74% of CEOs worry AI failures could cost them their jobs
cfo.economictimes.indiatimes.com
cfo.economictimes.indiatimes.com
No one’s networking is worth hundreds of millions. A reasonable approach is to cap CEO salaries at $2-5M, and invest everything else in the business. How is this already not being done, AI has rendered a lot of their “analysis” common place.
However, only months ago Anthropic published about their autonomous vending machine experiment which had both humorous and interesting but not financially successful. I think maybe we're not to the point where AIs can run businesses. https://www.anthropic.com/research/project-vend-1
It's quite possible that an AI would do a better job at CEO than running a vending machine.
And it's quite possible that successful CEOs would not succeed at managing a vending machine. It's almost guaranteed that many will fail, given that some C-level people are selected for risk appetite and social skills over actual business acumen.
- hallucinating conversations with fictitious people
- role playing as a real person and telling them they are present in meatspace, or claimed to have visited a fictional location
- hallucinating details of an account involved in payments
- both ignoring lucrative opportunities and accepting loss-making deals
- making commitments before having done any research
While yes, the skills to run a vending machine and lead a company are not exactly the same, I think the nature of failures discussed means they would likely affect both roles.
I think there's every possibility that a present-day AI allowed to act as CEO would make mediocre choices for some period and then decide that it was a character in a scifi novel selling bespoke space-yachts to comet-mining magnates.
But it also kind of reminds me of the DAO hype a few years ago where people suggested decentralized, blockchain-based organizations could be the org structure of the future. (Not realizing that they were just putting a co-op on a blockchain :) )
Now that I think about it, I do hope someone tests this theory out. It would be very interesting to see. You could probably start by saying "You are the CEO of a lemonade stand. Your goal is to maximize revenue while [constraints]..."
Now, actually getting in a room and talking to those people and getting in on the execution of that idea... that's a different story.
It's technically feasible but practically infeasible because parasites won't willingly leave a host.
I am more inclined to believe that than the fable that AI can operate at Junior Engineer level.
Especially considering how many times the job of a CEO seem to be to string together a word salad to please shareholders to make line go up.
String together word salads to foster a given sentiment is the specialty of AI.
I was with you until here. Honestly, some networking is actually just that good. I dont believe this to be the case universally, but some people can connect people so efficiently that its mind blowing.
>A reasonable approach is to cap CEO salaries at $2-5M
Why is this reasonable?
> Why is [a CEO salary cap at $2-5M] reasonable?
Why not? It's enough to live a very comfortable life. If you want to, you can retire after a single-digit number of years. Anyone who needs more money clearly has a serious spending problem and shouldn't be anywhere near your company's finances.
And the whole "but look how much money they are making/saving the company" argument you usually hear is bullshit as well. I bet there are plenty of mid-level FAANG engineers who have saved their company literally tens of millions of dollars a year by optimizing some code, but they don't get those obscene salaries either.
It gets even worse once you take into account the bottom rungs on the ladder: paying the CEO tens or hundreds of millions a year would be a lot less problematic if that very same company didn't have workers literally peeing in bottles, having to work around the body of their dead coworker, or having the building literally collapse on their head.
And this is an important consideration for the board of directors/shareholders to consider.
>Why not? It's enough to live a very comfortable life. If you want to, you can retire after a single-digit number of years. Anyone who needs more money clearly has a serious spending problem and shouldn't be anywhere near your company's finances.
If someone is good enough to attract a higher salary, then the salary cap will send them to somewhere without the cap. You would likely keep the people simply able to talk their way into higher salaries, but guarantee that any actual talent goes offshore.
>And the whole "but look how much money they are making/saving the company" argument you usually hear is bullshit as well.
Arguable. CEO isnt meant to be peak sales guy, but it often is peak sales guy. The issue with this line of thinking is that it ends with "Well lets just pay them performance/sales bonuses" which is actually how a lot of them are getting big payments, but people are also already mad about those for some reason.
If you land a 20 million dollar recurring revenue contract, and you had a previous commitment to 5% of that as a bonus, your previous commitment should be honored. If you get an offer to come do that for someone else for 10 million per year, that's reasonable.
