Members of Disney family release film critical of Disney company

I tend to be pretty liberal on social issues, but I still think that making a case for inequality by comparing a CEO to an entry level job is absurd. Being responsible for $67 billion in revenue is not the same as selling churros. People also need to understand that most of this comp is in the form of stock, which depending on the structure of the company might be banked from repurchases or the IPO, or might be issued at the time of the grant. It's not coming straight out of cash. It's also subject to insider trading rules.

The question to me is whether a "good" CEO actually brings that much value to the company. Making lots of important decisions is obviously worth a lot of money if there's evidence that higher paid CEO's lead to better performance. But there's are a lot of CEO's getting paid tens of millions of dollars who run companies into the ground...and then float on their golden parachute to some other multimillion dollar gig. I have to believe there's some group think going on there. Not to mention the fact that a lot of boards are populated by former executives.

The "value of work" conversation is a bottomless pit. Hard to have a conversation about CEOs unless you start talking about professional athletes, celebrities, ...and let's not forget "influencers" who are apparently making money. I saw quite a few of the later at Disney a couple of weekends ago and realized there is a whole new (maybe not so new) industry that I was unaware of.

Right, if "influencer" is now an occupation...

Wealth inequality is certainly a real problem, and history shows it literally ends empires. It's going to get worse as automation makes it so there are less jobs. I get all of this. But making some argument where you just pay executives less and front line people more and all is right is to over simplify things. It's especially true with stock based compensation, because you couldn't just issue stock to a hundred thousand people without diluting the investors. And we've done the math dividing cash, because it wouldn't make much of a dent.

Again, Disney kept a lot of hourly people on the payroll during the pandemic for a while, and most companies didn't.

It isn't fair to compare a CEO to the guy selling churros as the guy selling churros actually works for a living.

Riiight. Because a CEO of a major corporation doesn't have to make decisions that could potentially impact the livelihood of tens of thousands, the retirement of hundreds of thousands and the portfolios of millions.

The guy selling the churros and the CEO have jobs that require two completely different sets of skills and just because the guy selling the churros isn't making enough doesn't mean the CEO shouldn't be making more than him. We can question how big the gap ought to be but obviously there has to be a gap.

To follow up on my earlier comment (because I've been thinking about things) it's my understanding that hedge fund managers statistically don't do much better than indexes. They get lucky two or three or four times early on, people think they have some secret or gift and load them up with money and then they do "okay" with occasional successes with occasional failures for the rest of their career while charging/earning millions of dollars in fees. Given the number of hedge fund managers, even if they're just flipping coins, one of them is going to look like a genius every now and then.

Are CEO's that different?

Here's a thought: what does complaining about CEOs getting paid "too much" accomplish? I make what I make, and raises and bonuses have come based on my experience, effort and work ethic, not based on giving a damn that other people make more. Simplistically speaking, I think that's one of the basic differences between the collectivist and individualist mindsets. If I were to blame others for my limited success (or my failures even, taking it beyond just discussion of salary), it reeks of victim mentality instead of accepting personal responsibility. CEOs making millions (or anyone making more money than I do, for that matter) don't prevent me from making more money. And why would I care if someone else is making more anyway? Who am I to say whether or not they deserve it? I mean, seriously...why should I give a **** what Bezos, or Musk, or Chapek makes?

I can vote for leaders who will tax the heck out of them, for one. Also, I am a shareholder (who never actually votes) in a lot of these companies as well. And also, social pressure is a real thing. Whether it's performative or sincere, stuff like Splash Mountain changing theme is due to a shift in societal tide. I'm sure lots of people said, "Why complain about a private company theming a ride for willing, paying customers?"

Why do I care? Because my neighbors (literal and figurative) are working three jobs, cramming two families into a tiny apartment, and are a missed paycheck away from being homeless (Bay Area).

I care about income disparity, what other people make, because I'm not a sociopath. CEOs being good at exploiting workers and capitalism shouldn't make them worth exponentially more than the Workers who make your work even possible.

No one makes too little because a CEO makes too much. No one. Nowhere. The two aren't even related beyond discussions of income equality.

This is probably a different thing, but CEO's definitely get bonuses for "saving money" which often boils down to getting more work for less money from low level employees.

