Workers ultimately have a job because they are useful to management, and management have a job because they are useful to ownership. Top management has insane levels of compensation as a strategy by ownership to alight management's interests with their own, by turning them into owners. If there is going to be a management layer at all, for example the proposed "A-suite", then their compensation will balloon for exactly the same reasons.
CxO salary isn't the market clearing price for the labor these people perform, it's more like power-leveling your friends in an RPG so that they can quest with you. Owners want their managers' interests to be with capital, so they have to give them some.
> Top management has insane levels of compensation as a strategy by ownership to alight management's interests with their own, by turning them into owners. If there is going to be a management layer at all, for example the proposed "A-suite", then their compensation will balloon for exactly the same reasons.
That is not correct.
Owner's don't align top management's interests with the owner's interests by giving them 'insane levels of compensation', they do it by giving the managements compensation in the form of shares of the company. It's not the volume of the compensation that aligns their interests, it's the type. Otherwise the 'top management' could just invest in the competitor and torpedo their own company making multiples of the original cash compensation as clients leave for the competitor.
If anything, a high base pay would be a dis-incentive to perform well, because increased wealth (a) reduces the marginal utility of additional compensation, and (b) makes the CEO less vulnerable to going down with the ship. The same goes for "golden parachutes".
IMO, if incentivizing good performance was really the goal, then companies would hire CEOs who are not already wealthy, pay them only enough base salary that they accept the job and can focus on it without worrying about paying bills, and compensate them mainly using illiquid, very long-dated stock options, which become worth a fortune if and only if the company is still around and profitable far into the future. It turns out that this is basically how founders are compensated, and it's a wonder that shareholders allow public-traded companies to be run in any other way.
Sure, if you want to spell it out. It is equity compensation, because they want the management to be owners of the same assets that they hold. Once that's settled though, the question is: how much equity? Well, it needs to be a large number. Owning $500 worth of stock doesn't make them a capitalist -- it just makes them a person with $500 worth of stock.
True, but you should be more cynical. When push comes to shove, every famous court case between management and owners has gone the same way: management wins, owners lose (meaning when owners wanted to turn back a management decision, courts refused to do it, or when asked to actually pin that responsibility CxOs always whine about on them, financially)
Why is management paid so much? Because they can make the argument "give me more, or I'll destroy the company", and actually be believable.
THAT is why it's so critical for CxOs to be aligned with owners' interests.
More generally about companies and how they’re organized - Why do we have “benevolent dictator” CxOs and trickle-down ownership and decision making powers? But bottom-up responsibility for faults and mistakes? I feel like it’s high time to have more democratic systems at our workspaces as well. More of a co-op model of working than a pyramid. Doesn’t make sense at all, for example, that the core engineers who built the google search algorithm would be paid 5x (or further) less than a CEO of Google. And then if they leave Google, they immediately stop receiving “royalty” or compensation for their own code that is still being used by Google and will continue to earn it even more money while they’re gone.
In a feudal government, the laws are created by the wealthy landowners with complete control over how the people should live. The peasants have little say in how things should be run, and few options to leave.
In a capitalist society, corporations are owned and operated by the wealthy, and they have complete control over the people at their jobs (and often outside it, too). The workers have little say in how things should be run, and cannot leave without fear of losing necessities like healthcare.
Democracy gives the people a say in how their government should be run. Socialism gives the workers a say in how their company should be run. We've managed to no longer be exploited by our government (but not completely), but we still have to live with being exploited by the wealthy.
Democracy is to Feudalism as Socialism is to Capitalism.
I honestly think this is going to be a big part of what remains when AI is doing everything we currently think of as our work. Legally or morally, some things need a human in the loop.
LOL! The first thing that came to my head was, "I've never had a CEO that shouldn't be in jail. Well, except for the current one. He seems okay. The others committed fraud and deceit at a level that would surely have them on the wrong side of the law, if not in prison.
Kind of stems from every CEO except this latest one has been a. Some sort of mental, and b. some sort of sociopath. We can see this with our big name CEOs of course, but even these small-time CEOs have the same problem. They're lacking something human, but that is also part of what drives them, and keeps them, CEOs, I suspect. It's a job that requires you to not have any qualms about taking a group of people on a ride and then screwing them over for your benefit.
> Everyone agrees: AI is coming for the developers. The $200,000-a-year engineers writing CRUD apps and maintaining CI pipelines. The line workers of the knowledge economy. Trim them. Automate them. Celebrate the efficiency gains. Watch the stock pop
I very much do not think everyone agrees here, and using the Block layoffs as an example is pretty poor reasoning. It's the same kind of blind, "believe and report exactly what the companies say about these things, regardless of their incentives in saying these things" type of breathless clickbait tech journalism that is becoming extremely exhausting to wade through.
