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Why are you assuming that money is their only incentive? It seems to me that if the promise of a golden parachute led to CEOs simply not caring if they do well
by beat 7y ago
Why are you assuming that money is their only incentive?
It seems to me that if the promise of a golden parachute led to CEOs simply not caring if they do well or not, then there'd be no point in paying them well or trying to hire the best. Heck, there'd be no measure of "best", because all the candidates would just have a string of disasters behind them.
There's an S curve to the utility of money. Anyone who works at the kind of level that could become the CEO of a company like Boeing is already quite rich. So money alone isn't the incentive. But thinking of money as sole incentive is kind of characteristic for those of us who actually have to work for a living.
- rectang 7y ago> Why are you assuming that money is their only incentive? Why are you assuming that I think money is their only incentive? I was replying to a comment contemplating that "the incentives may be correct now". The amount of money guaranteed to executives chasing short-termism provides a perverse incentive working against any desire to do their job well. There are multiple incentives, but they are not aligned. > There's an S curve to the utility of money. Seems to me that it's more like a bell curve, with the optimal center waaaay to the left of where it is today. Pay too much money and the temptation for CEOs to max out their own gains at the expense of the company's long term health rises.