There are talks of "late stage capitalism" all over the place - I think CEO compensation is one of the biggest hallmarks of it. Capitalism is supposed to naturally reward value creation to incentivize further value creation - somehow we've found ourselves in a situation where folks on the bottom of the pyramid aren't going to get incentivized for efficient labour no matter how much value they create - while folks at the top will be gloriously celebrated for even the most abject failures.
Most people are doing their best to be productive and most of their managers are trying to reward these efforts with recognition beyond a "thanks" but it becomes more difficult to do when we have an insane wealth sink at the top of our economy.
My own theory is that executive compensation serves a purpose that generally isn't said out loud. Usually compensation comes mostly in the form of stock, and the real reason for the large amounts is to reassure investors that if the executive finds him or herself in a situation where they have to make a choice between what's good for employees or what's good for shareholders, they'll be strongly incentivized to choose the latter.
It follows that if a CEO were to refuse stock compensation they'd be at risk of being fired by the board of directors, because owning stock is an unspoken qualification for the job.
Vlad created an app and created value for lots of people. People chose to give him money in the form of investment for his company. I’d say plenty of people are motivated to become founders and create value. Most people just aren’t good at it or prefer a comfy and safe life. Nothing wrong with that either but don’t expect the same payout as someone who worked harder than you.
This really just seems like more a comment on how you relatively value networking compared to skills acquisition. Being a technical worker instead of a manager isn't a flaw - I am happy to continue delivering technical product to my company and I definitely deliver significant value.
I don't disagree that starting a company comes with risks and a personal investment that warrants increased compensation - but right now CEOs in the US make an average of 670x their employees... that is extreme.
I think the modern world has come to view low level employees as replaceable and thus the compensation is more focused on market pricing instead of individual value creation - but with CEOs that 670x is usually justified with how important the decisions they are making are but founders and CEOs are just as replaceable as anyone else.
There are different types of CEO’s: founders and non-founders. Founders make their money when their product gets used by millions of people. Is that worth 670x? Ultimately it’s worth whatever people will pay for it, so when you judge a founder you’re really judging the millions of people who parted with their money. I’d argue those millions of people are more “correct” than deciding an arbitrary number like 670x is too high.
The other type of CEO is one who joins after founding. Their compensation depends on providing tangible measurable growth for the company. Driving 5% additional revenue for a company like google is worth billions, so their pay is considerate with the value they provide. It’s been shown in research that a good CEO can make or break a company.
You say you deliver tons of value but you don’t explain why your pay is high as a technical worker. It’s high because the market is tight and there aren’t enough skilled technical workers. There’s plenty of other industries like biotech where they deliver significant value but don’t get paid as much as software. Same goes for CEO’s it’s an important position and there aren’t that many people that can do the job.
Ehhhh.. Economic rents and scarcity of talent with solid networks still apply to execs as much as pro sports.
You don't buy an exec because they are brilliant or hard working, you buy them for their network and how much they can grow the the business relative to compensation. At least in theory.
Most people are doing their best to be productive and most of their managers are trying to reward these efforts with recognition beyond a "thanks" but it becomes more difficult to do when we have an insane wealth sink at the top of our economy.