Capitalism 2 and Capitalism Lab Forum

Subsidiary Executive Compensation:
• The Executives in this game ask for way to much pay for running large companies pay should decrease as a percentage of profits as a company scales to larger sizes and possibly have a cap like in the real world. Also Maybe we should give city mayors a small salary for their work.

Background:
• The Executives for top US Companies:
o Top Companies ~$10+$100+ Billion Revenue:
- CEO ~$20-$30 Million
- Other C Executives ~$5-$10 Million
o S&P/Fortune 500 ~$1-$10+ Billion Revenue:
- CEO ~$8-$10 Million
- Other C Executives ~$2.5-$5 Million

• Other Companies
o Small Cap Companies ~$100+ Million Revenue:
- CEO $1-$3 Million
- Other C Executives $600,000-$1 Million
o Smaller Companies $5-$25+ Million Revenue:
- CEO $600,000-$1 Million
-Other C Executives $300,000-$600,000

• Governments:
o Congress Members $175,000+
o Large Metropolitan Areas (Cities, Counties) Executives $200,000-$300,000+
o Sizable City Executives $100,000+


Compensation Ideas:
• Compensation Scaling:
o Profit Range $0-$50 Million compensation as percentage of profit is at highest level
o Profit Range $50-$100 Million compensation as percentage of profit begins to scale down
o Profit Range $100 Million compensation as percentage of profit is at lowest level

• Compensation Caps:
o CEO $30-$50 Million
o Other C Executives $5-$10 Million

• Add Compensation Mix to Executives Pay of Salary, Bonus, and Equity Grants

• Operating Company Pay:
o Operate retail stores, factories, farms, mines, digital firms, etc.
o CEO:
- Total Compensation 5% to 10% of Operating Profits
- Salary = Greater of $100,000/year or ~0.1% of Company Revenue In $100K increments up to max $3 Million
- Bonus = 2 Times Salary paid at year end.
- Equity = Remainder of Total Compensation if Public Company for a Private company they will be paid a cash bonus at year end instead.
o Executive:
- Total Compensation 1% to 2.5% of Operating Profits
- Salary = Greater of $100,000/year or ~0.025% of Company Revenue In $50K increments up to max of $1 Million
- Bonus = 1 Times Salary paid at year end.
- Equity = Remainder of Total Compensation if Public Company for a Private company they will be paid a cash bonus at year end instead.

• Investment Company Pay:
o Own portfolio of companies/stock, bonds/cash, or own/operate real estate firms.
o CEO:
- Equity/Real Estate Portfolio 0.5%-1% of Assets on Management (AUM) in Cash or Shares
- Bond/Cash Portfolio 0.25%-0.5% of Assets on Management (AUM) in Cash or Shares
o No Need for other executives

• Startup Subsidiary Company Pay:
o New subsidiary company
o CEO:
- Salary $100,000/year
- No Bonus
- Equity Initial Grant of 5% to 10% of Company
- Equity Scaling: 10% of Shares with Initial Capital $0-$50 Million, Percentage of shares Scales Down based on amount of Initial Capital $50-$100 Million, 5% of Shares with Initial Capital of $100+ Million
o Executive:
- Salary $100,000/year
- Bonus $200,000/year
- Equity Initial Grant of 0.5%-1% Shares
o Converts to Operating Company or Investment Company Executive Formula after year with $10+ Million Profit or 3 to 5 years operation

• Government Executive Pay:
o Government Executives Should be paid a small salary for their work based on the size of the local economy. So that they have some income for housing or investing.
- $100,000-$300,000/year
-Scaling: Top 1/3 Cities pay $300,000, Mid 1/3 Cities pay $200,000, Bottom 1/3 pay Minimum $100,000

Great post standardplayer !!

I do have an addition though. To start i dont realy know how it is done legaly in the real world, but i would not suggest a max payment if a person is a CEO of a private company.
Essentialy every profit is owned by the CEO as sole owner of the company (only none profit companies have an legal obglitation (if im right) to put profits back into the company, either the bank account or investment.

Purifier wrote: Tue May 28, 2019 8:50 pm Great post standardplayer !!

I do have an addition though. To start i dont realy know how it is done legaly in the real world, but i would not suggest a max payment if a person is a CEO of a private company.
Essentialy every profit is owned by the CEO as sole owner of the company (only none profit companies have an legal obglitation (if im right) to put profits back into the company, either the bank account or investment.

I just put compensation caps in there as an option but I did not personally vote for it. If you are the CEO of a private company that you own it would not matter because the profit would be paid out to you in a dividend.

In real life if you own a business you should think of your job as CEO and the ownership of the business as separate. This allows you to measure your return on labor time and return on capital separately.

For example:
If you generated $120,000/revenue for a solo accounting firm as a professional accountant and you had to average ~80/hours a week to generate that you are not running a good business because you could make the same amount by getting a job working half the time for $90K Salary, $30K Benefits (Note: San Fran Bay Area Numbers).

It should be more like this $200,000-$300,000/Revenue working 40-50/Hours week, $120,000 for Salary and Benefits, and $40,000-$60,000/Profit after expenses which represents a return on assets like customers lists, brand/reputation, office equipment, etc.

Also, even a private company may have indebtedness in real life and in-game. It is generally fraudulent conveyance (and ergo illegal) to pay yourself so much you knowingly make your company insolvent. Agree that private co CEO pay and dividends should be distinct.

In the upcoming version 6.3.00, the game will exclude bank and insurance profit from COO, CTO and CMO salaries calculation.