Intel Said to be Considering Laying Off Thousands of Staff

[mahirzukic2]

It depends. But generally CEO can't increase their own salary or severance package without board approval.

Not only that they can't increase their own salary and total compensation at all, but rather for their salary and total compensation to be increased, somebody from the board members has to suggest it first, and bring it up to voting with the whole board assembly.

 

[zlobby]

Not only that they can't increase their own salary and total compensation at all, but rather for their salary and total compensation to be increased, somebody from the board members has to suggest it first, and bring it up to voting with the whole board assembly.

Well, I've seen rare cacses where it's in their contracts to be able to increase their salaray unanimously, BUT only if certain performance goals are reached. That's apart from bonus schemes.

Live enough and I guess you'll see it all.

 

[thesmokingman]

The board denied Gelsingers last attempt to overpay himself btw...

 

[RandallFlagg]

Not only that they can't increase their own salary and total compensation at all, but rather for their salary and total compensation to be increased, somebody from the board members has to suggest it first, and bring it up to voting with the whole board assembly.

This is a problem that takes thought, I don't really think it has to do with the magnitude of their pay. It has to do with how they get paid.

I believe if companies were not allowed to use stocks which they fabricate out of thin air to pay executives, executives would not be paid nearly as well.

The reason is pretty straightforward. By creating $100M in stocks and giving them to the executives, corporations aren't actually paying a dime out of the corporate coffers. This makes it too easy for them to do, it makes executive pay 'cheap' from their perspective.

But nothing is free. The ones that pay for it are the shareholders, who see the value of their shares diminished by this.

Now if that 100M came off the bottom line, hurt their profit, emptied their bank account, they'd think quite differently. It would become far more competitive, and executive 'compensation' would almost certainly drop.

Just pay them the same way normal people are paid - payroll - and for one it becomes subject to payroll tax (37%) and not capital gains tax (20% max). There's also big incentive to make people compete for top jobs, just like regular people.

They can still get bonus', just like normal people. Just keep in mind, that bonus comes out of profits, not out of the shareholders equity. And full normal taxes need to be paid on it.

 

[dragontamer5788]

But nothing is free. The ones that pay for it are the shareholders, who see the value of their shares diminished by this.

And the shareholders own the company.

Yeah, I think modern Americans don't understand how shares work (my uncle was trying to tell me that various stocks would go up when they did a split... a LOT of ignorance going around in my family, coworkers, and friends). That's the main issue. So companies try to extract value from people who don't know what's happening.

From this perspective, it doesn't really matter if they paid from the company's coffers or from stocks. The shareholders by and large, don't pay attention to such details and probably don't read 10k statements either.

 

[mahirzukic2]

This is a problem that takes thought, I don't really think it has to do with the magnitude of their pay. It has to do with how they get paid.

I believe if companies were not allowed to use stocks which they fabricate out of thin air to pay executives, executives would not be paid nearly as well.

The reason is pretty straightforward. By creating $100M in stocks and giving them to the executives, corporations aren't actually paying a dime out of the corporate coffers. This makes it too easy for them to do, it makes executive pay 'cheap' from their perspective.

But nothing is free. The ones that pay for it are the shareholders, who see the value of their shares diminished by this.

Now if that 100M came off the bottom line, hurt their profit, emptied their bank account, they'd think quite differently. It would become far more competitive, and executive 'compensation' would almost certainly drop.

Just pay them the same way normal people are paid - payroll - and for one it becomes subject to payroll tax (37%) and not capital gains tax (20% max). There's also big incentive to make people compete for top jobs, just like regular people.

They can still get bonus', just like normal people. Just keep in mind, that bonus comes out of profits, not out of the shareholders equity. And full normal taxes need to be paid on it.

That's the thing. If you as a shareholder don't like the constant dilution due to enormous stock packages to C-suite guys or that company may not be doing that well, regardless if these 2 are occurring together or are linked to each other, leave, sell the stock. Go buy another stock.
That's the point of free market, it gives you freedom to choose between 10s or 100s of thousands of company stocks.
You pick and choose the best one (for you). This is easier said than done, as it would require a ton of market research to do in order to be able to switch from 1 company stock to the other.
And big companies know this and ride this fact as can be seen by those enormous stock packages to C-suite guys already mentioned.

 

[zlobby]

This is a problem that takes thought, I don't really think it has to do with the magnitude of their pay. It has to do with how they get paid.

I believe if companies were not allowed to use stocks which they fabricate out of thin air to pay executives, executives would not be paid nearly as well.

