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We're talking about incentives. Sky-high executive compensation packages don't encourage people to do a better job — they insulate them from failure, thereby d
by rectang 7y ago
We're talking about incentives. Sky-high executive compensation packages don't encourage people to do a better job — they insulate them from failure, thereby disincentivizing them and encouraging them to go down the path of short-termism.
- shantly 7y agoIncentives and punishments only matter for little people. With the rich and powerful, of course they'll do a good job because they simply like doing a good job. ... is apparently the argument. I mean, see also: drug tests for the minimum wage workers, but the CEO? Of course not. Mere employees better not be moonlighting or doing anything else, but the CEO? On two other boards, "advising" a startup on the side, working on another part-time (also as CEO—their "executive assistant" at their 20-person startup actually runs the company)
- Xixi 7y agoInsulating CEOs and executive from failure is a good way to push them to take more risks, if that's what the board/shareholders want. The issue with the 737MAX is that Boeing was too risk-averse: they should have made a brand new plane, but went with what they thought was the low-risk route with the 737 re-engine. The 787 disastrous development ($36B of deferred production costs I think) was certainly a huge cause of this.
- somurzakov 7y agoit is unbelievable that the was MAX considered a low-risk in terms of selling planes, but ended up huge risk in technical perspective. if they just stuck to evaluating technical risk first, and only then the risk of selling the plane - perhaps that route would have led them to developing a new completely plane.