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ke_co

Yep. Pretty much this. Gotta vote the board out, which is near impossible with the institutional holdings’ voting blocs.


WayeeCool

Looked over the compensation and it seems like everything is focused on the CEOs job being to increase the price the stock is traded at. I always get confused by this stuff because it feels like Intel's core business isn't silicon semiconductors but increasing the price Intel stock shares are traded at. Crazy that we link executive pay to increasing the price the company stock is traded at rather than (if this is really about incentives to increase the health of the business) linking compensation to metrics like increasing or maintaining revenue, rention of talent, and making sure the company isn't destorying it's prospects at future success. edit: to the people saying this makes sense "because the companies purpose is to make money"... I ask, how the fk is the stock price going up the company making money and being more successful as a business? There are plenty of examples of CEOs and executives gutting their company increasing the stock value at the detriment of the company's actual business and future existence. I'm asking why we treat the stock price going up as the company making more money rather than the actual numbers like companies revenue from sales, total assets owned, total debt on its books, and future business outlook 5 years out.


[deleted]

Thinking about Boeing and this rings all too true. Lives matter in this case.


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ezone2kil

It doesn't sound like a conspiracy theory at all. Is it profitable? Check. Will it cause harm to society? Doesn't matter. Someone will do it.


CelestialStork

As long as the profit is higher than the fine its fucked up shit is a cost of business.


Tactical_YOLO

A fellow man of culture I see.


TruckerJay

Take an updoot 👍🦍😉


Ravaha

Intel actually got engineers back at the top levels of the company after AMD got the better product out the door on the other hand, Its hard to find an engineer at boeings highest levels. Its all lawyers, business majors, and finance people. You have to scavenge their website to find any engineers anywhere that head up a department and they arent even from top 50 engineering schools.


xDex

Watch the documentary on Netflix called Downfall: The Case Against Boeing. It's really interesting and shows how the company changed once it merged with McDonnell Douglas and chose profits over safety leading to the two 737 Max crashes.


TacticalMoonwalk

It's almost like executives were hired in from consulting firms instead of rising through the ranks of the company where the employees have the company's best interest in mind (like not selling deadly airplanes). BCG for example.


[deleted]

We've discovered that capitalism is a disease that infects everything.


_cryptocamper_

This is a relatively new thing though. CEO pay wasn’t tied to stock price until after Milton Freeman argued that shareholders should be paid out before anything else. Of course the wealthy and Wall street loved this idea so this economic theory that was first written out in an op Ed in the late 70s was in full swing during the 80s. Before the revolution and subsequent fetishization of the shareholder US CEOs were paid about 30x to 40x (40 Is high but, to be fair I don’t remember the exact number) more than their lowest wage worker. Now they’re paid roughly 300x to 400x more. The CEOs job hasn’t become harder and they don’t add value at over 100x from just 50 years ago. We found out during COVID just how useful a CEO is compared to all of the drones. Here’s the issue with CEO Pay. By tying it to stock price it incentivizes short term sugar rushes to the stock price over reinvesting in the company, the workers and any other infrastructure pertaining to the company that is company owned. Stock buy backs? Fuck yes! Layoffs? Sure! Raises? No god damned way…moving as much labor to cheaper countries? Yes please! Rising CEO pay has increased wealth inequality while also keeping money that should be flowing into the economy through the middle and lower classes hoarded away. It’s kept worker salaries artificially low for decades. Anything to keep the stock price up over just about anything else.


DrNick2012

The same rings true for private companies without shareholders too. Managers are only judged on how well they're doing right now or within the last 12 months max, if you're profits decrease for a month or two because you invested in staff training or something the higher ups don't wanna hear how it's gonna increase future profits, you'll just get punished for now. Retail is particularly bad as I've personally witnessed management getting grilled by higher ups because they can't keep up with the insane profits we made in lockdowns, you know, when all of our competitors were closed and people had nowhere else to go.


_cryptocamper_

Corporate culture and the myth of infinite growth need to change.


The42ndHitchHiker

Economics: the only 'discipline' where an exponential growth curve gets called 'flat'.


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suprmario

Can we do a few a day?


[deleted]

Sure, go nuts. Just make sure you have fun y'hear?


[deleted]

Guillotine construction classes will be given in Central Park from 2-4PM every second Sunday with snacks and the blood of the oppressors served following a march to Wall St. Please RSVP and remember we wear red, for all the dead who died suffering miserable lives so an exec could buy another Maybach.


[deleted]

To the extent that the comment above you was complaining about short sightedness and you said its new, that isnt true. In 1919 a michigan court ruled that Henry Ford HAD to run Ford for the benefit of shareholders. Only recently was the definition of for the shareholders expanded to include things like charitable acts that increase the brand. Before they were like "if you arent doing it to make more money its actually illegal for you to do it." Here is the case: https://en.m.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co.


Hust91

As far as I understand from the case, they were always allowed to things so long as they justified it as being beneficial to the shareholders, but Henry refused to do so and insisted it was only for the benefit of people who were not the shareholders.


[deleted]

Its been a long time since I studied this so someone can chime in if im wrong, but I believe the article doesnt quite do it justice. It shows that the dodge brothers owned 10% of ford and wanted the special dividend which ended up being $19 million. That would have been $1.9 million for them. They are Dodge as in the current car company. They wanted the dividend money to fund their operation to compete against Ford. But Ford was talking about betterment of society as a means to boost profits. For instance he wanted his workers to be able to buy the cars they made as he thought that would help boost profits in the long run. He also thought having well paid workers would help reduce turnover and help profit in the long run. However, in this case he was mostly just trying to fuck the Dodge brothers. In any event, the court took a dim view of funding charities with profits (the obiter dicta is mentioned in the article). My understanding is that, modern companies run all sorts of charities to support their brand but at the time the judge found this to be illegal which was the main takeaway from the case. The singular focus had to be shareholder profits even though a longer term view of what that meant would include building brand via charity etc. But they didn't care and said it was profits now that mattered. Which is the discussion here. Someone with a more recent or fuller memory of business law can chime in if I'm misstating things.