The reason is pretty straightforward. By creating $100M in stocks and giving them to the executives, corporations aren't actually paying a dime out of the corporate coffers. This makes it too easy for them to do, it makes executive pay 'cheap' from their perspective.

But nothing is free. The ones that pay for it are the shareholders, who see the value of their shares diminished by this.

Now if that 100M came off the bottom line, hurt their profit, emptied their bank account, they'd think quite differently. It would become far more competitive, and executive 'compensation' would almost certainly drop.

Just pay them the same way normal people are paid - payroll - and for one it becomes subject to payroll tax (37%) and not capital gains tax (20% max). There's also big incentive to make people compete for top jobs, just like regular people.

They can still get bonus', just like normal people. Just keep in mind, that bonus comes out of profits, not out of the shareholders equity. And full normal taxes need to be paid on it.

And the shareholders own the company.

Yeah, I think modern Americans don't understand how shares work (my uncle was trying to tell me that various stocks would go up when they did a split... a LOT of ignorance going around in my family, coworkers, and friends). That's the main issue. So companies try to extract value from people who don't know what's happening.

From this perspective, it doesn't really matter if they paid from the company's coffers or from stocks. The shareholders by and large, don't pay attention to such details and probably don't read 10k statements either.

You'd be surprised how many shareholders and VCs have so little idea of what a given company does and it does it. All they care what the potential profits will be, and they do everything in their power to get them.
CEO is often installed not for their competence, rather for their obedience. Often these CEOs know that they need to do something quite stupid or or plain obscene just to get the stock price at certain level, knowing they will get their cut of the pie.

In all honesty, how many of us here will turn down, say $100m as a CEO, only to do something fundamentaly fucked up, which eventually will result in 1000s of employees being fucked up badly for the years to come?

That's the thing. If you as a shareholder don't like the constant dilution due to enormous stock packages to C-suite guys or that company may not be doing that well, regardless if these 2 are occurring together or are linked to each other, leave, sell the stock. Go buy another stock.
That's the point of free market, it gives you freedom to choose between 10s or 100s of thousands of company stocks.
You pick and choose the best one (for you). This is easier said than done, as it would require a ton of market research to do in order to be able to switch from 1 company stock to the other.
And big companies know this and ride this fact as can be seen by those enormous stock packages to C-suite guys already mentioned.

And this essentially boils down to the root of the problem - nobody cares what's happening with the C-'minus' and lesser employees, for as long you get your promissed money. Then, when a given company is fucked up beyond repair you just jump ship to another one.

And even HR and recruiters promise you a paradise, knowing very well how the scheme goes.

There are of course ways out of this but I personally can't see it happening anytime soon.

 

[RandallFlagg]

That's the thing. If you as a shareholder don't like the constant dilution due to enormous stock packages to C-suite guys or that company may not be doing that well, regardless if these 2 are occurring together or are linked to each other, leave, sell the stock. Go buy another stock.
That's the point of free market, it gives you freedom to choose between 10s or 100s of thousands of company stocks.
You pick and choose the best one (for you). This is easier said than done, as it would require a ton of market research to do in order to be able to switch from 1 company stock to the other.
And big companies know this and ride this fact as can be seen by those enormous stock packages to C-suite guys already mentioned.

It's the same issue in a sense with everything. Things are obfuscated through unnecessary complexity. These things are sold to people as one thing, when they are really another. It's why a lot of people support flat tax, the same thing will just keep happening if there is any complexity.

Back in 1909 for example, state legislatures under public pressure voted to ratify an income tax amendment to the US constitution that the US congress was pushing. Why would people do that? Because they were told that income tax was going to 'soak the rich' and make them pay their fair share (that's where the phrase came from).

Income tax is now otherwise known as a payroll tax, and rich people either aren't on or make very little of their income from payroll.

I don't think things will change, simply because people can't admit to themselves that they either cannot or simply don't have time to figure out complex systems. If you want transparency and fairness, you have to have simplicity.

 

[mahirzukic2]

And this essentially boils down to the root of the problem - nobody cares what's happening with the C-'minus' and lesser employees, for as long you get your promissed money. Then, when a given company is fucked up beyond repair you just jump ship to another one.

The worst thing is, that this system is the best we can have, or rather the minimally bad system compared to the others.
Now imagine just how bad the other systems are.

 

[zlobby]

The worst thing is, that this system is the best we can have, or rather the minimally bad system compared to the others.
Now imagine just how bad the other systems are.

It's not the best we can have but it's what we have. And it's not good by any means.
What happened happened for a reason and couldn't have happened any other way.

I don't have to imagine anything. I know what it could have been and what it can be. Yet, here we are.