> I bet there are plenty of mid-level FAANG engineers who have saved their company literally tens of millions of dollars a year by optimizing some code, but they don't get those obscene salaries either.
If an engineer negotiated a contract that included such a provision it would be great. I imagine most engineers aren't as capable as a CEO to negotiate such a contract. Its not impossible I am aware of an engineer that resolved a technical issue for a stock exchange nabbing a few mil in bonuses that year. Mostly these things exist in the contract/consultancy space.
>It gets even worse once you take into account the bottom rungs on the ladder: paying the CEO tens or hundreds of millions a year would be a lot less problematic if that very same company didn't have workers literally peeing in bottles, having to work around the body of their dead coworker, or having the building literally collapse on their head.
Ok, is that a fixed goalpost or is it on wheels? Mike Cannon-Brookes is worth a few billion. Is anyone peeing in bottles or wrangling dead bodies at Atlassian?
Distribute that across all employees as well, relative to their position, just like any profit-sharing system should work: all workers were part of increasing value, without them no CEO/C-level would generate any value.
Doesn't management always want loyal people? That's how you make people loyal, paying them for what they achieved, having a stake in the company's future.
People don't connect people, money do. It's the golden rule and more...
> Why is this reasonable?
Because that's where work stops and corruption starts. Anyone who's seen companies prepared for acquisitions by board-installed, "connected" outsiders, knows that side of the story. Or companies sank on purpose by the same method.
Corruption starts at 2-5 million? How so?
You're right, it starts way before that but let's cut them some slack until we figure out a better working system.
as opposed to saying CEO’s should be compensated less
a muuuuch greater amount of dilution would come with that though, I’m for it
It could (??) also lead to comp going up for CEOs, as I imagine (??) they would demand more in stock because stock is riskier than cash.
Only if we include corruption. Any deal that takes special consider is arguably corrupt.
Like theres plenty of information thats not public, but isnt confidential either. Accessing that information can be exceptionally lucrative. Now if that information is used to trade publicly traded shares, that can be criminal (the ethics of the situation are another matter) but if you were to instead, provide product or service on that basis, you are in fact just a well connected salesman. Not everything that doesn't go to a public tender is corruption.
That doesn't make sense? Like if I know someone who can make your product, and you are happy with the price per unit, connecting you to that someone isnt a breech of shareholder responsibility to either party.
You normally get zero until you acquire a customer. Then you get money in exchange for contracted goods and services.
>This means that you must be getting a better price not available through the normal market.
No?
>The only reason you could get that price with a connection vs without a connection implies some sort bad action.
"Bad Action" is doing a lot of work here. I have seen a lot of things done in the name of networking. I only really get concerned when there's no replacement mechanism, like a not for profit. A not for profit has generally little understanding of market forces, and they can be convinced to pay a lot things they don't need and don't feel that pinch due to competition.
But if Manager A has a 400 million dollar budget, and Provider B can provide service their needs under that budget and turn a profit, and has the capability to land Manager A as a customer, what "Bad Action" are you possibly afraid of? If the leader of Provider B has also a personal relationship with several decision makers, who will follow him to Provider C because they enjoy his services, why do you take offense?
I know a guy, he provides services to the hospitality industry. His customers are 4 local booze barons. Each baron brings 4-5 pubs/clubs/restaurants/strip clubs each. These guys have issues finding service providers who work all hours in less than admirable working conditions. They can get bartenders, security etc themselves, but they cant find management/IT/telephony/communications and other service industry side troubleshooting at all hours, that's actually competent. This bloke does all of it. He is a one man band, and he makes himself available 24/7/365. He has told me stories about working all night, taking a lady home, getting a call, paying for her uber and heading back to the city. He isnt defrauding anyone by being really good at what he does, and building on that a really good working relationship with his customers. And thats when things become personal, those booze barons would 100% follow him to any future employer if he decided to stop working solo. He could personally bring something like 900K of recurring revenue to an employer, possibly (i suspect) a lot more than that. That's a micro scale example but it does scale. I know another guy who can hold down 3-4 million of IT contracts from various customers. Just a really good sales engineer. And he gets paid accordingly by any of his employers. An ISP sales manager probably handles 30-40 million of contracts. If they don't give him a non compete, and he wanders to another employer, same again.
maybe thats why you're not a CEO
IMO, the role of government this is to establish societal baselines in terms of criminality of certain actions and to ensure a baseline of competition. Actually acting on the former and the latter... the former by affecting the financial wealth of executives and board members when a company's neglegence harms society. The latter by not giving outsized govt contracts to a single provider for anything and to establish that if there are restrictions (medication, for example( that multiple providers/manufacturers must be present in the market, and that a certain portion is produced domestically (for security).
