I have permission from Mr. Welsh to repost any of his material, after a few days have passed since the original posting.
Rentiers vs. Capitalists, Yahoo CEO Edition, by Ian Welsh
We tend to think of rentiers as being property owners, but a rentier is anyone who uses control of position to extract monopoly profits. CEOs appoint boards, boards determine CEO compensation, and corporations can pay obscene amounts of money, even when they aren’t making a profit. Heck, even if they’re being taken over.
Corporate America prides itself on rewarding success and punishing failure. Yahoo CEO Marissa Mayer does not fit comfortably into that narrative. During her five-year tenure at the once-proud tech firm, user levels stagnated, ad revenue dropped, acquisitions cratered, layoffs accelerated, product quality floundered, and hackers stole the personal information of more than one billion users.
But when Yahoo’s sale to Verizon becomes official in June, with the restructured company renamed Oath, Mayer will walk away with $186 million, according to a regulatory filing released this week. That includes shares of Yahoo stock Mayer owned, stock options, and a $23 million “golden parachute” of cash, restricted stock units, and medical benefits. Mayer did relinquish $14 million while taking responsibility for the Yahoo Mail data breach, but she’ll get 13 times that amount just to no longer remain part of the company.
I should point out that the first part “priding itself on rewarding success and punishing failure” is pure bullshit when it comes to executives and CEOs, pure mythology. Ordinary workers may (sort of) live in that world, though they get little reward for success, but high ranking executives are compensated irregardless of how their companies are doing. The worst performing CEOs get higher compensation.
If you want to be well paid as a CEO, perform like shit. Science backs it up!
This is not capitalism. This is rentierism. The value of all the loans taken by public corporations in the 2000 run up to the 2008 crash was equal to the stock buybacks made by public corporations.
Why? Because most executive compensation is thru stock options!
It’s good to be the Queen/Duke. Ahhhhh… what a life.
And this, folks, is why you don’t have good things, because these people run your society and make most of the important decisions. To say that they are parasites is to be generous, many parasites shade towards symbiosis, these people make the economy and their companies perform worse than if they did not exist. Restrict compensation to to 7 times median, fire everyone who earns more and promote those below them and I guarantee that in 10 years the economy would be much better.
You can have lots of really rich people or a good economy; you can have lots of rich people or a democracy.
Those are the choices.
I have permission from Mr. Welsh to repost any of his material, after a few days have passed since the original posting.