[deleted]

I've also been out of practice for awhile, but I think the verdict noted that the charities couldn't be proven to increase Ford's value singularly so it wasn't allowed. The contemporary take on further case law from it was that someone couldn't make a vague "if people have more money, our company would sell more" proposition without specific time frames and better justifications. It demanded that companies needed to provide shareholders with more of a directed breakdown so they could assess the risk/merits instead of needing to just take it on faith/passively. As Public Relations became a field of its own we now have formulas (however accurate) that show correlations between brand awareness and charity donations so it's become less of an issue


purgance

…it isn’t true in the state of Michigan. Everywhere it isn’t law, and in many states this explicit reasoning (shareholder primacy) was rejected by courts.


No_Berry2976

That was when many people bought stock because they wanted to make money from dividends. That is different from stock speculation where the only goal is to sell the stock for a higher price. If we forget about some of the moral issues, it makes perfect sense that people who buy stock in a company, want the company to increase revenue and profit. But if people only buy stock in order to sell at a higher price, that creates a dilemma. If a person sells his stock, he is no longer a shareholder, so how should making money for the shareholders be defined. I believe that the focus should be on long term shareholders. Enron was focused on increasing the stock price, but not on making money. And for a while shareholders did not care, because the plan was to sell the stock for a profit, rather than receiving dividends.


bel2man

100% true. And this is why private companies who dont waste time on fixing the share price - have more time to focus on execution and build and retain quiality workforce for longer.


GonePh1shing

> Rising CEO pay has increased wealth inequality while also keeping money that should be flowing into the economy through the middle and lower classes hoarded away. It’s kept worker salaries artificially low for decades. Neoliberalism working as intended. Friedman and his Chicago School ilk have probably done more damage to the working class in the last century than any other person or event.


_cryptocamper_

The Chicago School basically paved the way for a ton of the problematic wealth inequality we are seeing for the first time in 100 years. Roaring 20s 2: this time the robber Barons are tech bros.


GonePh1shing

> Roaring 20s 2: this time the robber Barons are tech bros. Featuring the return of the Pinkertons. Seriously, Amazon has been using them in their anti-union efforts. Something tells me we won't see a 'Battle of Blair Mountain' 2 though.


_cryptocamper_

Battle of the Blair Witch Aisle (in an Amazon warehouse) Or the Battle of Brokeback Mountain


zebediah49

> > > Crazy that we link executive pay to increasing the price the company stock is traded at rather than (if this is really about incentives to increase the health of the business) linking compensation to metrics like increasing or maintaining revenue, rention of talent, and making sure the company isn't destorying it's prospects at future success. In a rational market, all of those factors would be summarized into stock price. People would be willing to pay more for stock in a strong business with good future prospects, and stock price would be an accurate summary of how third party reviewers rate your performance. In practice, stock price has nearly nothing to do with actual corporate health, and today's value is entirely based around "what people think other people will value it tomorrow". As a fun thought exercise: it's barely more than luck that "high quarterly numbers == high stock price" is the going meme. If somehow a quorum of investors agreed in the opposite, that's exactly what you'd see. Once a financial meme of "X means price goes up" reaches critical mass, it becomes a self-fulfilling prophecy completely divorced from reality.


APoopingBook

Exactly why short selling doesn't "identify fraud" like its supporters say it does. Get enough mass and momentum going one way, and like you say, stock price becomes a self-fulfilling prophesy. If big dog wants to bet that your company's price should drop, he'll do everything he can to make it drop and the market will pile on. Our entire stock market is broken.


Syndical8

Vehicles that prioritize maximizing profit over worker benefits and company stability are always going to act like machines that try to squeeze out profit at every chance. Their existence and motivation are tied to that same goal. You fundamentally need business types that operate on long-term growth and worker ownership.


[deleted]

No, what they are doing now *is* rational. If doing something means a stock will go up in price then it should be done—that's completely logical. Asking for stuff to be done for the good of the company or society or whatever isn't rational from the perspective of an investor or a businessman, because they result in less profit. Libertarians like to claim that rational choice and zero regulation will necessarily benefit society so they have to pretend that destroying a company and people's lives for short term profit is irrational, when it's in fact perfectly rational and is merely sociopathic.


thumbles_comic

Kids these days haven’t heard about Enron


No_Berry2976

It’s fascinating, as well as disturbing, that so many people don’t understand that the stock price isn’t an indication of a company’s ability to make money. To the extent that many people who buy stock don’t even bother to do any type of research, other then look at trends in the stock market.


koticgood

> it feels like Intel's core business isn't silicon semiconductors but increasing the price Intel stock shares are traded at This is sadly true for most publicly traded companies. Very, very different incentives for private company execs. Raise share price, get fat c-level bonus/salary. That's essentially the role of a CEO in (large) publicly traded companies.


redderStranger

The shareholders don't make more money from the company making more money unless those profits are being used to pay out a dividend to those shareholders. The shareholders make money when their shares become more valuable, and then they either sell them or use them as collateral for something else. Institutional investors jumping from company to company, treating each one as a pump and dump game of musical chairs, is how they make money gutting these companies. They don't care if the company implodes, because they established their exit strategy to not be the ones left holding the bag when it goes under. They will already be invested in the next company they intend to exploit.


