The myth of big salaries (it's all marketing)
A 2009 blog post arguing that multi‑million‑dollar executive and finance salaries are “just marketing” prompts a broader examination of what actually drives high pay and how much money matters once basic needs are met. Commenters clash over whether compensation beyond a certain level has diminishing personal utility or instead buys power, influence, and security, and they debate if workers really prioritize salary over factors like autonomy, mission, and work–life balance. The exchange also touches on inequality, trickle‑down economics, and whether mechanisms like salary caps or pay ratios could curb excessive executive compensation without distorting labor markets.
Context and Article’s Age
- Many note the piece is from 2009, written amid anger at finance-sector pay after the crisis.
- Several argue it hasn’t aged well given post-2008 winner‑take‑all tech/finance markets where a few hires can move hundreds of billions in value.
- Others say the basic critique of “big salary as marketing” and finance self-mythologizing still resonates.
Money vs. Other Job Attractions
- One camp: salary is the primary axis; with enough money you can hire top talent and people will switch for more.
- Counter‑camp: beyond a comfortable level, people weigh other factors heavily—autonomy, mission, team quality, career prospects, internal tooling, work‑life balance, prestige, and impact.
- Several share personal examples of choosing lower-paying but more meaningful roles.
Diminishing Returns and Marginal Utility of Income
- Some endorse the idea that after some high threshold, extra pay has little effect on day‑to‑day life; limits include time and attention, not consumption.
- Others push back: even at $1M/year, more money affects housing, schooling, retirement speed, travel comfort, and philanthropy/political influence.
- Marginal utility and log‑income happiness research are mentioned; where “enough” lies is contested and context-dependent.
Inequality, Power, and Morality
- Repeated theme: money is power—especially political—and extreme incomes help create a de‑facto nobility.
- Trickle‑down arguments (“high earners spend/save, benefiting others”) are heavily criticized as empirically weak and misallocating scarce labor to yachts and luxury goods.
- Extended subthread debates whether consuming without working (early retirement, inheritance, living off capital) is morally wrong and whether compensation should track labor hours.
Salary Caps and Pay Ratios
- Some support caps or limits on CEO/worker pay ratios to counter runaway executive pay; others argue markets should set prices and caps just shift compensation into perks and structures.
- Sports leagues and WWII-era wage controls are cited as examples where caps changed behavior but didn’t eliminate competition.
Examples and Counterexamples
- Norwegian sovereign wealth fund managers’ relatively modest pay is cited to show top talent doesn’t always require Wall‑Street‑level packages.
- Others argue that in truly competitive environments (hedge funds, elite CEOs) very high comp is rational if tied to outsized value creation.