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Comment by product50 | Hacker News Reader

CEOs make or break the company. The best analogy is to look at CEOs who didn't do well. Consider Paul Otellini at Intel who missed the mobile processor boat completely when Steve Jobs approached him. Or maybe consider Mark Hurd or Carly Fiorina of HP who ransacked the company by cost cutting measures and acquiring Compaq! Or maybe look at Nokia's CEO Olli-Pekka Kallasvuo in 2008 who missed the entire smartphone wave!

Now assume each of these CEOs who failed massively made $5M/yr (very conservative estimate). Is Bob Iger 100x more than that given what he has done at Disney? From acquiring Marvel to BAMTech to having a streaming strategy laid out (and being executed on well) - Bob is definitely phenomenal and one of the core reason why Disney is in the position it is in terms of strategy and execution. Is that worth $66M/yr? Absolutely, in my opinion.

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What do the CEOs who fail and the CEOs who succeed have in common? They're both incredibly overpaid. The question should not be is Bob Iger worth X/year?

The question should be could he be paid a fraction of what he is in reality and do an equally good a job? Or could somebody else do an equally good a job as Bob for a fraction of the cost? The answer is almost always yes to both questions, and it applies to all companies not just Disney.

>The question should be could he be paid a fraction of what he is in reality and do an equally good a job?

Just because it's possible for him to do the same job at a lower salary doesn't mean he will. Disney needs to pay him enough so that he doesn't take a higher paying job elsewhere.

It is surprising people don't get this dynamic. Extremely strong leaders are rare. And the market pays them for that skill.

> Extremely strong leaders are rare.

That’s what a Fortune 500 CEO would have you believe. There are over a billion English speakers in the world and you don’t think there are at least thousands of people (who aren’t already overpaid CEOs) that could be doing a better job than Iger, or any given Fortune 500 CEO for that matter?

100s - probably yes. 1000s - absolutely not. Please help find those 1000 potential CEOs and pay them lower salary and see if the company still succeeds. Otherwise, you pay CEOs for the skill and experience they bring and keep them for the impact they make.

If all the credit and blame for success or failure is due to the CEO, why is anyone else paid at all?

If you removed the CEO (and any leadership), would there be any success to give credit for?

Company strategy and focus matters. And CEOs have outsized powers in deciding that. The rest of the company 1) either executes the strategy 2) proposes new strategies - some of which bubbles upto CEO for their review/approvals and 3) are G&A (HR/FInance etc.).

But these guys are being compensated in the millions regardless of whether they are making or breaking the company. Why are they earning $5M for failing massively? If I fail massively at my job I get fired and probably have tons of trouble getting my next job. If a CEO fails massively they get millions in golden parachute, a board seat on someone else’s company, before they become CEO again somewhere else. I would buy the “they get paid for their performance” line if I ever met a homeless or starving ex-CEO. Still waiting to see that one.

Shareholders are burning their money. I would have gladly done the job of “fail to turn around Yahoo” for a mere 1/1000th of what MM took home.

Would giving one of the ceos in your example a 10x increase in pay have led to a better outcome for the company? I'm not convinced that it would.

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