There's probably a good discussion in here somewhere but the way these flimsy arguments are presented as absolute fact is a really annoying style to read, personally.
This author wrote basically the complete opposite view barely more than a few months ago which makes it read even more like clickbait slop:
This author disagrees with this take. They are setting a scene here, and explicitly saying that the Block story wasn't about AI at all a few paragraphs later.
If that "bait" caused you to stop reading despite the fact that you probably agree with the author's sentiment, it's not very good bait.
I agree with none of this. It's clickbait slop, very obviously, and that did make me skim it faster than I normally would have, but I read it. The burden shouldn't be on me to try to understand the point clickbait slop is making. This "style" is unreadable and exhausting and that was my salient point. Read what I just linked, it makes the complete opposite conclusion just a few months ago.
How good, non-slop writing usually works is - you lead with your main point, and break it down further throughout the main article. The fact he contradicts his leading hook indicates slop and bad writing, not failure for me to understand whatever the hell the point of this nonsense is (other than to get clicks).
Turn it around - employ "copilot-boss" for your business and stay a grey eminence.
Perhaps a lot of indie devs hate executive and managerial stuff, then what if AEO could lead the business execution while being fed with some minimal project outcome objectives from the technicaly focused dev.
I tried to remember the study that put the usefulness of a CEO at 10% of the success of the company and found this Science Direct paper from 2023 on "The CEO effect and performance variation over time" which discusses many studies. tl;dr average is 15-20% but they have fun chewing over the outliers.
I agree, fire the CEO. But I have a slightly different take that doesn't involve AI. What if we indeed get rid of the entire C-suite?
Even better still: why are companies and orgs hierarchical? Why is there always a - for lack of a better word - dictator in charge? AI CEO is still an AI dictator.
We are permitted to vote, but democracy in everyday life, that's a bridge too far, chaos, riots in the streets, cats and dogs living together.
Maybe there are too many 'temporary embarrassed billionaires' here on HN, but you have more in common with the average bum in the street than any of 'that' class.
It's time that we as a people extend democracy towards the workplace and operate like a cooperation, working on the base of consensus. This is not a new idea, but it won't give you a chance to become a billionaire, and that's exactly the point.
Are they rare? Aren’t credit unions worker cooperatives? Insurance is often structured this way, and I’ve heard of farmer collectives too. I have a worker cooperative grocery store nearby. I do photography as a hobby and there’s all kinds of photography cooperatives, including Magnum which is incredibly famous in that world. I’m in an HOA which is another cooperative.
Most "co-ops" are customer co-ops (Credit Unions, for example, are owned by their members, most grocery co-ops are membership programs, REI is/was the same). Farmer co-ops are owned by a collection of farmers, to pool resources for selling to consumers, but most employees aren't co-owners. Worker's co-ops are rarer, but you find them in the taxi industry pretty often, and in home care.
In the US democracy we still have a strong central executive with a lot of decision making power.
Parliamentary systems do not always have a President per se, but generally have a similar role of an individual who can quickly make decisions in emergencies and crises.
So in practice I’m not sure democracies are all that different in practice.
I work for a cooperative in an upper management role. My goal is for us to sustainably produce great products that serve the needs of our community while being a great place to work for our employees. I couldn't possibly care less what our market capitalization is, other than from the perspective of wanting to serve the biggest slice of our community that I can. But if another co-op stepped in and did that instead, I'd be equally happy.
Workers ultimately have a job because they are useful to management, and management have a job because they are useful to ownership. Top management has insane levels of compensation as a strategy by ownership to alight management's interests with their own, by turning them into owners. If there is going to be a management layer at all, for example the proposed "A-suite", then their compensation will balloon for exactly the same reasons.
CxO salary isn't the market clearing price for the labor these people perform, it's more like power-leveling your friends in an RPG so that they can quest with you. Owners want their managers' interests to be with capital, so they have to give them some.
> Top management has insane levels of compensation as a strategy by ownership to alight management's interests with their own, by turning them into owners. If there is going to be a management layer at all, for example the proposed "A-suite", then their compensation will balloon for exactly the same reasons.
That is not correct.
Owner's don't align top management's interests with the owner's interests by giving them 'insane levels of compensation', they do it by giving the managements compensation in the form of shares of the company. It's not the volume of the compensation that aligns their interests, it's the type. Otherwise the 'top management' could just invest in the competitor and torpedo their own company making multiples of the original cash compensation as clients leave for the competitor.