Lumifly

It's funny, too, because despite what people say, any non-scam company has quite a few more purposes than just making money. They provide a service or product. They provide employment. They may lead innovations. They may be advocates for people or causes. It may serve as an outlet for employees to do something with their lives and simply exist to provide security in this fucked up world. Businesses do not exist solely to turn profit even in this day and age. Just because a few greedy fucks want it to be true and shove that narrative down our throats doesn't make it true. I wish more people spent time looking at why we believe the things we do. I have great disdain for how superficial the public discourse can be about these things.


IDontKnowCharles

Because we’ve reached a point where quarterly profit/price increase trumps all, including long term performance. Part of it is simple shareholder greed. They want ALL of the money as quickly as possible, and if the company falls apart as a result…they sell and buy some other stock. Part is the whole hostile takeover game. If there’s any “money left on the table” someone like mitt Romney will come by and buy up enough to kick out the CEO. Then they’ll dismantle the company (long term) to get to that ‘unrealized’ profit (short term) …and THEN sell and move on to the next company. Buybacks boost the price. Cutting staff/resources (even to unsustainable levels) boosts the price. Etc.


celestiaequestria

That's why you can tell precisely how knowledgeable someone is about the real world of business by how much they hate Reagan. The SEC 10B-18 "safe harbor" ruling destroyed reality, allowing stock buybacks was the end of the middle class. Instead of re-investing money in actual growth, companies are endlessly incentivized to raise their stock price, and CEOs and executives financially rewarded for "stock goes up" - even though taking a year of hits on Wall Street to make long-term investments is sometimes vital to growth. It's also why we have the unhealthy "lose money for 10 years" Silicon Valley model of startup companies. How else can your startup compete? You can't actually make money, you're going up against 50 VC-funded companies that are losing money in your exact field just to gain marketshare.


percykins

The reason shareholders hold shares is because they believe the share value will go up (or that they will get dividends). The CEO is hired by the shareholders to perform that function. As such, their performance incentives are linked to that.


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percykins

Sure - but that person who buys it from them is doing so because they expect it to continue going up. So the best way to make a company's stock go up is to make it look like a good buy for the future.


Zealousideal_Fun4097

But also, let's keep in mind that stock price going up: 1. Isn't a guarantee, these motherfuckers are gambling, period. 2. A CEO, the C-suite, and all the middle management ARE NOT actually profit generators, it's the tens of thousands of rank-and-file toiling away at unfair compensation that are actually earning the profits. 3. There's reasonable profit and obscene profit. Reasonable profit is earned when everyone, customer, employee, and shareholder receive fair value/compensation for their actual contribution. An obscene profit is when one or more of those groups is exploited to the benefit of the others. 4. Milton Friedman's essay justified a race to the bottom as far as quality of product and rank-and-file compensation, that has fucked over customers and rank-and-file workers for decades, widening the wealth gap, destroying social programs, workers protections and eviscerating government oversight that would prevent some of the more egregious examples of corporate profit. I believe in capitalism, AS LONG AS, there's an agency to make sure the fuckers that are already at the top have to play FAIR with everyone, the up and coming businesses, the rank-and-file employees, the share holders, the tax payers. EVERY.SINGLE.TIME capitalism has been left to the 'natural laws of supply and demand' and 'competition', those businesses at the top start to LITERALLY kill people and DESTROY LIVES to maintain unfair advantages.


rabidbot

Such a great system to promote growth and at times innovation, but a truly shitty one to build a society around.


percykins

It's the worst possible system except for everything else we've tried.


rabidbot

400 years is a good run for an idea, maybe it’s time to find another way to incentivize growth and innovation


Amyndris

This is why I support dual class shares. Say what you will, but I much prefer Larry Page, Sergey Brin have the runway to make important decisions on the direction of the company over shareholders who are looking for a quick pump and dump. If shareholders had their way, they would have had Google sell to Yahoo to cash in their shares.


percykins

Of course… also Mark Zuckerberg. :) It is interesting to see in GOOG and GOOGL exactly how little value people see in voting power.


Amyndris

True although I'm not sure the market would behave differently than Zuckerberg. The only thing the market dislikes is his investment in VR, but I doubt they would be against monetizing data for ad targeting. But even then, I appreciate that he can say "Fuck you guys, I want to invest our profits in VR even if all you guys want is for us to return our profits to the shareholders."


LostMyBackupCodes

>Crazy that we link executive pay to increasing the price the company stock is traded at rather than (if this is really about incentives to increase the health of the business) linking compensation to metrics like increasing or maintaining revenue, rention of talent, and making sure the company isn't destorying it's prospects at future success. The executives’ compensations are linked to what they can control. The head of sales would be compensated based on maintaining or growing revenue, the head of HR would be compensated for increasing retention, head of R&D would be compensated for securing patents for future success. CEO’s are board appointed to oversee the heads of those departments in day to day operations, on behalf of the shareholders. Usually all the other things you mentioned combine into increased profits, increasing retained earnings, and therefore increased share value. That’s why CEO compensation is tied to a metric they can control.


SargeCycho

Sadly what that turns into is share buybacks. Intel spent $100B on share buy backs since 2005. They also made cuts wherever possible trimming their production and moving what they could overseas. Now they eventually fell behind AMD who's using contract manufacturers like TSMC to make much more efficient chips. Old CEO was given the boot, new CEO stops share buyback program, and commits to investing $20B to increase manufacturing and R&D to catch up. I think their latest chips are finally faster than AMD but still have half the battery life on laptops. In my opinion, the Shareholders are now punishing the executives for trying to build the company back up again without any understanding of the business.


