The horizon is not so far as we can see, but as far as we can imagine

Rentiers vs. Capitalists, Yahoo CEO Edition

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 pbulic 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 through stock options!

It’s good to be the Queen/Duke. Ahhhhh…what a life.

And this, folks, is why you don’t have nice 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 it would if they did not exist. Restrict compensation to up to seven times the median, fire everyone who earns more, and promote those below them and I guarantee that in ten 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.

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Open Thread


Was All the “Trump is Hitler” Rhetoric Right?


  1. We elect them, so it must be what we (collectively) want.

  2. DMC

    My one word argument that the rich don’t pay enough taxes: Billionaires.

  3. If we wanted to pay enough taxes, they would. We (c) want a chance to be billionaires. No, it does not make much sense.

  4. different clue

    I wonder what currently-Yahoo functions will be further crapified, or even newly crapified for the first time, when Yahoo becomes Oath. (Lambert Strether introduced the word “crapified” over at Naked Capitalism).

    One function at Yahoo which still seems crap-free to me is their roundup of Images. You can type in the name of the thing or subject you are interested in and then the word image and bunches of related images come up. Every image can be viewed in turn and best of all, the URL that image came from is listed. I have found some very good blogs and websites behind some of the URLs findable through a brute-force viewing of tens or hundreds of images. I would never have found them through Yahoo’s crapsearch or Google’s crapsearch. And I have found that other search engines handle Images worse than Yahoo handles them.

    So people in search of informative blogs and websites about their pet subject might want to use this sideways Yahoo-Images approach to sneak into knowledge of very good blogs and websites before Yahoo becomes Oaf, and Oaf Images becomes crapified.

    (I am sure the bloggerati already know more about all these tricks than I will ever know. But maybe fellow noobeez like myself will find this approach useful).

  5. Hugh

    I think you meant to say “The worst performing CEOs get higher compensation.”

    And I would have said “You can have a few really rich people or a good economy; you can have a few rich people or a democracy.” The meaning is the same, but the distinction is sharper.

    Finally, I would not call Mayer’s compensation just rentierism but pure theft.

  6. Ed

    There seem to be two types of CEO’s: the rare ones that founded the company, built it up, and made good. Then the rest are professional managers promoted up to that position, which in my experience has little to do with understanding the company and a lot to do with corporate and financial sector politics.

    The problem is, the latter hide behind the mythology of the former. Who doesn’t want to reward Bezos for what he’s done? He worked and earned it! So don’t *all* CEO’s deserve similar compensation? (sarcasm here, and also note that this presumes that Bezos actually deserves to be paid such high multiples over his warehouse workers).

    The rentiers do a damned good job of putting on a “producer” facade.

  7. Ian Welsh

    Yes, thanks Hugh.

  8. Hugh

    Ed, to paraphrase, there are two types of CEOs. Those who establish a monopoly and those who run it into the ground. Bill Gates is the first kind, and Marissa Meyer is the second kind.

    I like the bit about the producer façade. It encapsulates the essence of all the iterations of job creators, trickle down, supply side, Say’s Law, Reaganomics, voodoo economics.

    And what this gets to is the question of how much is enough. How much is enough for anyone in a particular society? At what point does what someone accumulates represent a taking/theft from everyone else? Not just in the cases where someone, like a Marissa Meyer, adds no value or wealth to a society, or even destroys it, but name a CEO, if you can think of one, who has created real wealth for all. At what point, do we say thanks, but seriously enough is enough.

  9. Synoia

    Any public company’s board should contain 50% elected by employees.

    The Compensation committee included.


    Shareholders can sell immediately. Employees have more invested and do not have the same mobility as money.

  10. highrpm

    i wouldn’t laud the likes of mega-business one bit. the biomimicry for the likes of amazon, google, micrsoft, et al is the cancer cell. it eventually kills the host.

    amazon collected 50% of the american consumer goods $$$ spent in 2016. and bozos wants to keep growing. besides a cancer, i think of tragedy of the commons. hey, i’m a small-timer.

  11. scruff

    The mythology of capitalism isn’t even realistic anymore. It’s supposed to be the case that a company profits because it creates wealth, but what if you’re Amazon, and you can somehow afford to operate for a decade before turning a profit? Well in that case, you can undercut market prices and destroy market options, thus destroying wealth. All perfectly in line with the ideology, even when your profitability ends up coming from cloud storage services in the end.

  12. Arash

    Brilliant article. Thank you

  13. Pelham

    Excellent points, straight through.

    And here’s where I think horrors like this leave us:

    We’re well beyond the stage at which palliative or remedial measures — such as more progressive tax law, a higher minimum wage, a stronger social safety net, etc. — are any kind of solution to the central problem.

    We’re even beyond the stage at which a whole new political-economic system to overhaul the way everything works is sufficient, although this needs to happen.

    But we are at the stage that, in the addition to the immediately previous point, something else needs to happen. And this entails actually clawing back every last rentier dollar that has been raked out of the economy by people like Mayer. And it’s not because those dollar can’t be replaced and put to better use — that’s simple enough — but because the towering injustice of allowing this dangerous class of oligarchs to retain great hoards simply cannot be allowed to stand. It is intolerable.

  14. realitychecker

    @ Pelham


  15. Tom

    Good commentary Ian, I have to be a nitpick on one thing, there is no such word as irregardless. The proper term in that instance is “regardless”.

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