If anything, a high base pay would be a dis-incentive to perform well, because increased wealth (a) reduces the marginal utility of additional compensation, and (b) makes the CEO less vulnerable to going down with the ship. The same goes for "golden parachutes".
IMO, if incentivizing good performance was really the goal, then companies would hire CEOs who are not already wealthy, pay them only enough base salary that they accept the job and can focus on it without worrying about paying bills, and compensate them mainly using illiquid, very long-dated stock options, which become worth a fortune if and only if the company is still around and profitable far into the future. It turns out that this is basically how founders are compensated, and it's a wonder that shareholders allow public-traded companies to be run in any other way.
Sure, if you want to spell it out. It is equity compensation, because they want the management to be owners of the same assets that they hold. Once that's settled though, the question is: how much equity? Well, it needs to be a large number. Owning $500 worth of stock doesn't make them a capitalist -- it just makes them a person with $500 worth of stock.
>' could just invest in the competitor
I mean, the shareholders would most likely sue them out of existence for doing something like that.
Read more Marx?
> Workers ultimately have a job because they are useful to managemen
Workers have a job because their labour produces value
Eh - sometimes people get hired in bulk to show growth and then get assigned valueless work, or work not necessarily as valuable.
Both statements can be true.
> sometimes people get hired in bulk to show growth
Um no, this doesn't happen. Nobody is paying useless people just to "show growth".
True, but you should be more cynical. When push comes to shove, every famous court case between management and owners has gone the same way: management wins, owners lose (meaning when owners wanted to turn back a management decision, courts refused to do it, or when asked to actually pin that responsibility CxOs always whine about on them, financially)
Why is management paid so much? Because they can make the argument "give me more, or I'll destroy the company", and actually be believable.
THAT is why it's so critical for CxOs to be aligned with owners' interests.
More generally about companies and how they’re organized - Why do we have “benevolent dictator” CxOs and trickle-down ownership and decision making powers? But bottom-up responsibility for faults and mistakes? I feel like it’s high time to have more democratic systems at our workspaces as well. More of a co-op model of working than a pyramid. Doesn’t make sense at all, for example, that the core engineers who built the google search algorithm would be paid 5x (or further) less than a CEO of Google. And then if they leave Google, they immediately stop receiving “royalty” or compensation for their own code that is still being used by Google and will continue to earn it even more money while they’re gone.
In a feudal government, the laws are created by the wealthy landowners with complete control over how the people should live. The peasants have little say in how things should be run, and few options to leave.
In a capitalist society, corporations are owned and operated by the wealthy, and they have complete control over the people at their jobs (and often outside it, too). The workers have little say in how things should be run, and cannot leave without fear of losing necessities like healthcare.
Democracy gives the people a say in how their government should be run. Socialism gives the workers a say in how their company should be run. We've managed to no longer be exploited by our government (but not completely), but we still have to live with being exploited by the wealthy.
Democracy is to Feudalism as Socialism is to Capitalism.
A big part of my job is responsibility. When AI can go to jail instead of me, I would be happy to let it take my job :)
Isn’t the main point of having a corporation as a legal entity to replace personal liability with corporate liability?
Corporations cannot replace some regulated liability, for example some types of professional engineers.
I honestly think this is going to be a big part of what remains when AI is doing everything we currently think of as our work. Legally or morally, some things need a human in the loop.
LOL! The first thing that came to my head was, "I've never had a CEO that shouldn't be in jail. Well, except for the current one. He seems okay. The others committed fraud and deceit at a level that would surely have them on the wrong side of the law, if not in prison.
Kind of stems from every CEO except this latest one has been a. Some sort of mental, and b. some sort of sociopath. We can see this with our big name CEOs of course, but even these small-time CEOs have the same problem. They're lacking something human, but that is also part of what drives them, and keeps them, CEOs, I suspect. It's a job that requires you to not have any qualms about taking a group of people on a ride and then screwing them over for your benefit.
> Everyone agrees: AI is coming for the developers. The $200,000-a-year engineers writing CRUD apps and maintaining CI pipelines. The line workers of the knowledge economy. Trim them. Automate them. Celebrate the efficiency gains. Watch the stock pop
I very much do not think everyone agrees here, and using the Block layoffs as an example is pretty poor reasoning. It's the same kind of blind, "believe and report exactly what the companies say about these things, regardless of their incentives in saying these things" type of breathless clickbait tech journalism that is becoming extremely exhausting to wade through.
There's probably a good discussion in here somewhere but the way these flimsy arguments are presented as absolute fact is a really annoying style to read, personally.