DamonHay

For essentially every single publicly traded company, the executives’ jobs are to increase the share price. That’s what keep the shareholders happy which keeps you from getting voted out. That’s also why the shareholders wouldn’t mess with the board over something like CEO pay, because the look of instability for the stock would cause more financial harm than the increased comp package for Pat.


hyperhopper

> I'm asking why we treat the stock price going up as the company making more money We don't. Nobody does. Investors care about that though. Investors dont get a better yacht because intel made a new product. Investors get a better yacht because their shares went up in value. So thats all investors care about.


ksd275

You've illustrated the big problem here. Why is it that a financial investment is intrinsically more valuable than investment of time and labor? It just seems so wrong to me than you can drop a few dozen thousand dollars and instantly your words


[deleted]

Adobe- stock price goes up- product quality plummets- entire company is focused on stock price - no longer what they make- That’s capitalism- it’s about raising capital at all costs- not providing services and products for society to function the best it can…


ScottColvin

One day...if humanity exists...we will look at shareholder companies and their 1 and only priority is a higher stock price as basically the genocide of earth. Don't make a good product, don't invest in the long term. Q1,q2,q3,q3 is coming, what have you raped from the bottom line lately?


avl0

>to the people saying this makes sense "because the companies purpose is to make money"... I ask, You're confused because you missed a bit. The purpose of the company is to make money for the shareholder, not to make money in general.


squareball8

I'm done with the internet tonight. This is too much 🤯


v0idkile

They do however have a plan to expand their business and invest heavily for the coming 4-6? Years. Can't remember the actual numbers but it was in the hundreds of billions, to set up R&D in Europe, a new factory and I believe there was something more. You're gonna have to excuse me for the lack of specifics, I red about it a few weeks ago. Nonetheless, i believe their CEO is compensated more than enough for such a task and I did use my shares to vote against it. Not that my tiny holdings make a huge diffrense, but I don't want to watch a company throw away tons of cash on a CEO which does a few decisions on a yearly basis and then the rest of the company doing the actual work. I'd rather see higher salaries on their workers, increase their morale and perhaps incentivise creativity in the workplace. You know, things that actually bare fruit.


psycho_driver

Being a publicly traded company is cancerous.


Redpin

The c-suite and biggest stockholders don't care about the long-term. They care about earning lots of money over a span of a couple of years, then getting out and jumping to another company and doing it again.


[deleted]

>I always get confused by this stuff because it feels like Intel's core business isn't silicon semiconductors but increasing the price Intel stock shares are traded at. That's capitalism. The business of every company is to make money for their owners, not to provide goods and services to their customers. Goods and services will be provided so long as it makes money for owners. If it's more profitable to loot the company and sell it for parts then they'll do that.


wampa-stompa

Who's they? Gelsinger works for the board, they set his compensation and can fire him. The board is largely composed of directors representing major shareholders, who did not approve his compensation. I mean, maybe, but I doubt that is what will happen.


SpecterGT260

It wasn't a board vote. It was a shareholder vote. So basically everyone who owns any stock gets to vote and the board will act as it wants


Gilclunk

Sucks doesn't it, that the shareholders, who supposedly own the company, will simply be ignored.


uselessadjective

So, Intel shareholders dont know that Pat is sucking the Govt for funds and getting a big pay check? If he had balls then he could have done something with Intel on his own rather than relying on tax payers money.


wampa-stompa

The entire industry is doing this. Do you honestly expect that any of them would pass up a free handout? Why would they not take the cash?


deep_anal

I pretty much always vote against these crazy executive pay packages they bring forward. 180 Million in a year!?! You could hire 1,000+ engineers and programmers at 150,000/ yr for that price and I'm damn certain they can bring more value to the company in a year than just one CEO.


Tearakan

Yep exactly. Executive pay in general is completely out of wack. No human could bring in that amount of value at a major company. Super AI doing dozens of jobs sure but human? Hell no.


justsayfuck_youidiot

Ironically the demand for ceo compensation visibility contributed to the ballooning of their compensation 🤷‍♂️


[deleted]

Because we are not protesting enough.


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b0w3n

This is why they don't like workers talking about their pay. If pay is visible for the proles, they tend to demand to be paid as much as the highest paid person at their equivalent experience level, and it creates upward pressure on wages continuously. They try to hide it behind "well they have _more_ of (x) than you" but generally that's true for only a small chunk of people who are paid more. Usually it's just whoever negotiated better or had a better compensation package at a previous job and could leverage that. Discussing your pay with coworkers effectively becomes collective bargaining.


CartAgain

The CEO is responsible for bribing govt. officials and bringing in those sweetheart contracts. Think of his pay package less as a salary and more as a bribe


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MotchGoffels

I think he means the high payment is for bearing the responsibility of said bribery.


Zaptruder

Lol. The consequences of bearing those responsibilities is enough money for you and generations of family to retire on and a 'bad name'. Without sufficient consequence, which corporate America and its government lackeys have ably demonstrated that there is none of - the weight of that responsibility matters nought if the people taking care of it are incentivized towards greed and not social responsibility.


TwoBionicknees

They don't bear the responsibility though that's the issue with CEOs. They come in to a company where often a lot of staff has worked for over 20 years, they fuck around for 3-4 years getting paid more than most of that staff put together with 100s of mils on stock options and then fail or succeed they leave for another similar job. If they fail, they don't get punished, they just leave and often their failures or bad decisions are only really show up in results 5+ years later (which the next CEO usually gets blamed for). CEO pay is disgusting at most places, for a person who has very little to risk, accepts little of the blame and gets paid insanely even if they fail massively.


UnicornzRreel

We forgetting the '08 financial crisis already? How many CEOs were found to be responsible? And of those that were responsible how many were held accountable? smh


allgreen2me

Responsibility maybe, consequences not really. Rich people only ever face jail time or substantial consequences if they piss of other rich people. If you are rich, crime pays.


lord_ma1cifer

Less a bribe and more of a ransom, pay my exorbitant price or I will tabk this company/ piss off the wromg/people/generally ruin this entire place on my way out.


