 30 to 40 years has been lowering fees, in particular "passive" investing which is based on very obvious metrics ahead-of-time.
"Active" investors may have cared about these governance issues before, but their fees were just too high in practice. But I think we're seeing the blowback now as more-and-more companies come out with crap governance structures, knowing that they can take advantage of the easy-money from passive investors.
I don't know if things will swing the other way. But ESG seems like a way to keep fees low but still have a degree of thought put into corporate politics.
I'm not "bullish" on ESG btw. But I think its a step in the right direction, and I think that its a good thing that people are thinking about how to solve the issues that arose from this era of passive investing. Whether or not ESG truly solves the problem remains to be seen however.
If the CEO only has one job and that is to make profits for shareholders that is a single measurable benchmark the shareholders can hold him accountable to. But now the CEO can make whatever decision he would like and use nebulous and hard to track ESG goals to justify it.
That's never been true, though, and arguably for good reason. The CEO is supposed to act in the best interests of the company, which may not be ideal for short term profit. Trying to simplify to that metric is likely to make the bad behavior even worse.
You're the one who added "short term" to profit.
The CEO is supposed to maximize the discounted future earnings of the company.
But a group of investors, calling themselves ESG, are now caring about ESG issues. If ESG investors grab hold of your company's shares and become the owner of the company, it becomes the company's responsibility to listen to the (now ESG-aligned) shareholders.
Its mutually beneficial. ESG has enough money that its worth pursuing their money. And ESG is a vague enough political concept that the pool of investors is rather large in practice. Yeah, people like to make fun of how stupid the metrics are and all that, but... vagueness is kinda the point. They're trying to be as large as possible so that ESG issues can even come up in board meetings.
For example, you could say "we need to beat climate change, otherwise there won't be any profits on a dead earth".
That's why the metric is discounted future earnings. So that you can't "justify almost anything".
Well, that's where ESG is going by the wayside. But that's the nature of working as a block, there's so many constituents here our voices get watered down. But "as a block", our money is much larger together.
ESG has proven that it is possible to create these pools of money that tries to think about these issues. Moving forward, ESG investors (and ESG managers) need to be more clear on what those goals are and who to reward, and how to balance profits vs social good.
I was once also convinced that ESG would make a difference. But this exposé by Aswath and the results of deploying "ESG" so far have proven that this concept is worse than worthless, but instead plain harmful (the video goes in details about this; e.g. you can package the most harmful activities behind some kind of ESG principle).
The normal fund won't care about ESG at all and your money will go to all kinds of different companies.
The ESG fund will market itself as ESG. You probably should read up on the benchmarks that the fund cares about.
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Ex: iShares ESG Aware MSCI USA ETF (ESGU) fund. You can buy it, or not buy it. ESG isn't about getting "all" the investors involved. Its just about collecting enough investors together that the pool of money becomes a feasible corporate-politics entity.
Other companies such as Google, Meta and Berkshire Hathaway have similar arrangements.
They could finally unleash innovation without the constraints of dumb Wall Street and institutional investors who just "didn't get it"! They wouldn't be at the supposedly short-term whims of the fickle stock market!
I'm happy to see the opinion here finally shifting. It seems people are finally realizing there is something to be said for actual corporate accountability to shareholders.
Massive corporations are built on providing value to consumers. Netflix and its ilk have unquestionably done so. Why do we need to dive into the internals of how they work and what they pay their executives? What does it matter? They provide a service that millions (billions?) of people are happy to consume. Isn't that enough of a public good?
Why do we need to dive into the internals of how they work and what they pay their executives? What does it matter? They provide a service that millions (billions?) of people are happy to consume. Isn't that enough of a public good?
Don't think, just consume product and get excited for next product.
It's a means of retaining power that was already concentrated in the hands of the founders. You've failed to explain why the are obligated to give it up simply by listing on a public exchange (hint: they're not).
"publicly traded" doesn't mean anything besides the fact that shares are available on public exchanges. The fact that they're available on a public exchange is no guarantee that you'll be able to use them to influence the way the company is managed, or that the company owes you any accountability at all beyond what is strictly legally required.
> If you want to trade ownership for access to deeper capital pools, then you have to govern through merit rather than clever structures
What if you want to trade a share of future profits for capital? Why is that "wrong"? It seems like in your world non-voting shares are immoral.
> Don't think
Laypeople are poorly equipped to speculate about highly specialized work (such as executive management). Dunning Kruger applies here. You didn't actually answer my question though: assuming you're not a Netflix shareholder, why does it matter to you what Netflix pays their executives? Haven't Netflix earned their money? Doesn't that give them the right to distribute it as they see fit? What is the basis for your claim otherwise?
