7 ms·

What really chaps my hide is that failing CEO's still get large benefits of one form or another. If a regular Joe fails, they usually get the boot and little el

by tabtab 7y ago

What really chaps my hide is that failing CEO's still get large benefits of one form or another. If a regular Joe fails, they usually get the boot and little else. If money is incentive to make people more productive, why pay them to fail? Is meritocracy only for the poor? Some co's wised up to this and pay mostly in company stock. But CEO's then initiate buy-back programs to jack up the stock price.

harryh 7y ago
I CEO of a large public company who fails is likely to end up with a ruined career. Exit packages compensate for that risk.
- MiroF 7y ago
  But that's not how it works at all? They almost always get a very good C-suite job after and remain on boards with influence
- dajohnson89 7y ago
  Average joe getting terminated from a job will not receive references from that employer. References are critical part of most professional interview process.
- rootusrootus 7y ago
  Does that really happen? The CEO of my company left his last company in disgrace. His 'ruined career' means he makes 15M a year instead of 20M. I need that kind of 'ruined career'
  - scruple 7y ago
    Same here. In fact, the very Googleable person that I call CEO today took > $5 million in severance from the last 2 companies he fucked up. I've been hearing this story my entire life, now I have the privilege to be old enough to see it first hand. What a treat.
- dragonwriter 7y ago
  > CEO of a large public company who fails is likely to end up with a ruined career. Except for the ones that go to prison, that doesn't really seem to happen; people who fail as CEOs tend to turn up in very well compensated executive (not necessarily, but still often, chief executive) positions elsewhere. The executive class that populates boards and C-suites (and overlaps significantly with the major investor class for whom ultimately boards and C-Suites work) is heavily networked and anyone who fails in a mere job in that class usually had plenty of connections willing to help them get another similar one largely independent of merit.
- minikites 7y ago
  Really? When has that happened? https://en.wikipedia.org/wiki/Tony_Hayward https://en.wikipedia.org/wiki/Tony_Hayward >Anthony Bryan Hayward is a British businessman and former chief executive of oil and energy company BP. His tenure ended on 1 October 2010 when he was replaced by Bob Dudley following the Deepwater Horizon oil spill. He has been chairman of Glencore Xstrata since May 2014. https://en.wikipedia.org/wiki/John_Legere https://en.wikipedia.org/wiki/John_Legere >John Legere (born June 4, 1958) is an American businessman who is the chief executive officer and former president of T-Mobile US. His leadership at Global Crossing was controversial, which included large executive bonuses and filing for bankruptcy.
  - wang_li 7y ago
    >Really? When has that happened? If you're talking on the scale of a non-founder CEO who is making $15 million per year, it happens all the time. There just aren't that many public companies that pay that much. The headline in this story comes from an analysis of the 350 largest publicly traded companies. A fired CEO can't just go down the street and find another $15+ million dollar salary ruining another company. Two examples would be Melissa Meyer and Ellen Pao. Both of whom are basically unemployable outside of board memberships.
    - freeone3000 7y ago
      "outside of board memberships", that six-figure sinecure with two annual meetings and a rubber stamp? Heaven forbid they be forced to stoop to THAT level.
      - wang_li 7y ago
        But they're not six-figure salaries.According to [1] average base pay is $25,000. Bigger companies do pay more, into the $200,000 range, but it's not like failed CEOs are asked to join boards of huge companies. 1. https://work.chron.com/director-corporate-board-paid-19587.html https://work.chron.com/director-corporate-board-paid-19587.h...
    - armSixtyFour 7y ago
- JustSomeNobody 7y ago
  >I CEO of a large public company who fails is likely to end up with a ruined career. So might Joe worker. Where's his compensation package?
- tabtab 7y ago
  Re: "CEO...who fails is likely to end up with a ruined career." Maybe as a future CEO, but I'm sure they'll have plenty of offers for upper-middle management and still be in the 5% to 1%. They may have to sell half their beemers or something, the horror.
- foobiekr 7y ago
  When we were interviewing CEOs for my company, one of the things that surprised me was the interesting set of backgrounds we encountered. One, for example, had previously pled guilty to a federal indictment. We didn't hire him, and he went on to be CEO of another startup. I think the CEO career risk, excepting gratuitously bad behavior at the wrong time (see Mark Hurd), is actually quite low and very, very overstated.
rconti 7y ago
Agreed. There are a lot of great studies out there that show why great-performing CEOs really are worth the money-- GREAT! But then the flip side of it is, in order to attract those great CEOs, you need a comp package that looks generous enough, which includes de-risking their decision to join your company. I wish there was a good enforcement mechanism to tie their pay to performance -- for good AND bad.
- MiroF 7y ago
  Source? reminder that CEO pay is negatively correlated with company success (https://www.wsj.com/articles/best-paid-ceos-run-some-of-worst-performing-companies-1469419262 https://www.wsj.com/articles/best-paid-ceos-run-some-of-wors...)
  - dragonwriter 7y ago
    If you assume CEOs are basically success signalling devices without active influence on success whose prestige (and thus, the success they signal) is harmed by association with failure, that makes sense: the added pay is compensation for harm to prestige.
    - MiroF 7y ago
      Yes that would probably explain the negative correlation. That said, if good CEOs actually controlled the direction of the company and were compensated higher to attract talent - I would expect that to override the negative effect for a net positive. Since that's not the case, I think as you suggest that CEOs are "without active influence on success"
- agilebyte 7y ago
  When hiring for a CEO a company that offers negative reinforcement linked to performance will lose out against a company that'll promise you the moon regardless of the performance. It's the CEOs that have their pick.
- mars4rp 7y ago
  the bad is not possible, if a CEO make a decision with a chance of 50/50 being a good or bad decision. if it is a good decision CEO makes lots of money, if it is bad they get 0. that is not a good thing, out of 2 monkeys throwing darts one of them will make money.
MiroF 7y ago
> Is meritocracy only for the poor? Isn't it obvious that's how our society is structured? The success of the sons and daughters of the hyper-affluent is non-negotiable - they'll get fancy jobs through family friends and continue making bank without being very competent. Those at the bottom, if they work really really hard, might be able to join them
- ravenstine 7y ago
  Seems like a self-imposed version of the Dilbert Principle.
- ccarse 7y ago
  I'd argue that's how every society ever has been structured. We have an innate desire to see our children succeed.
EliRivers 7y ago
Meritocracy is the lie poor people are told so they don't get uppity about where all the wealth is going. So in a way, yes, meritocracy is only for the poor.
UncleMeat 7y ago
Even the poor don't have a meritocracy. Plenty of meritorious people have otherwise been screwed by lead paint, abusive landlords, terrible teachers, imbalanced policing, hiring bias, and more.
rhizome 7y ago
Meritocracy is like race: a myth. It doesn't exist. It's different groups of people split along arbitrary societal boundaries, decided by people with poor ethics and conflicts of interest. After all, nepotism isn't illegal, it takes many forms, and it just so happens to explain a whole lot about the distribution of resources and opportunities. Back before she fell off the deep end, Roseanne had one of the most insightful lines I had ever come across: "The object of business is to keep your buddies working, even if they’re fuckin’ idiots." Keep this in mind and the world makes a lot more sense. https://classic.esquire.com/article/2001/3/1/what-ive-learned-roseanne https://classic.esquire.com/article/2001/3/1/what-ive-learne...
- MiroF 7y ago
  Well that article is really from a different time. > The wife is the one who serves. But she is also the one who rules. It’s weird, because you have to stay humble and be strong all at the same time. The husband? He serves, too, only in a different way. And he protects. Just like the LAPD. Even the reference to the LAPD in what seems to be a (positive?) light
  - rhizome 7y ago
    Well it's still Roseanne, but I'm not endorsing the whole thing.
    - MiroF 7y ago
      fair re roseanne