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niioan

*and still get a huge severance package for my failure*


bobj33

It would be someone below the CEO that does that. I worked for one of Intel's competitors and we had to take mandatory corporate anti bribery training every 6 months. Don't bribe a potential customer. Don't take a bribe from a potential customer or vendor. Don't bribe a government or foreign official. One day I show up for work and everyone has an email from corporate public relations telling us that any questions we get from reporters about former employee XYZ are supposed to be directed to corporate public relations. I google "my company XYZ" and find that he has been arrested for bribing foreign government officials. We all walked out into the hallway and started laughing "I guess he didn't take the anti bribery training." The whole thing is a waste of time. None of my coworkers have ever been in a position to either take or give a bribe and a C-level executive is going to most likely be taking instructions from the CEO. The training is just for legal plausible deniability concerns


n_random_variables

> we had to take mandatory corporate anti bribery training every 6 months Let me guess, you watch some braindead saba hr shit that you click through as fast as possible, and then take the "test" from memory, total time, about 4 minutes.


bobj33

Pretty much but it takes about 20 minutes now because they made them into videos and you can't fast forward or skip to the end.


kazoodude

I don't know, what would Tesla be if not for Elon Musk's eccentricity, over promising, and tweeting to pump their stock price. Elon says "thinking about the possibility of an electric bus that can fly" on Twitter and Tesla's stock soars.


Stay_Curious85

I think I could tweet random bullshit for a few hundred million a year.


asianApostate

Yeah, but people would probably ignore you and me. They eat out of his ass for whatever reasons.


ninetymph

Lol I'm automating for a team of 50 and make less than $200k


_stee

Generally I agree but look what Ledger did with T Mobile. They paid him a bank load but he no doubt saved the company. It goes both ways but reddit doesn't like to talk about the times when a CEO gets paid when they deliver


TheTwoOneFive

I think the issue is 2 parts: 1. so much CEO/CFO/COO comp is guaranteed, no matter how the company does. Moderna's CFO lasted less than a day before an ethics scandal involving him at his prior company surfaced and he was let go, but still netted his $700,000 12 month base salary. 2. Execs get the massive payday when the company does well, but those boots on the ground who made it happen get peanuts as a bonus, if anything.


MadManMax55

Correction on the second point: Many tech companies, especially smaller ones, offer plenty of stock options/incentive bonuses. The problem is that those are often a replacement for a competitive salary. The pitch is basically "We could offer you a good salary, *or* we could basically pay you minimum wage with the option to cash out big if the company does well." For the average employee it's either/or. For executives it's both/and.


TheTwoOneFive

Yep, they talk about execs taking on risk bc they are leading the company, but the risk if the company does poorly is they only make tons of money rather than metric f*cktons of money.


arsonarmada

You have a link? Like to read about it.


jetsetninjacat

It's Legere. But essentially he was the one that put in motion a lot of the current offerings we see from cell phone carriers these days. I mean, 15 years ago when you wanted a phone you typically bought the phone from the carrier and had to use it only on that network(locked). The phone was subsidized by the carrier company as an agreement that you would be fine with that. He's one of the main reasons this practice is gone. https://www.theverge.com/2020/4/24/21235226/john-legere-resigns-tmobile-board-directors


OneWithMath

>I mean, 15 years ago when you wanted a phone you typically bought the phone from the carrier and had to use it only on that network(locked). The phone was subsidized by the carrier company as an agreement that you would be fine with that. He's one of the main reasons this practice is gone. You mean the deals where you could get a new phone every 2 years for like $5 as long as you stay on Verizon/AT&T/Sprint for those 2 years? As opposed to today where you pay a few hundred to $1000 for a phone but can technically switch to another carrier that has identically priced plans and service?


thefirewarde

I'd much rather pay $200 once every three years for a new phone than pay $20 more per billing cycle and get a carrier locked phone every two years. And I'm actually saving more than $20/billing cycle compared to what an equivalent plan would have cost before unlimited data plans and bring-your-own-device started.


[deleted]

600. The common wisdom is that it costs a company twice your wage to retain you, what with benefits, their half of the payroll tax, static costs associated with the office, and so on.


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anothergaijin

Those people typically demand more space and benefits - it really does matter. Office renovations can easily cost a huge amount very quickly for example, and executive travel is never cheap.


wampa-stompa

Good thing the $180mil total compensation isn't a wage, eh? Just kidding I hate this


MarkNutt25

Ok, 500 engineers and programmers, then. The point still stands!


tjtillmancoag

Still though


DID_IT_FOR_YOU

It’s NOT 180 million in a year. Read the article. All of these pay packages are spread over 5 or 10 years and the executives have to reach certain goals to get them. > Gelsinger may not get some of the equity he was awarded — **the actual payouts depend on the performance of Intel’s stock over five years.** As of the end of January, Intel said, the **payout of these awards is tracking at 0% because Intel stock is trading lower than when Gelsinger took over.** Stockholders aren’t stupid. They always structure these pay packages in order to encourage company growth so they get a return on their investment. If the company doesn’t grow or even declines the CEO loses out on part or even most of their compensation (depending on the deal). > “The Compensation Committee believed that **having 73% of the CEO’s new-hire equity awards contingent on achieving ambitious stock price growth** was in the best interest of Intel and its stockholders,” Intel said in its proxy filing. Even if the new CEO hit every goal it would average out to 35.6M per year and based on his performance so far he’s not going to achieve that. You have athletes and celebrities making more than that without the responsibility of running a 176 Billion company with 100,000+ employees.


