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Comment by CSMastermind | Hacker News Reader

The further I've risen in my career the more I've grown skeptical of the CEO role and the compensation most of them receive.

The truth is that there are truly important CEOs without whose leadership their companies would flounder, stagnate, or die.

At the same time I've been wholly unimpressed with the leadership of the vast majority of CEOs I've met, not just from an outside looking in perspective but from a working closely with them and meeting them personally perspective.

I've met any number of VPs, COOs, CFOs, etc. that are extraordinary leaders and I've met mostly CEOs who exploit those people and the value they create for their own personal gain.

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Yeah the older you get, the more visible the grift is. CEOs/Elite companies hide behind abstractions of eliteness/prestige. From the outside it always seems they are on the ball. On the inside you realize the guy that went to Harvard that is now CEO, got into Harvard due to rowing, and fell upwards for 15 years afterwards. Close interactions with these people will almost always reveal that they are mediocre regular human beings that got put into a seat early in life.

While you were toiling away on some task at work, he was busy trying to meet people higher up the chain.

The kicker though is that Harvard does attract real outliers (mark zuckerberg, bill gates), and so the name brand rests on them identifying one guy a year that might change the world.

Funnily enough, both names you mentioned dropped from Harvard

they still attracted them.

Is Bill Gates a real outlier? Seems to have massively exploited the people around him. Didn't even build DOS, got the contract because of parents connections. If he's lucky, his lasting legacy will be donkey.bas.

I think you are massively underestimating the amount of work he put in, and his abilities outside of just this deal.

He didn't just buy DOS, he made sure it kept up with the best OS on the market, including Apple's. He also recognized the initial quality of DOS outside of several other OS on the market, which he learned because he was an expert in the field and made BASIC. He also Microsoft ahead of the curve at almost every point during the computer revolution.

lol. Basic was made by John G. Kemeny and Thomas E. Kurtz at Dartmouth College in 1963.

How were they ahead of the curve? By implementing a GUI well after Apple had stolen the designs from Xerox?

Microsoft didn't even write the port of qDos for the IBM PC, they had to get Tim Paterson from SCP to write it for them.

I meant a BASIC interpreter for the Altair, but HN won't let me edit post. There's no doubt that Gates is a capable programmer.

Microsoft was successful for a reason. They were much faster, and better than other computers. They demolished the personal computer market for decades.

Wouldn't you say someone who became a billionaire in their lifetime is by definition, an outlier, whether or not you agree with how they got there?

The persons might not posses any outlier capabilities. A big part of success is being born in the right circumstances at the right time and being lucky with a few things.

No. Outlier from what? We're talking about the distribution of grift among executives, not wealth among the general public.

> On the inside you realize the guy that went to Harvard that is now CEO, got into Harvard due to rowing, and fell upwards for 15 years afterwards.

Not just the ones that started at Harvard, though. The way the corporate springboard is built, at some point in every executive's career, gravity reverses itself, and they simply cannot fall at all (unless they choose to)... You never see a SVP at a FAANG drop back to being a mere Director after a bad run. They will always fail their way into CEO at a smaller company or something. You never see a Director go work for some other company as a Software engineer after failing to get promoted. None of this class ever seem to be worried about "Crap, what if there are layoffs--will I need to be an IC (individual contributor) for a bit until I find my next VP job?"

I'm closing in on 50, still as an Individual Contributor worker bee. If I lose my job, I face a non-zero likelihood that I'll be unable to find anything else besides stocking shelves at Home Depot. If I were ever to reach "Director" level, I'd never have to worry about that again.

> None of this class ever seem to be worried about "Crap, what if there are layoffs--will I need to be an IC (individual contributor) for a bit until I find my next VP job?"

This is not entirely true. Some directors do go to another company at a Sr. Manager level.

That said, the reason they appear to always find another job at a sideways or higher level is because most people at director or VP level at successful companies just retire and become "consultants" or "career coaches".

For those that are still looking for a titled job, there is always a smaller company that needs experienced managers. They will give the title to make up for lower compensation.

These upper managers hire executive recruiters who find them opportunities. They sometimes rely on their network.

These managers are never questioned on technical skills, market understanding or ability to lead which is why their likeability gets them the next job.

But realistically, most of them retire with a few million. They are just not in the market like us plebs.

Personally, while reading this, I was thinking of the recent waves mass layoffs (just today, massive layoffs and studio closures at Epic Games and SEGA), all while executives appear to be comfortable and keeping their million dollar salaries. I wonder how many jobs could be saved if a CEO making $40m+ just temporarily cut their salary? And I wonder how much more productive could a company be if so much of its funds weren't being funneled into the executive suite's pockets?

