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Say I start building a house. I realize I can't do it all by myself, so I get other people to do all the labor involved in building it. All the while providing

Say I start building a house. I realize I can't do it all by myself, so I get other people to do all the labor involved in building it. All the while providing all the details, instructions, and architectural guidelines to get a good finished product. Not to mention sourcing the materials required, getting the plans approved by the city, and making sure that on-sight construction passes inspection by the city. Who "owes" most of the success in building the house? The labor, or the person employing the labor productively? Edit: Just to clarify. I genuinely don't know who should get credit for the success of building a house. Both are almost equally as important. However I can say that it seems, maybe, possibly that labor collectively is as important as the single person making all the decision. That is no single laborer is as important as the person trying to get the building made.

dangerlibrary 9y ago
That's not really a good analogy for a CEO's job, though. A CEO's job would be someone who makes a small number of very broad, directional choices (should the home be Victorian, or Brutalist?) then hires and manages a team of people to hire and manage teams of people to hire and manage teams of people to build a house. Given that the only decision they made was "Victorian vs Brutalist" and then hiring some decent managers, should they still receive that much compensation just for (in this case!) happening to have made the right choice?
chasing 9y ago
Aetna's CEO is an employee of Aetna. So in your tale he's part of the labor, not the person who wants a house built.
- Cshelton 9y ago
  Typically high level executives are required to buy a certain number of shares in the company. That's not including the options earned, but actual shares they have to buy. Now yes, much of the time, the shares they have to buy are options they have to exercise, but in the end, the stakeholders always want to see the decision makers have skin in the game. So yes, the CEO is an owner as well.
- bkanber 9y ago
  Aetna's CEO is not an employee of Aetna, he is an Officer of the corporation.
Cshelton 9y ago
To add to that: Would the house ever be built at all if not for the person employing the labor to build it? Great analogy for a company too. Whether it's a start up or growing a large company to be even larger. There is no automatic force that just makes a company grow, innovate, grab market share. Things don't just happen without the leadership and direction from the top.
untog 9y ago
Comparisons like this inevitably break down at some point. I'm not at all convinced that the Aetna CEO does whatever the equivalent of sourcing materials does in their business. Architectural guidelines? Sure. "All details"? Almost definitely not. Even taking your example at face value, I don't agree with it. The house wouldn't exist without either labourers or the planner. They are both vital. But in the Aetna situation, only one is rewarded.
- thevardanian 9y ago
  A CEO is responsible for the products that they make. In the case of any company really you have to deal with various professionals, the City, and laborers to make a product. I think it's fair to say that no single laborer, it seems, is as important in the process of production than the person making all the decisions to employ labor to some final product.
  - untog 9y ago
    But the CEO doesn't make all the decisions. Like I said, the comparison doesn't really work. Aetna isn't one CEO and 50,000 labourers, it has an entire corporate chain of command.
    - thevardanian 9y ago
      Building a house isn't just one person ordeal either. It's a simplistic model in either case. A CEO for all intents and purposes does make all the decision in the same sense that any leader in most any circumstance makes "all the decisions". Even a company Commander in the military doesn't "make all the decisions", however they are most definitely responsible for all the decision they make for themselves and for their company. Hell even at the very top the Commander in Chief doesn't make "all the decision".

dangerlibrary 9y ago

That's not really a good analogy for a CEO's job, though. A CEO's job would be someone who makes a small number of very broad, directional choices (should the home be Victorian, or Brutalist?) then hires and manages a team of people to hire and manage teams of people to hire and manage teams of people to build a house. Given that the only decision they made was "Victorian vs Brutalist" and then hiring some decent managers, should they still receive that much compensation just for (in this case!) happening to have made the right choice?

chasing 9y ago

Aetna's CEO is an employee of Aetna. So in your tale he's part of the labor, not the person who wants a house built.

Cshelton 9y ago
Typically high level executives are required to buy a certain number of shares in the company. That's not including the options earned, but actual shares they have to buy. Now yes, much of the time, the shares they have to buy are options they have to exercise, but in the end, the stakeholders always want to see the decision makers have skin in the game. So yes, the CEO is an owner as well.
bkanber 9y ago
Aetna's CEO is not an employee of Aetna, he is an Officer of the corporation.

Cshelton 9y ago

To add to that: Would the house ever be built at all if not for the person employing the labor to build it? Great analogy for a company too. Whether it's a start up or growing a large company to be even larger. There is no automatic force that just makes a company grow, innovate, grab market share. Things don't just happen without the leadership and direction from the top.

untog 9y ago

Comparisons like this inevitably break down at some point. I'm not at all convinced that the Aetna CEO does whatever the equivalent of sourcing materials does in their business. Architectural guidelines? Sure. "All details"? Almost definitely not. Even taking your example at face value, I don't agree with it. The house wouldn't exist without either labourers or the planner. They are both vital. But in the Aetna situation, only one is rewarded.

thevardanian 9y ago
A CEO is responsible for the products that they make. In the case of any company really you have to deal with various professionals, the City, and laborers to make a product. I think it's fair to say that no single laborer, it seems, is as important in the process of production than the person making all the decisions to employ labor to some final product.
- untog 9y ago
  But the CEO doesn't make all the decisions. Like I said, the comparison doesn't really work. Aetna isn't one CEO and 50,000 labourers, it has an entire corporate chain of command.
  - thevardanian 9y ago
    Building a house isn't just one person ordeal either. It's a simplistic model in either case. A CEO for all intents and purposes does make all the decision in the same sense that any leader in most any circumstance makes "all the decisions". Even a company Commander in the military doesn't "make all the decisions", however they are most definitely responsible for all the decision they make for themselves and for their company. Hell even at the very top the Commander in Chief doesn't make "all the decision".