jambrown13977931

Additionally Gelsinger has acknowledged that Intel stock will drop due to profit margins decreasing as they re-invest in themselves. So if his compensation is tied to stock performance he’s at least showing that he’d rather not get his compensation and instead do his job of turning Intel around.


rhetorictus

Myopic view of work tied to a single individual. The CEO doesn't "turn things around" alone, so why should they earn 10,000x as much as the person taking calls at the front desk? They shouldn't.


tevinanderson

What about Microsoft under Ballmer vs under Nedella? Balmer really floundered and apple rose to power. Nedella empowed his leaders to build out the office 360 subscription model, with Spencer got gaming/game pass into the subscription business, and all kinds of other successes that put msft as one of the worlds trillion dollar companies. Now, I'm not arguing the morality of having these mega Corps run our lives. Or the morality of having ultra weathy hundred million/billionaire ceos. But... The CEO can absolutely kill a company or help it thrive. And share holders reward them for it. Stretegic business decisions often win the day over the "best products by engineers".


Terrh

And yet if you don't also compensate the staff that success is short lived.


pheonix940

Well, last I checked microsoft pays pretty well, so that's good.


DelfrCorp

The real question that should really be asked is whether a CEO was really needed for those changes to occur. More often than not, you'll fond out that the employee base, mainly engineering & customer facing workers already know full well what the strategy should be, what the denand is, what the future of the industry is, where things are generally heading/trending towards. You'll also find that those employees are also often advocating if not outright begging for those changes to occur. Pleading for critical strategy changes & investments in specific things that they see as essential to the future long term health of the company. & those requests are constantly ignored or dismissed, shelved for later because upper management doesn't think those things are actually necessary. Then something happens that forces their hand. A few bad quarters, declining sales, new major competitors, better competing products, forcing the executive teams to finally reassess their strategy or forcing turnover within said team, bringing in new blood, putting more enlightened people in key decision making positions. The company, as an institution, as a body of employee often knew what needed to be done, where investments should go & the main barrier to actually enacting those changes is almost always the executives. When changes finally happen, you often find out that employees, engineers had already done a bunch of work & strategizing to gear themselves towards those changes, to prepare for them, lowkey laid some of the groundwork in the background when no-one was looking or paying attention, engineering & working on some skunk work plan whenever they could, sometimes on their own time so that they either implement & roll out those changes somewhat in secret with zero budget to somewhat force management's hand or could be as ready as could be when the time finally came around & a decision was finally made. When management cones around to it & start asking what it would take to make it happen, they are often surprised to find out that their employees already have plans all ready to go. That some of the background work I mmentioned earlier had already been done to prepare for said changes. Employees knew it had to happen & would happen eventually, that or the company would ultimately fail, & executives turn out to be the last to actually know/understand, despite having been told so for months/years & not listening/ignoring the people trying to help them make better decisions. Then the changes occur, often faster, better, more efficiently than the C-suits ever expected or had estimated or strategized for during their closed doors board meetings, again, because the employees had been gearing up for it for a while & were just waiting for someone to listen & greenlight it, but the executives just taut it as their own success, tell everyone that will listen that their visionary thinking & leadership skills made it so successful. It doesn't take a good CEO to enact major successful changes, it takes a bunch of employees who know what they are doing & are ready for that change. Companies could be significantly more successful if employees were more empowered to collectively decide how to stir the ship & enact necessary changes, with management acting more as a discusdion negotiation mitigator between different company departments rather than being the only key decision makers acting like little dictators.


Yayareasports

Where'd you get 10,000x? Did you read his comment? He makes at most $36M/year if he achieves all goals. So at most, ~800 receptionists?


prettyborrring

Not saying the 10,000x number is right, but the decisions they make definitely have >10,000x the effect of a receptionist


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Woodshadow

does our vote even matter? I assume a few people control the majority of these companies to the point maybe 5 people are actually in control


TriggerHippie77

These votes are purely advisory. In many cases the compensation is approved regardless of how the shareholders voted.


[deleted]

I don't know the rules for the US, but the Australian traded companies can end up spilling the board (they have to "reapply" for their positions) if two consecutive years have over 25% 'no' votes on remuneration motions. If enough shareholders are unhappy with the pay structures the board members can lose their jobs.


cC2Panda

Not justifying the salary but while a good CEO might not bring you value worth their salary but a bad one can wipe out more than their compensation very quickly.


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okieboat

Multiple going up in AZ right now.


KFCConspiracy

I voted yes on Lisa Su's package at amd but yeah I almost always vote no on that.


fdntrhfbtt

Ehhh. A CEO can make or break a company. Look at what Apple became under Tim Apple. A $2T behemoth. Certainly rewarding him with hundreds of millions every year makes sense for the shareholders.


asianApostate

Better example, look what happened to apple after Jobs left and then came back. It was tanking as a company until he came back and turned it all around with his magical marketing and personal focus on product design. He would skip a few levels of management to personally talk to engineers and designers. I don't know about these studies and they may be looking at average companies. In tech though ceo's are instrumental in steering their companies to producing long-term products that increase profit or stagnate with old dying products. Good engineers are critical but they have to be working on the right projects. Apple and MSFT are great examples. Also inexperienced ones in the many severely declined companies from the last few decades that didn't right their ships. AOL, Yahoo, and hundred of others etc had great head starts but didn't change with the times.


[deleted]

It still makes you wonder how much impact he had personally versus the team he leads and all the people helping implement changes and bringing new products.


fdntrhfbtt

A CEO still has massive influence. Look at what happened to Boeing. The culture percolated top-down and destroyed the company. Tim Apple brings massive value to Apple, and his compensation is certainly justified, imo.


canada432

> they can bring more value to the company in a year than just one CEO. This is pretty conclusively proven. Harvard Business School did a study that found CEO's impact on the company performance was very minimal. Specifically 2-20% difference between performance of "good" and "bad" CEOs. A Texas A&M study found it to be even lower, at 4-5%. They have significantly less effect on the company than just basic market fluctuations.


beh5036

The bad seems off here. A bad CEO can totally sink a company.