Famously, Nintendo's president Satoru Iwata slashed his pay in half in 2014 due to the failure of the Wii U, and imposed pay cuts of 20-30% on all other executives. I don't recall any layoffs being announced in this period.

https://www.polygon.com/2014/1/29/5356812/nintendo-boss-sato...

It's an attractive idea for sure, but it's probably not that much in the scheme of things.

Say a full time employee earns $150k - total cost to employer is usually 2x so $300k. $40m / $300k = ~133 jobs. So if the company is laying off 10k employees it's close to 1% jobs saved - almost a rounding error. And that's if you cut the CEO's pay to $0.

A CEO would have to be earning something like 1000x more than their average employee for it to start making a really noticeable difference in actual layoff decisions.

Where are you getting these numbers? Ten thousand lay-offs seems like an arbitrary number to make this math look better. The most recent lay-offs by Epic were less than a thousand, roughly 830. Using, that number, even with the other figures you've chosen, a CEO pay cut would've definitely been noticeable.

This is a good point, the smaller the layoff the more you can argue that the CEO (or others) should just take a pay cut instead.

>Say a full time employee earns $150k

I don't know why you would. That's an egregiously high mark to use for a general statement on CEO vs employee earnings. It better figure is probably close to 1/3rd than even 2/3rds of that. Their total cost is not going to be 2x.

I don't know why you'd obfuscate with such unrealistic numbers, because the fact remains that cutting the CEO down to 0 is probably still not enough. The correct thing to do would be to cut the CEO down to zero AND cut most of the C-suite a significant portion* AND cut management and supervisor roles some smaller amount AND cut a nominal amount from all employees earning over a certain mark (perhaps 2x the median). With that, you will have executive, management, and labor all alike able to weather the economic storm. I find that more morally palatable than the seeming status quo of kicking out the workers least able to deal with a downturn.

*(as mentioned in another comment, Nintendo did this after the Wii U came in last during its console generation)

Your calculations seem so complicated that it is hard to point to any fault in them... An executive often earns 50x of lowest paid employees. Cut CEO salary in half saves 25 jobs.

I would say the CEO could still live comfortably and be proud of keeping those people working while adding value to the company.

> I would say the CEO could still live comfortably

The CEO would take another job. It isn't about comfort.

>earns $150k - total cost to employer is usually 2x so $300k.

2x? why this much? Oo

My bad, looks like the direct costs of an employee are more typically 1.4x the salary. That's basically taxes, benefits and perks and benefits. There also indirect costs like equipment, working space and administration so I believe the true cost of having an employee actually doing work is higher but probably more like 1.6x salary and not 2x.

A VP at Google makes about 5-10m in comp with SVPs making about 2-4x that (and CEO about 10x that (these are ranges so very unlikely will have some one with all those multipliers in the "extreme" range)

There are about (guessing and talking to people) 100-200 VPs conservatively and a dozen or so SVPs. So cutting leadership comp is reasonably feasible to save 10k jobs no? We haven't even talked about senior directors and directors.

At an average cost of 300k that comes to about $3B? At 5M average VP comp, even halving VP comp alone (not unreasonable given company direction is largely impacted by VP perf?) can save a good amount of job?

True, I think cutting pay for all executives would make a meaningful difference in a layoff. But don't forget that some fraction of execs might also be getting the axe in said layoff. GP was talking about CEOs specifically.

My brother was the ceo of a smaller company. In 2009 he cut his own salary to be able to retain employees. A few years later he resigned when the founder and chairman was pushing him to do something semi-illegal. While he was looking for a new job, which takes some time at this level, his wife divorced him and somehow instantly had a new relationship.

There's a theory that the second-level, C-suite employees all are entered into a gladiator contest to get the giant extra bump in pay that comes with being chosen to be CEO. So they work with great energy and ingenuity to make things happen, hoping for this 5x bump in pay.

Only one of them gets it, and he/she may be erratic in the very top role. But the next layer repopulates and the process continues.

Would be more convincing if the in-house promoted CEO wasn't that rare a sight. I guess it's a popular theory amongst those second-levels, on the surface because it tells them of that 5x future, but deep inside perhaps more because it paints them as almost super-human productivity outliers.

The common theme I've noticed is that they are extremely charming and interesting people to talk to.

Adam Neumann might be the best example of a CEO that was propelled into billions on charisma alone. We love the story of the heroic CEO that inspires everyone.

I actually think that Adam Neumann has real talent in building a brand/product. He may have sold the top of a worthless company, but he did so masterfully.

No doubt he’s a great hype man. If an adult had steered the company and let him be the megaphone, perhaps the story of WeWork would be different! Or maybe it was always flawed lol we’ll never know I guess.

