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Comment by GuinansEyebrows | Hacker News Reader

I need to shout into the HN void that, yes, $414k is a very high compensation.

The CEO of a blood bank likely has the skills and connections to be a CEO of many other for-profit companies, where they would make much more than $414k. Intermediate FAANG employees are paid more. I’m perfectly happy that this person gets $414k for their role in _saving lives_.

Mid level faang employees get paid over 10 times more than me? I need to get a new job...

Fwiw, here are a couple other rough estimates of pay in the US. These are entirely my opinion, but I am in engineering so I think these are pretty well calibrated. I only share these because they might be useful to get a sense of how your job measures up:

Entry level engineering (any type): 80k minimum

Entry level software engineering: 120k minimum

Multiply by 1.5x for high cost of living area (Bay Area, New York, Boston, LA)

Multiply by 2x for FAANG in HCOL area

Levels.fyi gives good estimates of software eng pay bands above entry level. Non-software almost always makes less :/

I’m not convinced that any CEO is worth what we generally expect they be paid.

Emotionally I agree — what could these people be doing to uniquely add millions of dollars of value? However, the fact that they aren’t replaced with cheaper options is (imo) pretty good evidence that they are uniquely worth that pay. If there was a cheaper option, the board of directors would replace the CEO, and enrich themselves and other shareholders with the saved money.

Either way, that’s kindof disconnected for the CEO of this bloodbank. Their opportunity cost is quite high. They choose to work for comparatively low pay, but have a positive impact on the world.

i think i understand where you're coming from, but i think you're begging the question a little bit (ie, ceo pay is high because it is high).

i do think it's more likely that the executive class has a vested interest in keeping their own pay high (not just CEOs, but board members as you've mentioned), and they've got a lot more class solidarity than the rest of us, though they'd never put it that way - it's just The Way Of Things, you know? divide and conquer.

i should maybe mention that i'm a public employee and my "opportunity cost" is also relatively high, but... hell is hot, and i want to be able to sleep at night.

The board and shareholders are not made of CEOs. They are compensating the CEO highly because it’s giving them stock returns.

If that correlation doesn’t exist, then investors should be able to easily drive CEO comp way down.

The boards of most public companies are made up mostly of C-level executives of other public companies. Retail shareholders hardly ever get involved to a sufficient degree to fire boards.

Why would retail shareholders need to get involved?

That's what we have eg corporate raiders for.

The strongest predictor of you wage is physical distance to the CEO outside business hours. The second is physical distance to the CFO.

Since CEO is with them all the time, it follows they get the most.

I don’t think this is a rebuttal of my point above, but I do think it’s a very interesting claim! Could you link a study/article about this?

Agreed.

There is a good theory on why CEO's are paid more than they're worth called tournament theory.

A person in an upper layer of a hierarchical organization is paid for the value they provide PLUS an amount that incentivized anybody below them to reach that layer. If everybody is paid just for the value they provide, they wouldn't have a reason to try and reach higher layers and they would minimize work. After all, we cannot assume the value a person provides goes up in higher layers.

This additional pay bubbles up in larger organizations to exorbitant levels for CEO's.

Are you suggesting that shareholders are selfless donors to CEOs?

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