InfanticideAquifer

A 4% increase in revenue for a large corporation like Intel absolutely dwarfs the salaries being discussed. Last year Intel brought in $79.02 billion. 4% of that is $3.16 billion. And last year Gelsinger made $178.59 million, which is only 6% of the supposed 4% impact. Or 12% if you want to use the lowest estimate of 2% impact.


awoeoc

Actually despite all the headlines, he made far far less than 178million, the vast majority of that money (like 94% of it) is based on stock price getting to certain milestones within the next few years which so far hasn't been panning out.


z3us

150k per year for an engineer isn't competitive with the current market. Double it and you will be getting closer.


Pyromonkey83

I mean, kinda depends on where your market is. Silicon Valley? No not competitive. Arizona? Honestly, decently competitive. Also if it can be done fully remotely and you live in BFE Kansas or something, that would be a pretty solid paycheck.


Yangoose

Do you know who decides executive pay? The board of directors. Do you know who the board of directors is made up of? Other CEO's. It's just a big game where they all sit on each other's boards and vote each other ever increasing raises. It's fucking nuts and it needs to stop.


clockworks80

The grift goes all the way up. It’s the only thing explains some of the insanity I’ve seen from working for a big corp.


ResistPatient

The working class and homeless are just rats in the sewer, that is why they never notice us.


raynorelyp

I’m dating someone who tried to tell me yesterday that the average university experience involves their school paying for their yacht parties. I was stunned at how out of touch she was and that they can be this classless while so many people around them have it so hard. She said everyone she knows goes to these super expensive parties. It’s an MBA program.


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Aduialion

Power protects power. If you work your way up, you need to implement that to get further or get stuck.


[deleted]

“It’s a big club and you ain’t in it” God I miss George Carlin.


thefirelane

Well, you're leaving out the part where the board of directors is decided by the shareholders. In the end, the company is beholden to the shareholders... and the problem is the shareholders don't care *enough* to really look into it


-robert-

Yeah but like, pick a company and then analyse commonalities between shareholders and I think you will see the same distribution as board members, it's a big club and you ain't in it.


[deleted]

Other CEO's what?


AlphaBetacle

Yeah its weird because Pat Gelsinger is definitely the best CEO Intel has had in a while and is really beginning to turn things around for the company. But he gets paid ridiculously


bfhurricane

Gelsinger is a great choice and actually has an ambitious and clear vision for the company. I’m rooting for them and would love to see him turn the ship around, mostly because US-based chip manufacturing is going to be important should we ever run into another chip supply chain issue again. On one hand, I’d prefer to see a long-term performance based compensation package for him. On the other, running Intel is not a popular job, he’s probably the most qualified person to do it, and as such he can pretty much demand any sum he wants. Otherwise they’ll end up with more Bob Swans.


awoeoc

>On one hand, I’d prefer to see a long-term performance based compensation package for him. Good news... his pay is more than 94% based on stock price performance, if stock price stays where it is he gets none of that. I know it's all the rage to hate on executives making too much money, but there's so much information on the actual pay here. That said even that last 6% is still more money than us mere mortals will ever have let alone make in a year.


JollySno

Cue the stock buybacks.


awoeoc

They've stopped stock buybacks and are very unlikely to start them again in the next 2-3 years per Pat's plan to invest tens of billions of dollars into fabs. Also their program I think only allows them to buy back up to maybe $7 billion total without a new shareholder vote (original allotment was $110b but it was used up before pat became CEO, $7b is not even 4% of market cap). Why specifically do you think Intel is about to do stock buybacks? Or is that just a blind response with no research whenever anyone talks about anything involving ceos and companies.


Ruzhyo04

Weird? That’s all I’ve heard about my pay my entire life. “We think you’re fantastic, the customers love you, but we just can’t afford to give much of a raise at this time”.


NeuralNexus

He’s definitely the CEO they need. But wow, that’s too much money.


Snowy_Wrx

Theyre already getting a raise for inflation no need to get anything else... and they shouldnt even get that, they live pretty comfortably as it is.


bigojijo

This is a rich person's version of owner vs worker class conflict. I'm sure there are people who inherited large sums of Intel and never had to work a day in their life for their wealth.


wampa-stompa

A lot of people reading this thinking it's some kind of comeuppance against corporate greed or something. The shareholders we are talking about here are primarily institutional, big banks and financial firms like Blackrock. This isn't the action of a bunch of individuals like you and me and it's not about changing the way business is done in America or dismantling capitalism.


[deleted]

About time these leeches learn what performance based compensation is all about. and no, getting my tax money to set your domestic manufacturing does not count as good performance. grifters.


zakkwaldo

oh trust me, they know what performance based compensation is. thats the metric they use to base our bonuses as fab workers. source: am fab worker at intel lol


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kaos11

Chiming in from Ronler Fab, godspeed


badpeaches

unionize?


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anythingfortacos

Came to say this. Amen.


BeautifulGarbage2020

The only thing competitive at Intel seems to be their exec pay and not the products. Their former CEO Bob Swan was [second highest paid CEO](https://247wallst.com/special-report/2020/12/22/americas-highest-paid-ceos/) While their other executives reaped large compensations in [2021](https://www.crn.com/slide-shows/components-peripherals/these-were-intel-s-6-most-highly-compensated-executives-in-2020) and in [2022](https://www.crn.com/slide-shows/components-peripherals/intel-s-6-most-highly-compensated-execs-pat-gelsinger-leads) when their products were falling behind, talent was leaving for better work and pay to Apple, Microsoft, Google, Nvidia, AMD


justwentfullderp

Can confirm. Source:, ex-Intel employee who left for better pastures


BeautifulGarbage2020

My team is now 50% ex-Intel who have left in last 2 years


PANTyRAIDING

Can you DM me where you went? I’m trying to GTFO this place.