"Talent" is an interesting way to put it. There has to be buy-in on the other end, of course. Being realistic: how far would he have gotten shilling his pump-and-dump as someone with a similar background who was

>black

>a woman

>disabled

>short

>lacking his luscious head of hair

? I think the reality distortion field tends to fail in those cases. His product was a sham and his brand cratered when that was exposed, so it's probably wrong to call him "talented" in that regard. Rather, it's more correct to say he possessed qualities (earned and not) that, even today, inspire positive feelings in many. That's unassailable, as we sit here today talking about someone who objectively ruined thousands of lives as someone with "real talent" and not potential "guillotine fruit" or a "cement shoe male model."

appearance isn't independent from charisma.

Kim Kardashian did it pretty well with crypto. Elizabeth Holmes was exceedingly good at what she did. Brian Kolfage did exceedingly well at conning people into millions. Bernie Madoff was only 5'7'', SBF is only 5'8''. This is a short and certainly non-exhaustive list.

I think given sufficient charisma and just enough but not too much mystery around the product alongside short term promising returns anybody can fall for what's being sold.

It's not a binary. Kim Kardashian set the Western beauty standard for a few years, Elizabeth Holmes and SBF had direct relatives with exceedingly helpful credentials and connections, Brian Kolfage is a decorated veteran who looks "normal" (in our image-obsessed culture) in any bust shots you may find of him, and Madoff started his career when the average height was lower (and followed the pattern of shorter men not becoming hugely successful until later in their careers).

Most of the people on your list also benefited hugely from affinity bias in some shape or form, which probably speaks to a large component of what's actually going on here. A marginalized identity can be disqualifying for most would-be marks, but another aspect (or even the same aspect!) of one's identity or presentation can override people's critical faculties and lead them to trust you when they otherwise wouldn't. This itself is an aspect of "charisma" (or the lack thereof). My point is that it's not a product of one's effort, and is, in fact, so out of one's hands that its read can change depending on the audience.

I disagree that this somehow disqualifies their marginalization that they started with. They may have had another characteristics about their lives that affected that marginalization in unexpected ways. For instance, before Kim Kardashian was the "western beauty standard" she was effectively a nobody who did a pornography film with an R&B artist. Generally we regard sex workers as marginalized by default and yet the way she maneuvered everything made it like rocket fuel to her career. Had she messed that up we'd be talking about her more like Paris Hilton, who had vastly different outcomes. Brian Kolfage was similar; the man has to travel in a wheel chair and has a prosthetic hand most of the time, so I heavily disagree that he's relatable to any degree. You may have a point about Holmes and SBF, but I rather doubt many of the people who did business with them knew their parents. That's to say, I think you can find an abundance of reasons to eschew someones marginalization once they're successful. That's what intersectionality tries to address, and your reply seems to be the antithesis to intersectionality.

>a woman

Not going to comment on the other cohorts, but at least there's a good representation for this one in Elizabeth Holmes.

Masters of Bullshit... - https://www.cnbc.com/video/2019/01/14/watch-cnbcs-full-inter...

This is all imo, but in a company you have three interests that are important:

- The company

- The employees

- The shareholders

We currently only recognize two of those things. The board has duties to care, obedience, and loyalty which somewhat represents the interests of share holders but also somewhat represents the interests of the business, which also somewhat represents their own interests. The CEO has self-interest in the form of performance compensation, preservation of the business, and obedience is highly debatable as CEOs are very rarely held to any degree of accountability. Instead the company absorbs the bad actions of the CEO while the CEO inherits all of the reward.

That's a long way of saying, we should restructure the interest groups that have an equal say in running a modern publicly held business. A caveat being that none of those bodies should be a single person or have beyond two overlapping interests.

CEO’s that rely on big consulting orgs to define strategy generally flounder. That’s because they don’t understand what product they plan to put out and have engineering chops to set the right direction. Yeah - Musk said this but most people in the engineering world knew it long before he articulated it publicly. Granted that’s most ceo in the US today. But it provides an indication of how ineffective corporate America is at making fundamental advances.

> […] and I've met mostly CEOs who exploit those people and the value they create for their own personal gain.

And also turn once-great companies into basket cases:

* https://www.penguinrandomhouse.com/books/646497/flying-blind...

Damn the poor VPs, if only they could unionize.

Perhaps I've been more fortunate in my employment, but the majority of CEOs I've worked with are great leaders and materially contribute to the company's success (2%+)

> I've met any number of VPs, COOs, CFOs, etc. that are extraordinary leaders and I've met mostly CEOs who exploit those people and the value they create for their own personal gain.

You just don't understand the genius required to come up with the idea of putting radio on the internet. These people are visionary thought leaders /s

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