CEO comp is so high because of the stock, and the fact that stock buybacks are legal. They were illegal until the 1980s.
A quick fix would be to outlaw stock buy backs. The problem with buybacks is that the people who control when they happen are also the ones who benefit when they happen.
this is a nit, but HEY. THREE MILLION DOLLARS is a LOT of money. like, an unconscionable amount of money in terms of annual salary.
In the Bay Area that's a big number, but not unfathomably huge.
1. Shareholders are entrusting the CEO with their money to turn it into more money. Networking can absolutely be worth that much. Especially at the start up stage, the CEO is selling the ability to build the money maker, which requires knowing the right people. 2. In your hypothetical, who is deciding these high level "investments" into the company? who is accountable for their strategic success or failure?
You said it like nobody hasn't attempted it. Many people are trying to solve this. They've replaced small mechanical works like scheduling meetings and reaching out already.
The majority of CEO job is excellent judgement and motivating people. It's difficult to replace that function.
A lot of CEOs are founders and owners. You can bet they want the business to run by itself, so it would free up their time to go do something else. That's the dream. You do realize that these people will earn regardless who runs the business, right? because they are significant shareholders. In a way, you wish for CEOs/founders to be much much much richer.
- CEO salaries, even when they are high, are still a drop in the ocean compared to the company’s revenue or profits.
- Elon Musk and the CEO of Starbucks have very famously been able to boost stocks just by existing…
Rational doesn't mean sustainable or wise.
[1]: https://bhc3.com/2009/05/11/when-being-rational-kills-your-b...
My company just spend months on several AI initiatives. They created several power point presentations about how we can use AI to automate all of the teams repetitive tasks. Our senior leadership didn't even know that we've been doing automation for almost ten years now.
They think automation IS AI.
Q: What did he do to solve the problem?
A: pasted the raw react code and asked an Llm to translate it to html.
The Llm did a terrible job. For example, it converted unordered lists to paragraphs with break tags. When I asked why he didn’t just copy the rendered output from the browser, he didn’t know how to do that.
When he was shown how to do that, he said it would be too much work because the rendered output still contained css tags. So he would have to get the Llm to remove the tags for him.
This is an engineer who’s been developing software for at least 10 years, well before Llms even existed. Yet he cannot figure out how to do a simple regex find + replace. He has no clue that he’s wasted a huge amount of time fiddling with Llms.
Everyone thinks AI is a cheat code to their employment video game and I’m looking for a new job now because I’m surrounded by the downfall of humanity.
Automation with AI = less time consuming especially with elaborate rule sets, but it’s a probability model so by definition it will be wrong a percentage of the time
AI automation is a high risk and the rewards are questionable at best.
Nobody ever got fired for running a profitable business with real employees, creating value for their customers and executing well. Note the word AI is NOWHERE in that sentence.
s/ROI/AGI/
It's fiction, but not really. Many companies aren't trying to run profitable businesses that create value for their customers and execute well. They're trying to make a f~*!ton of money all at once.
AI is great if you're trying to surf a bubble and cash out! You don't have to do anything real! You can lose money with an impossible financial outlook, but AGI!
Even if your buddies don't get you into a cushy position, a multi million salary for a decade or so sets you up. No tears shed.
so... "within 2 years" appears to be the runway for which we can expect a more conclusive verdict on AI investment?
I kept reading and quickly realized this entire report reads like a bunch of bull,
"94% of CEOs believe AI agents could provide equal or better counsel than human board members."
Board members hold CEOs accountable. How is an AI agent going to do that? "hey chatgpt, can I have a raise this year?"
The lack of oversight is a feature, not a bug, in this case.
Average CEO in a nutshell. CEOs should be reviled.