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Both of your points are symptoms of the problem that CEOs are vastly overpaid. People are too picky choosing CEOs because they falsely believe that CEOs' high

Both of your points are symptoms of the problem that CEOs are vastly overpaid. People are too picky choosing CEOs because they falsely believe that CEOs' high pay correlates to a large difference in performance from regular peasants. The truth is that many, many people could do a CEO's job. Everyone makes mistakes, this CEO's colossal mistakes are case-in-point. If we stopped falsely believing that CEO's are magical superhuman lords in a world of serfs we would reduce their pay. Switching costs would reduce dramatically. So would our intolerance for mistakes that are naturally part of the human predicament.

smallgovt 9y ago
> Both of your points are symptoms of the problem that CEOs are vastly overpaid. How so? I fail to see how even if he was overpaid, either of my points are caused by (i.e. are symptyoms of) him being overpaid. > People are too picky choosing CEOs because they falsely believe that CEOs' high pay correlates to a large difference in performance from regular peasants. The truth is that many, many people could do a CEO's job. Everyone makes mistakes, this CEO's colossal mistakes are case-in-point. Based on what evidence? To make this conclusion, you need to compare the quantity and quality of mistakes made by current CEO's and would-be "peasant" replacements. I find it hard to believe you have a factual basis for estimating the types of mistakes your supposed replacement would make. If you better understand what these CEO's do, I think you'll find the # of ppl who can ACTUALLY do their job is quite small, and it certainly doesn't include "regular peasants" or "many, many people". Furthermore, these companies have hug market caps. If the optimal CEO generates 1% more company value than his best alternative, it's more than worth the tens of millions he's being paid.

smallgovt 9y ago

> Both of your points are symptoms of the problem that CEOs are vastly overpaid. How so? I fail to see how even if he was overpaid, either of my points are caused by (i.e. are symptyoms of) him being overpaid. > People are too picky choosing CEOs because they falsely believe that CEOs' high pay correlates to a large difference in performance from regular peasants. The truth is that many, many people could do a CEO's job. Everyone makes mistakes, this CEO's colossal mistakes are case-in-point. Based on what evidence? To make this conclusion, you need to compare the quantity and quality of mistakes made by current CEO's and would-be "peasant" replacements. I find it hard to believe you have a factual basis for estimating the types of mistakes your supposed replacement would make. If you better understand what these CEO's do, I think you'll find the # of ppl who can ACTUALLY do their job is quite small, and it certainly doesn't include "regular peasants" or "many, many people". Furthermore, these companies have hug market caps. If the optimal CEO generates 1% more company value than his best alternative, it's more than worth the tens of millions he's being paid.