I still believe capping executive pay is a necessary (though not sufficient) part of any practical solution. At least for publicly traded companies, we must cap compensation at no more than 50x minimum wage or something. No, executive compensation does not "come from a different pot" or any such nonsense. Don't listen to such silly arguments. Literally no shareholder wants to pay executives more unless they are executives at a different company where their buddies are on the board.
Some HN readers apparently don't like to hear this but I don't see any other way.
As for how we can reduce regulatory capture, I don't believe there is any good solution other than constant vigilance.
- Personal liability for making false or misleading statements to a regulatory agent
- Corporate death penalty. No more "too big to fail" nonsense. If there were actual competition among aviation manufacturers, the government could just dissolve the company and auction off the product lines to competitors.
Safeguarding against capture from the regulatory side is more difficult. But I guess term limits for decision-making positions could help, or having a good process for identifying and declaring conflicts of interest?
Not only would such a corporate death penalty never, ever get used against Boeing by the USG if such a thing were to exist, the USG would not advance such a circumstance where it could exist in the first place.
There are a number of industries and companies that will exist as long as the current USG does, at least for our lifetimes, due to decisions that were made long ago.
Examples include Lockheed, Boeing, and Microsoft.
Any solution to the problem needs to accept and address the levels of deep integration between these companies and the state.
The first step could be forcing Boeing to spin out McDonnell Douglas again. The real issue is there are 0 alternatives to Boeing right now for US based design for the DoD.
Having more than one supplier is unnecessary complexity, insofar as there is no competition or market forces at work anyway, nor will there be any permitted by the participants.
It'd require a lot more ass-covering to pretend that the company isn't just an arm of the government, entitled to a neverending stream of practically unlimited tax dollars.
Look at the whole kerfuffle that Amazon is making over JEDI being given to Microsoft. Under the current system, that's probably better avoided.
> I still believe capping executive pay is a necessary (though not sufficient) part of any practical solution. At least for publicly traded companies, we must cap compensation at no more than 50x minimum wage or something.
I am not sure what capping executive salaries would achieve. You'd still get the same kind of people at the top anyway - even if the top salaries were identical to that of a janitor, the fact that you have power over others is its own motivator for many people out there. Proof in point: politicians don't make outrageous amounts of money (compared to CEOs), but they are addicted to power and control just as well.
The goal is to increase minimum wage to fifteen dollars an hour which will allow USD 1.5M annual compensation (15 * 2000 * 50)
I think a fifty times multiplier is already too high though so I don't know if I can agree to pushing that up any further. The goal is specifically to change things for the better, to NOT maintain the status quo.
Do you not think executive pay in the aggregate directly correlates to the value they provide to the company? Clearly not in terms of their individual labor, but the value of the unique guidance and leadership they provide. Of course there are plenty of examples of executives being paid too much, but those companies are providing opportunities for competitors with more appropriate pay structure to undercut them. In the long term, in a free market this should only be an issue with monopolies which are already regulated.
>The idea is that risk taking that jeopardizes lives has been encouraged but outsized rewards
That doesn't make much sense though. The size of rewards might incentivize how hard someone works for them and to what extremes, but the objective they're working towards depends on what the reward is, well, rewarding, which is a separate thing. It's perfectly possible to imagine a system where executive compensation was based purely around safety for example, say "$5 million for no flaw-derived fatalities during tenure of 10 years and another $5 million for no flaw-derived fatalities for anything manufactured during tenure for 10 years after retirement", or whatever exact numbers/details you wish. Of course, even that could be "outsized" in that too high+unbalanced a level might encourage the extreme of too little innovation. But merely saying "executives shouldn't get paid more than [number pulled out a random because who knows]" doesn't seem like a directed policy that'd help. And in fact is quite contrary to other comments calling for more personal responsibility and the like.
It's a perverse incentive; rather than acting for shareholders or the community the scale of CEO reward encourages action to preserve the reward. The scale of CEO pay demands that the only objective is to remain in post. I have actually witnessed this - executives sacrificing their friendship, relationships to children, business performance and health in order to cling on and get a £3m bonus.
I think you’ll just get less competent people with the same levels of greed. I’d see involving more skin in the game as the solution, not decreasing the rewards.
>I’d see involving more skin in the game as the solution
like holding family members hostage? Or perhaps violent mutilation on failure? The financial route has been ramped up as far as can be imagined - $100m's are paid to CEOs to fail, and to wreak the economy, society and the planet at the same time.
Some HN readers apparently don't like to hear this but I don't see any other way.
As for how we can reduce regulatory capture, I don't believe there is any good solution other than constant vigilance.