ApolloAndy said:

my neighbors (literal and figurative) are working three jobs, cramming two families into a tiny apartment, and are a missed paycheck away from being homeless (Bay Area).

Because CEOs make a lot?

ApolloAndy said:

...hedge fund managers... Are CEO's that different?

Yes. That's a terrible strawman comparison. You aren't wrong about hedge fund managers, in part because they literally have to predict the future and consider all of the inputs to global macroeconomics, which let's be honest, isn't possible. Most CEO's have no such obligations. They're responsible for one company, its employees and investors. Keeping it contextual, do you really think Iger won as big as he did because he got lucky?

I'll tell you why the financial inequality thing doesn't gain traction: because far too many people view it as a zero-sum game where you have the rich villains on one side who are evil and exploitive, and the other side is the exploited victims. That's not even remotely the reality of the situation. In Andy's example, if a family is working three jobs and struggling to make ends meet in the Bay Area, first step is get out of the ****ing Bay Area, not blame Bob Iger. You know why I don't live in Seattle anymore? Because I couldn't afford to buy a house even on a tech salary.

And here's the thing, I generally acknowledge the bigger problems. Yes, taxation of the wealthy is broken and unfair. Yes, minimum wages in certain parts of the country aren't high enough to sustain someone above poverty. Yes, systemic racism and misogyny is a huge part of the inequality problem. The cause of these problems are not the existence of rich people, and I can assure you that their intent is not to keep everyone else down to lift them up.

The failure of capitalism won't be because of good versus evil, it'll be because there won't be enough work to do when machines can do most of it. We're already headed in that direction. It won't be the fault of CEO's either. So with that in mind, yes, the idea of something like universal basic income is something that we'll have to explore, and yes, it will challenge us even more with regard to class and status.

I'm generally kind of "meh" on this issue and I don't have a huge stake either way. But in the interest of fostering discussion and taking the position that I'd choose if forced to choose one, let me clarify a bit.

It is obvious that the math for taking a CEO's pay and dividing it up between front line workers doesn't work out. But CEO's get rewarded with millions of dollars for finding ways to get more for less out of those front line workers. The issue isn't the numbers, but the values. As a broad overgeneralization, companies do not place any value in treating front line workers as human beings, but as black boxes where you can turn some amount of pay (the less the better) into some amount of productivity (the more the better). And yet, when it comes to CEO's, the approach is "Who cares about how good a job you do? Here's $10M!"

I think the labor shortage is an indication of this.

Now, I can already hear you asking "Why do you care about the values of a private corporation and it's willing employees?" Corporations are a large (and getting larger) part of the broad landscape of society. I think they have an obligation to (and should be compelled to e.g. minimum wage) express the values of the society in which they operate.

Edited to add: I wonder how much of the CEO backlash and particularly the "rich=evil" backlash is a result of Reaganomics and the continued advocacy for the (IMO, proven failure of) trickle down. Philosophically, there is some argument being made that money should be taken from the middle class and given to the rich (in tax breaks, etc.) because it's "better for everyone," so there is some zero-sum argument being made. Or at least the "rising tide" argument being made actually lowered all the tides and only lifted a handful of boats and now the argument has switched to "CEO value" to continue to lift those boats while the tide continues to fall.

Also edited to add: Most folks I know don't want to move out of the Bay Area because of family or because they don't have any roots (community, church, friends, civic organizations, etc.) anywhere else. And lots and lots and lots of people do move out of the Bay Area because housing sucks so much. The point is that there should not exist (I know, "should" is kind of a stupid word) a place where working three jobs and living multiple families to a house is still one missed paycheck away from homelessness. But maybe that's a different question.

Y'all should read Life 3.0. Lots of great discussion in there about automation, loss of jobs, how to support a society through tremendous wealth generation brought about by automation, how to have self-worth without work, etc.

Jeff said:

Do you really think Iger won as big as he did because he got lucky?

I honestly have no idea. Because for every Iger there's five CEO's that ran their companies into the ground. And it's not even clear that if Iger took their jobs he'd do well in their sectors. Nor is it clear that if he stayed on he'd be able to continue the performance through the pandemic and changing times and expectations. A few good (completely underselling...obviously made billions for the company) decisions at the right time does not necessarily indicate that his next decision will be worth $60M or whatever they were paying him. So, I don't know what to call that.