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Microsoft CEO Nadella's compensation drops... to $48M — CEO to employee pay ratio hits 250 to 1
(www.theregister.com)
this post was submitted on 21 Oct 2023
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do you not think being good at something increases the amount you should be paid?
To a degree, yes. I can believe that somebody's labor could be worth 5-10x another person, but 200-300-400x? No, at a certain point, your labor tops out in value.
Making successful choices is not by itself sufficient to determine the "value" created. If I choose winning lottery numbers and win 100 million dollars, that doesn't mean my decision on those numbers is worth 100 million dollars, it was luck.
There is more to value than just how much money results from a decision. And also, the value is generated and enabled by the workers at the company, not just the CEO.
If I tell a group of 10 people to build a piece of software that I think will be really profitable, and those 10 developers build it. Then I sell the software to another company for 10 million dollars, take 9 million of it for myself, and give the rest of the developers 100k, is that fair and right? When without their labor, I would have zero dollars? My idea and leadership isn't worth anything without the labor of the people I am leading and who make my idea reality.
Now you can say that the devs also wouldn't have 100k because they wouldn't be smart enough or have the vision to write that software themselves, which is dubious, but even if we grant that, I can understand that being worth more, maybe an extra 50-100k. Not millions more.
At a certain point, it becomes egregious and disgusting.
I would argue this is exactly what makes successful CEO's so valuable. It's a very valuable skill to be able to take educated risks. it's not a lottery. CEO's don't get paid how much they do because they're lucky.
Their labor is replaceable. The developers just did the work on the ground, which is honorable and should be compensated, but being in leadership to bring a development project past the finishline and into profit is a lot more scarce a skill than being a developer itself. And developers almost always make out like bandits if they have a decent package.
Sorry you haven't really made a convincing argument.
They actually do get paid what they do largely because they are lucky; lucky to have the privileges that allow them to get a high-end education, get into fancy business schools, make connections, have layers of safety nets for all the times their ideas fail, and then finally get lucky with their company, right place and time for it to take off and become extremely profitable, etc.
It's a lot more scarce a skill because it's manufactured to be that way. Imagine how many people would be able to test out their ideas in the market if they had rich parents and friends that propped them up for years until they finally succeeded.
Or are you a subscriber to the Ayn Randian, "Great Man" theory? Which is bogus BTW.
"The developers just did the work on the ground..." yeah...as in making the CEO's vision a reality, the only action that directly results in material creation.
You're arguing all this against a strawman anyways. Nobody is saying that having vision, ideation, and compelling leadership aren't valuable skills worth compensating well for. People object to the idea that those skills are hundreds and hundreds of times more valuable than any other skills that literally make those ideas reality and allow that monetary value to be captured. Nobody ever became a billionaire by sitting on a bench all day, dreaming incredible ideas into existence.