this post was submitted on 21 Mar 2024
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[–] [email protected] 13 points 8 months ago (1 children)

Surely it costs $193 million to pay him in stock. That stock would otherwise have been sold for that amount to other people, and he's getting it for nothing.

[–] [email protected] 6 points 8 months ago (2 children)

Because you're exchanging stock worth $193 million for an equivalent amount of dollars, there's technically no profit or loss involved in the transaction. In the same manner, when paying stock as a compensation, you secure services valued at $193 million for an amount of shares worth the same: the transaction is entirely equal. So you don't make or lose any money by paying in stock.

Of course, the trick is that the value of the CEO's work for one year can be whatever he says. If your claim is that they could have gotten more value out of the stock had they sold it in the IPO, I think you are absolutely correct in that regard.

[–] [email protected] 2 points 8 months ago

The same argument can be had for paying in cash. Yet I still have to pay tax.

In fact I should get money back, because the services I provide to the company outweigh the cost of my wages (otherwise they wouldn't pay me). I'm making a damn loss over here!

[–] [email protected] 2 points 8 months ago

My brain despises econ and I always struggle with it. But that first paragraph smells like "MBAs cooked up a justification for why they don't pay taxes that doesn't actually make any sense".

The second bit makes me wonder "why don't we have some authority on evaluating the worth of CEOs?". Insert joke here about that worth being 0. And then I remember that the CEOs are the ones that would have to pay the government to make that rule.