It seems like in your world non-voting shares are immoral.
Yes. It promotes unaccountable rentier capitalism, and I do not consider market price signals alone a sufficient check on human greed to yield optimal outcomes. The oft-stated benefits of price theory depend on a market in which perfect competition obtains (total transparency, zero cost to entry or exit of the market, completely fungible commodities), and most markets are not that simple.
Laypeople are poorly equipped to speculate about highly specialized work (such as executive management). Dunning Kruger applies here. You didn't actually answer my question though: assuming you're not a Netflix shareholder, why does it matter to you what Netflix pays their executives? Haven't Netflix earned their money? Doesn't that give them the right to distribute it as they see fit? What is the basis for your claim otherwise?
I don't owe you an answer, especially not with this rude hectoring behavior. Work on your manners.
It matters because corporations enjoy great legal protections by being able to operate within a wealthy and highly developed polity, and by accumulating wealth are also able to shape that polity by lobbying for favorable tax, regulatory treatment and so on. So in that sense, executive compensation is a topic of general public interest because executives have an outside impact on social norms and future policy. As far as Netflix is concerned, the company has earned its money but some of that money has been earned on the backs of writers, who have offered a good argument for why they are underpaid relative to historical standards. As a writer and WGA member myself, I'm in favor of Netflix giving writers a better deal rather than merely exploiting their market dominance. And while the shareholder resolution is not binding, apparently a majority of the owners of Netflix also feel that writers' contributions to the firm's success has been undervalued and expressing their opinion on how that wealth should be distributed.
As I said earlier, if you don't want to be accountable to a large group of owners, don't become a publicly traded company. Stay private, govern the corporation by fiat, and and do what you want within the law. It might take a little longer to achieve market dominance in your industrial sector, but if the world is truly meritocratic then success is presumably assured.
Optimal for who? By whose measure? Your position seems to be based on an assumption that you know what's optimal for all of us, and that you're willing to impose that on others. Pardon my disagreement. "Rentier" capitalism also assumes that you can distinguish which economic activity contributes to society and which does not. What criteria or principles do you use to make that distinction? Honest question.
> corporations enjoy great legal protections by being able to operate within a wealthy and highly developed polity
It is the liberal economic policy that birthed the wealthy and highly developed polity, not the other way around. Corporations enjoy great legal protections because otherwise we would not benefit from their existence. And benefit tremendously we do. My whole point is that we should leave them well enough alone because we all reap incalculable wealth from their marketable innovations. We already have a golden goose, and you seem to be suggesting that we smother it with governance.
> executives have an outside impact on social norms and future policy
How would this impact be curtailed by a more stingy compensation package? Executives wield their influence via the corporations they control, not their private bank accounts.
> the company has earned its money but some of that money has been earned on the backs of writers
On the backs of writers who were compensated for their services at a rate agreed by both parties? Seems like a pretty fair deal to me. I don't see why anyone should be paid more than they can freely negotiate for their services from people who are interested in retaining them. In a free society, people are inescapably paid according to how expensive they are to hire, train, and replace. It's the same reason why writers are paid more than agricultural labourers, and executives are paid more than writers. If you can devise a scheme to hire 10 people at $10/hour and generate $1,000 in value, I'm having a hard time understanding why the remaining $900 isn't entirely yours. I see this sentiment a lot and honestly hope you'd be so kind as to explain the calculus here.
Is this just your best guess? Just riffing? Because if you read the article, you'll see that last time it seemed to have made an actual difference:
"At that time, the company had already made changes to its 2023 compensation program for its top three executives, which in part capped each one’s salary at $3 million, required a minimum of 50 percent of compensation to be tied to stock options and introduced a performance-based cash bonus."
This is because the stock owners are not legally the owners of a company, they are just another stakeholder.
* https://hbr.org/2012/07/what-good-are-shareholders
* https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2277141
* https://www.ft.com/content/7bd1b20a-879b-11e5-90de-f44762bf9...
* https://www.forbes.com/sites/petergeorgescu/2021/07/21/the-s...
If you'd please review https://news.ycombinator.com/newsguidelines.html and make your substantive points thoughtfully—and avoid flamebait and name-calling—we'd appreciate it.
Which is optimal, because in a direct democracy, you get unelected de-facto leaders with zero transparency or accountability - it's simply impossible for a country of any nontrivial size to vote on every relevant issue (or draft bills through a purely democratic process), and so you'll get social media influencers and celebrities and political groups instead that sway the thoughts of millions of people, but without all of the constraints that elected leaders have.