If money is incentive to make people more productive, why pay them to fail? Is meritocracy only for the poor?
Some co's wised up to this and pay mostly in company stock. But CEO's then initiate buy-back programs to jack up the stock price.
Isn't it obvious that's how our society is structured? The success of the sons and daughters of the hyper-affluent is non-negotiable - they'll get fancy jobs through family friends and continue making bank without being very competent.
Those at the bottom, if they work really really hard, might be able to join them
I wish there was a good enforcement mechanism to tie their pay to performance -- for good AND bad.
See here: https://www.institutionalinvestor.com/article/b1db3jy3201d38...
...TL;DR version here: https://eomail1.com/preview?p=d9e18eae-6673-11e9-9307-06b469...
...here's another: https://www.wsj.com/articles/best-paid-ceos-run-some-of-wors...
...and here's another: https://www.epi.org/blog/ceo-pay-still-not-related-to-perfor...
reminder that CEO pay is negatively correlated with company success (https://www.wsj.com/articles/best-paid-ceos-run-some-of-wors...)
That said, if good CEOs actually controlled the direction of the company and were compensated higher to attract talent - I would expect that to override the negative effect for a net positive. Since that's not the case, I think as you suggest that CEOs are "without active influence on success"
that is not a good thing, out of 2 monkeys throwing darts one of them will make money.
if you bet on an event with 50% chance of earning $1 or 0. your bet is worth $0.50
you need the bet to worth $0, and that is only possible by making CEOs financially liable, and that would never happen, nor is realistic, a CEO's decision could cost company billions.
so by this analogy the riskier the CEO's actions the outcome is greater for them.
if the bet pays off, they win big, if it doesn't the shareholders lose.
Except for the ones that go to prison, that doesn't really seem to happen; people who fail as CEOs tend to turn up in very well compensated executive (not necessarily, but still often, chief executive) positions elsewhere.
The executive class that populates boards and C-suites (and overlaps significantly with the major investor class for whom ultimately boards and C-Suites work) is heavily networked and anyone who fails in a mere job in that class usually had plenty of connections willing to help them get another similar one largely independent of merit.
https://en.wikipedia.org/wiki/Tony_Hayward
>Anthony Bryan Hayward is a British businessman and former chief executive of oil and energy company BP. His tenure ended on 1 October 2010 when he was replaced by Bob Dudley following the Deepwater Horizon oil spill. He has been chairman of Glencore Xstrata since May 2014.
https://en.wikipedia.org/wiki/John_Legere
>John Legere (born June 4, 1958) is an American businessman who is the chief executive officer and former president of T-Mobile US. His leadership at Global Crossing was controversial, which included large executive bonuses and filing for bankruptcy.
If you're talking on the scale of a non-founder CEO who is making $15 million per year, it happens all the time. There just aren't that many public companies that pay that much. The headline in this story comes from an analysis of the 350 largest publicly traded companies. A fired CEO can't just go down the street and find another $15+ million dollar salary ruining another company. Two examples would be Melissa Meyer and Ellen Pao. Both of whom are basically unemployable outside of board memberships.
1. https://work.chron.com/director-corporate-board-paid-19587.h...
They almost always get a very good C-suite job after and remain on boards with influence
I think the CEO career risk, excepting gratuitously bad behavior at the wrong time (see Mark Hurd), is actually quite low and very, very overstated.
Maybe as a future CEO, but I'm sure they'll have plenty of offers for upper-middle management and still be in the 5% to 1%. They may have to sell half their beemers or something, the horror.
So might Joe worker. Where's his compensation package?
Back before she fell off the deep end, Roseanne had one of the most insightful lines I had ever come across: "The object of business is to keep your buddies working, even if they’re fuckin’ idiots." Keep this in mind and the world makes a lot more sense.
https://classic.esquire.com/article/2001/3/1/what-ive-learne...
> The wife is the one who serves. But she is also the one who rules. It’s weird, because you have to stay humble and be strong all at the same time. The husband? He serves, too, only in a different way. And he protects. Just like the LAPD.
Even the reference to the LAPD in what seems to be a (positive?) light