by tabtab 7y ago

harryh 7y ago

I CEO of a large public company who fails is likely to end up with a ruined career. Exit packages compensate for that risk.

MiroF 7y ago
But that's not how it works at all? They almost always get a very good C-suite job after and remain on boards with influence
dajohnson89 7y ago
Average joe getting terminated from a job will not receive references from that employer. References are critical part of most professional interview process.
rootusrootus 7y ago
Does that really happen? The CEO of my company left his last company in disgrace. His 'ruined career' means he makes 15M a year instead of 20M. I need that kind of 'ruined career'
- scruple 7y ago
  Same here. In fact, the very Googleable person that I call CEO today took > $5 million in severance from the last 2 companies he fucked up. I've been hearing this story my entire life, now I have the privilege to be old enough to see it first hand. What a treat.
dragonwriter 7y ago
> CEO of a large public company who fails is likely to end up with a ruined career. Except for the ones that go to prison, that doesn't really seem to happen; people who fail as CEOs tend to turn up in very well compensated executive (not necessarily, but still often, chief executive) positions elsewhere. The executive class that populates boards and C-suites (and overlaps significantly with the major investor class for whom ultimately boards and C-Suites work) is heavily networked and anyone who fails in a mere job in that class usually had plenty of connections willing to help them get another similar one largely independent of merit.
minikites 7y ago
Really? When has that happened? https://en.wikipedia.org/wiki/Tony_Hayward https://en.wikipedia.org/wiki/Tony_Hayward >Anthony Bryan Hayward is a British businessman and former chief executive of oil and energy company BP. His tenure ended on 1 October 2010 when he was replaced by Bob Dudley following the Deepwater Horizon oil spill. He has been chairman of Glencore Xstrata since May 2014. https://en.wikipedia.org/wiki/John_Legere https://en.wikipedia.org/wiki/John_Legere >John Legere (born June 4, 1958) is an American businessman who is the chief executive officer and former president of T-Mobile US. His leadership at Global Crossing was controversial, which included large executive bonuses and filing for bankruptcy.
- wang_li 7y ago
  >Really? When has that happened? If you're talking on the scale of a non-founder CEO who is making $15 million per year, it happens all the time. There just aren't that many public companies that pay that much. The headline in this story comes from an analysis of the 350 largest publicly traded companies. A fired CEO can't just go down the street and find another $15+ million dollar salary ruining another company. Two examples would be Melissa Meyer and Ellen Pao. Both of whom are basically unemployable outside of board memberships.
  - freeone3000 7y ago
    "outside of board memberships", that six-figure sinecure with two annual meetings and a rubber stamp? Heaven forbid they be forced to stoop to THAT level.
    - wang_li 7y ago
      But they're not six-figure salaries.According to [1] average base pay is $25,000. Bigger companies do pay more, into the $200,000 range, but it's not like failed CEOs are asked to join boards of huge companies. 1. https://work.chron.com/director-corporate-board-paid-19587.html https://work.chron.com/director-corporate-board-paid-19587.h...
  - armSixtyFour 7y ago
JustSomeNobody 7y ago
>I CEO of a large public company who fails is likely to end up with a ruined career. So might Joe worker. Where's his compensation package?
tabtab 7y ago
Re: "CEO...who fails is likely to end up with a ruined career." Maybe as a future CEO, but I'm sure they'll have plenty of offers for upper-middle management and still be in the 5% to 1%. They may have to sell half their beemers or something, the horror.
foobiekr 7y ago
When we were interviewing CEOs for my company, one of the things that surprised me was the interesting set of backgrounds we encountered. One, for example, had previously pled guilty to a federal indictment. We didn't hire him, and he went on to be CEO of another startup. I think the CEO career risk, excepting gratuitously bad behavior at the wrong time (see Mark Hurd), is actually quite low and very, very overstated.

