Compensation is usually defined more by risk/reward tradeoffs than by the amount of effort you put in. Executive pay is high because of the risk that your valu

Compensation is usually defined more by risk/reward tradeoffs than by the amount of effort you put in. Executive pay is high because of the risk that your values will not line up with the board's values at some point in the near future and hence you'll be summarily fired over something you had little control over, with your career being effectively over. It's not out-of-line with other careers that have similar risk/reward tradeoffs, like being a startup founder, pop star, hedge fund manager, venture capitalist, bestselling author, or lottery winner. I was thinking about the Gervais Principle [1] while reading this, in particular this formulation: "Sociopaths, in their own best interests, knowingly promote over-performing losers into middle-management, groom under-performing losers into sociopaths, and leave the average bare-minimum-effort losers to fend for themselves." This rather absurd strategy actually makes a lot of sense given the risk/reward tradeoffs of being an executive. Doing nothing under conditions of extreme risk & uncertainty, but doing it in a way that looks good to your superiors, is exactly the skillset that one needs to be a successful executive. And people who can do this without getting fired have passed the first test already. So this selection process is effectively an extended job interview. [1] https://www.ribbonfarm.com/2009/10/07/the-gervais-principle-or-the-office-according-to-the-office/ https://www.ribbonfarm.com/2009/10/07/the-gervais-principle-...