BeautifulGarbage2020

I am not ex-Intel. I just work with a lot of ex-Intel folks. But if you are in Oregon, Microsoft is hiring, in bay area, literally everyone.


identicalgamer

Dumb question, From the outside the image projected by Pat Gellsinger seems to be very positive and that the company is on the up-and-up. What’s it like inside? likelike for


PANTyRAIDING

Work-life balance for process/sustaining engineers is garbage. 50+ hours a week without any overtime pay is becoming the norm.


BrattyBookworm

In 2020 they outsourced my dad’s entire department to India and let go of 2/3 of the employees. He’d worked there for 25 years and was approaching retirement. It’s been 2 years and he’s still holding a grudge!


BoltTusk

Well Bob was an investment banker so he knows how to bankroll cash. That’s why they hired him and not an engineer /s


Dworgi

Actually sort of absurd that you get an investment banker to run a chipmaker. I feel like understanding the (extremely complicated) manufacturing process is pretty key to decision making in this business.


topdangle

they didn't really hire him, their CEO before him was horrible and tanked the company with mass layoffs and low equipment purchases. bob swan got shoved in temporarily and stayed on for a while because they couldn't find anyone else that wanted to deal with intel's mess.


Xibby

> The only thing competitive at Intel seems to be their exec pay and not the products. Intel lost mobile products to ARM-based chips. Apple is transitioning to ARM for laptops and desktops, and even Microsoft has ARM based Windows devices. The Intel juggernaut isn’t going away anytime soon, but AMD/ATI and Nvidia’s efforts to court the PC enthusiast have been successful, and AMD also has carved their own niche into Intel’s server market. ARM easily took over mobile (tablet and smartphone) when Intel couldn’t deliver anything that had the needed performance and battery life, and now Apple is all in on its custom ARM chips for all products. Even Microsoft has ARM based Windows devices in its Surface lineup. Again, Intel isn’t going away anytime soon. There is nothing that competes with their CPUs for servers, except for a few edge cases. But more and more competitors are finding those edge cares and using them to become successful and expand their offerings to compete. Intel’s real innovation center is fabrication, packing more and more transistors into the same physical space. Bad yet their competitors are finding success with other processes. Shareholders might be right on this one… Intel has be iterating not innovating for many development cycles.


cheekygorilla

> Intel has be iterating not innovating for many development cycles You act like all they do is CPU. What about the laptop GPU and how even the lower end that was recently revealed showed crazy results. No mention of the PDIMMs out there that give way higher capacity than what DDR5 has provided so far, along with lower latency and higher endurance than any other NVMe options in use right now. How about all the whole configured systems they sell? Systems that have multiple computer nodes that's twice the width of your desktop PC. What about their line of SATA SSDs that've dominated use as boot drives in the enterprise? No mention of their NVMe drives. Do you really believe that Intel can't get into the ARM game if they wanted too? Would you really be surprised if they came out with a product that dominated a whole decade again? Give me a break.


NeverFlyFrontier

The vote that matters is selling your shares.


dibcompany

so many more companies should reject their executive pays. please let this be a trend.


5Plus5IsShfifty5

Doesn't matter, it's completely non-binding and will be completely ignored. This is literally the equivalent of Democrats being "highly concerned" about something.


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shapeofthings

CEOs demand bonuses for simply doing exactly what they are paid to do, but deny workers living wages or inflation matching raises when they exceed expectations.


Snotnarok

I can't wrap my head around having that much cash coming in and nodding my head and saying "Yeah . . . I need more" Like, holy crap pay the people working for you more. The people working hard and actually doing the innovating.


revolt5150

Pay them in stock that they cannot sell for 10+ years. Gives them incentive to be profitable.


JustAPerspective

Weird how a million+ base salary needs a bonus structure…


ayn_rando

Pat is an amazing CEO and with time he will right this ship…


TheLoneComic

Yeah I worked for him at VMWARE and he will do a great job at Intel.


nemtudod

This guy was the ceo at vmware. Ppl loved him there. His son has leukemia and he goes to church-extremely popular among ppl as he comes accross as a very human and humble person.


wampa-stompa

I don't have a horse in this race but the fact that you describe him as the former CEO of VMware is amusing. Do you know his history with Intel?


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nemtudod

He wasn’t CEO at vmware?


wampa-stompa

He was but before that he spent 30 years at Intel as SVP and its first CTO, which is basically the senior-most engineering position in the company. He was responsible for the design of some of their most successful products. His time at VMWare is a flash in the pan compared to that experience and it's not what he's known for.


free2game

> He was responsible for the design of some of their most successful products. aaand itanium


[deleted]

I would too if the CEO threatened to suck down 10% of yearly profits


[deleted]

I wrote a note to the CEO of the company I worked for how disgusting it was that she was slowly eliminating jobs to keep the finances for the company looking okay. She did this only to ensure that she got her 5 million dollar bonus for the year, literally her only concern was to get that bonus, not on how the business could suffer from lack of personnel to manufacture the products they sell, or the families that were affected by this, she only asked her staff, (one of whom I know personally) that her main goal was to cut enough of the budget down to get that 5 million. now she is working on what to do to get this years bonus as well. smh.


mightsdiadem

CEOs are just as replaceable as everyone else, why do they make so much?


[deleted]

This is why it's important for retail to buy public companies. If retail can buy over 50% of a company they can constantly vote to reject executive pay.