rconti 7y ago

Agreed. There are a lot of great studies out there that show why great-performing CEOs really are worth the money-- GREAT! But then the flip side of it is, in order to attract those great CEOs, you need a comp package that looks generous enough, which includes de-risking their decision to join your company. I wish there was a good enforcement mechanism to tie their pay to performance -- for good AND bad.

MiroF 7y ago
Source? reminder that CEO pay is negatively correlated with company success (https://www.wsj.com/articles/best-paid-ceos-run-some-of-worst-performing-companies-1469419262 https://www.wsj.com/articles/best-paid-ceos-run-some-of-wors...)
- dragonwriter 7y ago
  If you assume CEOs are basically success signalling devices without active influence on success whose prestige (and thus, the success they signal) is harmed by association with failure, that makes sense: the added pay is compensation for harm to prestige.
  - MiroF 7y ago
    Yes that would probably explain the negative correlation. That said, if good CEOs actually controlled the direction of the company and were compensated higher to attract talent - I would expect that to override the negative effect for a net positive. Since that's not the case, I think as you suggest that CEOs are "without active influence on success"
agilebyte 7y ago
When hiring for a CEO a company that offers negative reinforcement linked to performance will lose out against a company that'll promise you the moon regardless of the performance. It's the CEOs that have their pick.
mars4rp 7y ago
the bad is not possible, if a CEO make a decision with a chance of 50/50 being a good or bad decision. if it is a good decision CEO makes lots of money, if it is bad they get 0. that is not a good thing, out of 2 monkeys throwing darts one of them will make money.

MiroF 7y ago

> Is meritocracy only for the poor? Isn't it obvious that's how our society is structured? The success of the sons and daughters of the hyper-affluent is non-negotiable - they'll get fancy jobs through family friends and continue making bank without being very competent. Those at the bottom, if they work really really hard, might be able to join them

ravenstine 7y ago
Seems like a self-imposed version of the Dilbert Principle.
ccarse 7y ago
I'd argue that's how every society ever has been structured. We have an innate desire to see our children succeed.

EliRivers 7y ago

Meritocracy is the lie poor people are told so they don't get uppity about where all the wealth is going. So in a way, yes, meritocracy is only for the poor.

UncleMeat 7y ago

Even the poor don't have a meritocracy. Plenty of meritorious people have otherwise been screwed by lead paint, abusive landlords, terrible teachers, imbalanced policing, hiring bias, and more.

rhizome 7y ago

Meritocracy is like race: a myth. It doesn't exist. It's different groups of people split along arbitrary societal boundaries, decided by people with poor ethics and conflicts of interest. After all, nepotism isn't illegal, it takes many forms, and it just so happens to explain a whole lot about the distribution of resources and opportunities. Back before she fell off the deep end, Roseanne had one of the most insightful lines I had ever come across: "The object of business is to keep your buddies working, even if they’re fuckin’ idiots." Keep this in mind and the world makes a lot more sense. https://classic.esquire.com/article/2001/3/1/what-ive-learned-roseanne https://classic.esquire.com/article/2001/3/1/what-ive-learne...

MiroF 7y ago
Well that article is really from a different time. > The wife is the one who serves. But she is also the one who rules. It’s weird, because you have to stay humble and be strong all at the same time. The husband? He serves, too, only in a different way. And he protects. Just like the LAPD. Even the reference to the LAPD in what seems to be a (positive?) light
- rhizome 7y ago
  Well it's still Roseanne, but I'm not endorsing the whole thing.
  - MiroF 7y ago
    fair re roseanne