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Comment by cj | Hacker News Reader

IMO an equation like that would be fine as long as you made it possible for CEOs of larger companies to make more money than CEOs of small and medium sized companies.

There’s a job market for C-Suite employees (whether we care to admit it or not). At a certain point you won’t get qualified candidates if you can’t reward them enough, same as engineers or any other role.

The answer for how much CEOs should be paid is the amount of money you would need to pay to employ the most optimal person to run the company. Figuring out what that number is is difficult.

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Well that's simple, larger companies that want to pay their CEO more can pay their lowest paid employees more.

That's moronic. A good CEO at a fortune 500 company could have a $100M revenue impact. That same CEO could never be worth $100M to a local restaurant. The idea that the bigger company can't offer more to attract a better CEO just because both businesses employ janitors that make market rate is mind-numbingly stupid.

I thought janitoring was all contracted out these days.

But the fortune 500 company can offer more for its CEO. It just has to pay its janitor more. Which it totally can, being a fortune 500 company.

If they can afford to pay the CEO 100M they can afford to pay above market rate to the janitors, no?

Do you have arguments or are you just going to call someone a “doo-doo head”?

Business's exist to make money, not give it away.

Fascinating.

So why are we entertaining 100M salaries? That sounds like giving away money.

The board of directors believes the CEO adds more shareholder value than they cost.

That's so fascinating.

The janitors don't?

They certainly dont add $100 million of value. Probably add at least as much as they're paid but that's not saying much

How do you come to that conclusion?

The cleanliness of an office space is a gigantic force multiplier for productivity. I wouldn't be surprised if janitors had a bigger impact.

value is about opportunity cost. If anyone off the street could replace you your value is the lowest amount a competent person would demand on the market.

Do you really think anyone off the street could be a top-performing janitor?

I guarantee you California will find a way to legislate this view into existence within the next year, with horrendous results.

> There’s a job market for C-Suite employees

And it can sometimes be VERY illiquid. Headhunters help to provide this liquidity and get paid for it.

Sometimes C-suite career people can go years without a job. Not every CEO or CFO makes fortune 500 comp and many people falsely assume low compensation volatility as e.g. a "career CFO". It can be extremely stressful, especially with family/dependents.

No. There is no financial stress in a CEOs life. The CEO that can't afford private yacht lessons for their daughter is not the same as the single mom working 2 jobs to feed her children. Stop drawing a false equivalency.

Total straw man

No. Financial stress comes from not being able to meet your basic needs. Everything after that is a choice, and choices are reversible.

I agree but would phrase it differently: C-level stress is often self-created – gotta have a bigger mansion, longer yacht, hotter trophy wife, etc. than my frat buddies - whereas many of their employees’ stress is externally-driven - hoping the car doesn’t break and cost you a job, worrying that the cost and time of a return to office mandate will take a big chunk of what’s left of your margin after inflation, etc.

I think of that whenever I’m back in San Diego and remember the tree poisoning lawsuit where these two rich guys were feuding because the one whose mansion was in front had a tree which kept growing and the other guy thought that was depriving him of a fractional sea view. This ended with the twist that he paid his gardener to poison the tree, but was caught and … I just couldn’t get past thinking about how this guy was a millionaire, living on the cliffs over one of the world’s better ocean views, and all he could do was think that it wasn’t a degree wider.

I'm married to an exec and I can tell you both that

(a) The stress is very real, and (b) It's not self-created, it arises due to the responsibility and magnitude of decision-making coupled with having to deal with other execs that are promoted beyond their ability yet somehow still have absolute faith in their ability to lead and execute despite their limited experience, worldview, or both, and (c) It seems to be about the same amount of stress as those worrying about tight finances, but less than those worrying about where the next meal is coming from.

Having said that the majority of CEOs that my spouse and I have worked for cannot find their asses with both hands but a minority of them have been incredibly good and well worth the compensation they were paid.

"About the same" is not the same. I'm sure it's a stressful job, but it's also self imposed. If you're getting paid a CEO salary, you can quit and live off investments after a single year of doing it.

It is in no way comparable to people that need to work to live.

>C-suite career people

How do these people get to be C-suite career people? Seems like you basically have to be born into modern nobility. I've asked people who work with them about this and they make these vague claims about 'ultra drive & competitiveness' but I don't buy that those things are magically statistically concentrated in Ivy League grads.

And hence median vs minimum, median scales well, but minimum is more aggressively equitable -- after all, it's a nice 'soft scaling lock', which we currently seem to struggle with.

If we can hit a nice logarithmic return on investment for company size, I think that would be nice. Like many things, perhaps impossible to easily achieve, but it's a nice thought in idea at least methinks <3 :'))))

> The answer for how much CEOs should be paid is the amount of money you would need to pay to employ the most optimal person to run the company.

"Should" by what standard? Minimizing deadweight loss?

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