this post was submitted on 29 Oct 2023
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do you seriously believe that the CEO of netflix was struggling to survive, was living on a month-by-month paycheck, and was having any cut in their "wage" ?
Some people tend to forget that behind a corporation that presents numbers that are falling behind, there are humans who make profits regardless.
No, I don't believe that, what would lead you to think that's my position? In fact, I appreciate that there is market conformity in compensation, and lowering wages of everybody from chair people down to entry level engineers is not so simple. It is exceedingly difficult to on one hand try to reduce expenses through wage reduction, while on the other continue to develop a competitive platform with industry experts.
I'm not saying there's no middle ground, because there certainly is. Indeed tech companies have been slashing jobs and perks to reduce costs. A recent example of that is with Disney, which included layoffs in Disney+. I'm not quite sure who in particular you're referring to in your last statement and surely I've misinterpreted what you mean with it, but to be clear, I personally don't think it would be fair towards employees to slash their income and expect them to work without making ends meet so that the rest of us to enjoy a recreational service.
That being said, I'm certainly not one to defend executive compensation. At the same time, we should appreciate that this is only a part of a much more complex issue than share price, dividends or executive pay. After all, even if the CEO received no compensation at all, it would make a negligible difference to the balance sheet and, by extension, our monthly service fee.
I want to reiterate that I don't disagree with you: corporate profits are certainly part of the problem. I just want to clarify that there are many more compounding external factors.
what are you even talking about? I never said employees' income should be slashed or expect them to work without making ends meet. I just said, that in such big corps, even though that in the papers they may saw declined numbers or even be below zero, there are still a few people (see executive board) who still make tremendous amounts of money. A CEO will always walk out with millions in their pockets because, well, that was their salary and the company's debts are not their own debts, so, well, capitalism. Ok, the company failed, there is no money to pay off debts and employees, but the money they made from the company is now theirs and cannot be asked back to pay off company debt. Because that's the legal system, the company was different entity. There is nobody liable for it in terms of personal liability.
It is always the lower level employees who take the hit.
I was afraid I had misinterpreted that part of your comment, so apologies. I was thrown off a bit by "humans who make profits," and in particular who you are referring to.
In my opinion, executive compensation is completely out of whack and perhaps the single most outright cause of wealth inequality. It would be unfair, however, not to acknowledge that when a public company is doing poorly, it does affect executive pay through the valuation of their stock, payout of their dividend or other equity based compensation. In principle, I think tying executive compensation with company performance isn't a bad idea, but in reality overall comp is, well, just completely disproportionate.
That being said, even if the compensation was a fraction is what it is today and that cost reduction immediately went towards a lower monthly service fee, it would be nearly negligible. Operational costs of services like these are astronomical, where the majority share remains in content assets; in the case of Netflix this constitutes production, licensing and delivery.