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Comment by locopati | Hacker News Reader

Does Bob create $1b of wealth or do the workers of the company create that wealth?

The CEO is one of the employees of the company, so the two are not exclusive. The answer is that all the employees contribute, but in varying degrees. The contribution of a good CEO is usually the largest of all the employees, which is one of the reasons even clearly non-captive boards are willing to pay them so much.

I'm not arguing that they don't have a great deal of power and control over the direction and focus of the company. However, it does seem, especially these days, that their pay is not actually connected to their actions, as we see CEO after CEO destroy value while collected big rewards.

This seems like a completely different point from your previous comment.

The answer is that CEOs can be good or bad just like other types of employees, but (just like other employees) you have to pay market rate to hire one, even if they turn out to be bad.

That's like saying Scipio Africanus, Charles Martel, or Alexander the Great were nothing because their soldiers did the fighting. The leader manages and leads the troops, they follow his vision.

Take a modern example, Steve Jobs, the man is the creative visionary behind most products. He envisioned the wealth and then set the workers upon creating it. Without him it wouldn't have existed.

And yet, it's the workers/soldiers who often are the ones on the line. We see CEOs walk away with big payouts, even when their strategies have been disastrous (for the company, for the workers, for the stockholders).

That's not the CEO that's the board selecting the wrong person and creating the wrong compensation package. Just like a basketball player getting hurt after signing a huge contract.

EDIT: Look at PG's response above. same thing.

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