This author wrote basically the complete opposite view barely more than a few months ago which makes it read even more like clickbait slop:
https://boringops.sh/articles/its_the_humans_stupid/
This author disagrees with this take. They are setting a scene here, and explicitly saying that the Block story wasn't about AI at all a few paragraphs later.
If that "bait" caused you to stop reading despite the fact that you probably agree with the author's sentiment, it's not very good bait.
I agree with none of this. It's clickbait slop, very obviously, and that did make me skim it faster than I normally would have, but I read it. The burden shouldn't be on me to try to understand the point clickbait slop is making. This "style" is unreadable and exhausting and that was my salient point. Read what I just linked, it makes the complete opposite conclusion just a few months ago.
How good, non-slop writing usually works is - you lead with your main point, and break it down further throughout the main article. The fact he contradicts his leading hook indicates slop and bad writing, not failure for me to understand whatever the hell the point of this nonsense is (other than to get clicks).
I agree; it's poor writing that leads to poor arguments. If readers discard your argument, then you weren't making a good argument.
Turn it around - employ "copilot-boss" for your business and stay a grey eminence.
Perhaps a lot of indie devs hate executive and managerial stuff, then what if AEO could lead the business execution while being fed with some minimal project outcome objectives from the technicaly focused dev.
AxO prompt engineer: "pay no attention to the man behind the curtain!"
Absolutely, I've long-doubted the usefulness of a CEO vs the theory of a self-organizing co-op.
I tried to remember the study that put the usefulness of a CEO at 10% of the success of the company and found this Science Direct paper from 2023 on "The CEO effect and performance variation over time" which discusses many studies. tl;dr average is 15-20% but they have fun chewing over the outliers.
https://www.sciencedirect.com/science/article/pii/S104898432...
I'm not seeing a scenario where a CEO decides to replace themself. But if this is trolling, I fully support that.
I agree, fire the CEO. But I have a slightly different take that doesn't involve AI. What if we indeed get rid of the entire C-suite?
Even better still: why are companies and orgs hierarchical? Why is there always a - for lack of a better word - dictator in charge? AI CEO is still an AI dictator.
We are permitted to vote, but democracy in everyday life, that's a bridge too far, chaos, riots in the streets, cats and dogs living together.
Maybe there are too many 'temporary embarrassed billionaires' here on HN, but you have more in common with the average bum in the street than any of 'that' class.
It's time that we as a people extend democracy towards the workplace and operate like a cooperation, working on the base of consensus. This is not a new idea, but it won't give you a chance to become a billionaire, and that's exactly the point.
What you're describing is called a "worker cooperative" and they are somewhat rare but do exist already in real life.
Are they rare? Aren’t credit unions worker cooperatives? Insurance is often structured this way, and I’ve heard of farmer collectives too. I have a worker cooperative grocery store nearby. I do photography as a hobby and there’s all kinds of photography cooperatives, including Magnum which is incredibly famous in that world. I’m in an HOA which is another cooperative.
This doesn’t seem rare to me.
Most "co-ops" are customer co-ops (Credit Unions, for example, are owned by their members, most grocery co-ops are membership programs, REI is/was the same). Farmer co-ops are owned by a collection of farmers, to pool resources for selling to consumers, but most employees aren't co-owners. Worker's co-ops are rarer, but you find them in the taxi industry pretty often, and in home care.
Today I learned. Thank you!
I think credit unions are often owned by the customers or members. Not the employees.
eg https://en.wikipedia.org/wiki/Mondragon_Corporation (discussed on HN https://news.ycombinator.com/item?id=22287794 and https://news.ycombinator.com/item?id=22287794)
or https://en.wikipedia.org/wiki/Igalia (can't find any discussion related to their coop model - there is https://news.ycombinator.com/item?id=37799973 without any comment )
No, what they are describing is workplace democracy:
https://en.wikipedia.org/wiki/Workplace_democracy
In the US democracy we still have a strong central executive with a lot of decision making power.
Parliamentary systems do not always have a President per se, but generally have a similar role of an individual who can quickly make decisions in emergencies and crises.
So in practice I’m not sure democracies are all that different in practice.
It would be worth thinking harder before moralizing.
that's why Mondragon is not Nvidia
https://en.wikipedia.org/wiki/Mondragon_Corporation
Thank goodness they're not.
I work for a cooperative in an upper management role. My goal is for us to sustainably produce great products that serve the needs of our community while being a great place to work for our employees. I couldn't possibly care less what our market capitalization is, other than from the perspective of wanting to serve the biggest slice of our community that I can. But if another co-op stepped in and did that instead, I'd be equally happy.