undefined | Better HN

0 pointsTeMPOraL6y ago0 comments

There is no competitive pressure within a company. CEO pay is usually an insignificant fraction of a company's revenue; there's enough inefficiencies both within the system and within the market to allow this to exist, even if the actual product of a company is a commodity.

The other part of my comment also mentioned that companies do everything they can to avoid being commoditized: that's another source of inefficiency/surplus revenue. The market is in flux; commoditizing takes time.

0 comments

bawana6y ago

"CEO pay is usually an insignificant fraction of a company's revenue" What is insignificant? For example, the CEO of Aetna walked away with 500million. That's money that should have gone to insured, injured and sick people. What risk did he take that exceeded the risks of the children we sent to Afghanistan and Iraq?

TeMPOraLOP6y ago

Well, according to [0], Aetna's revenue in Q3 2018 was $15.5 billion - so, extrapolating, their yearly revenue was something on the order of 60 billion dollars, of which that 500 million you mention is just 0.8%. Also, some of that $500M is in stock, not cash.

https://www.modernhealthcare.com/article/20181030/NEWS/18103...

grecy6y ago

> that 500 million you mention is just 0.8%.

It's not about what percentage of their revenue it is, it's about how that money that should go to adding customer value, not making exceedingly rich people richer.

500 million dollars could change the lives of tens of thousands of people that Aetna calls customers... but instead it goes to ONE person.

It doesn't have to be that way.

changchuming6y ago

It also says that the net income is 1 billion though, and 500 million is half of that. High revenue doesn't always mean that the company is generating that much value. Just look at Uber.

j / k navigate · click thread line to collapse