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> First of all a rational actor will not intentionally pay a worker the value of their production; you get no profit. The sum of the production of workers is n

by typ 6y ago

> First of all a rational actor will not intentionally pay a worker the value of their production; you get no profit. The sum of the production of workers is not equal to the production of a business. Otherwise, if a business increases revenues significantly by simply replacing its CEO, does it mean that the CEO contributes to the increased revenue all alone?

aidenn0 6y ago
The CEO probably was able to increase per-worket productivity. With the possible exception of lights-out facilities, the sum of the production of workers is equal to the production of a business, and even with lights out facilities, you would attribute the production of the facilities to those who build and maintain them.
IncRnd 6y ago
The selection of a CEO absolutely contributes to the benefit or detriment of revenue.
- TheOtherHobbes 6y ago
  But not in a way that scales linearly with CEO pay.
  - IncRnd 6y ago
    Yet, I have stock in companies whose stock massively increased after a new CEO. The stock never rose above a certain point for years, until the new CEO made it drastically rise. The workers seemingly did nothing different, yet the CEO made tweaks here and there and crafted communications in specific ways. A good CEO is absolutely invaluable.
    - quadrangle 6y ago
      Stock price ≠ productivity
      - IncRnd 6y ago
        Stock price = company value of a publicly traded company. A CEO differs from a General Manager. "A chief executive officer (CEO) is the highest-ranking executive in a company, whose primary responsibilities include making major corporate decisions, managing the overall operations and resources of a company, acting as the main point of communication between the board of directors (the board) and corporate operations and being the public face of the company. A CEO is elected by the board and its shareholders." ~ https://www.investopedia.com/terms/c/ceo.asp https://www.investopedia.com/terms/c/ceo.asp "A general manager (GM) is in charge of part or all of a company's operations, including generating revenue and controlling costs." ~ https://www.investopedia.com/terms/g/general-manager.asp https://www.investopedia.com/terms/g/general-manager.asp

by typ 6y ago

aidenn0 6y ago

The CEO probably was able to increase per-worket productivity. With the possible exception of lights-out facilities, the sum of the production of workers is equal to the production of a business, and even with lights out facilities, you would attribute the production of the facilities to those who build and maintain them.

IncRnd 6y ago

The selection of a CEO absolutely contributes to the benefit or detriment of revenue.

TheOtherHobbes 6y ago
But not in a way that scales linearly with CEO pay.
- IncRnd 6y ago
  Yet, I have stock in companies whose stock massively increased after a new CEO. The stock never rose above a certain point for years, until the new CEO made it drastically rise. The workers seemingly did nothing different, yet the CEO made tweaks here and there and crafted communications in specific ways. A good CEO is absolutely invaluable.
  - quadrangle 6y ago
    Stock price ≠ productivity
    - IncRnd 6y ago
      Stock price = company value of a publicly traded company. A CEO differs from a General Manager. "A chief executive officer (CEO) is the highest-ranking executive in a company, whose primary responsibilities include making major corporate decisions, managing the overall operations and resources of a company, acting as the main point of communication between the board of directors (the board) and corporate operations and being the public face of the company. A CEO is elected by the board and its shareholders." ~ https://www.investopedia.com/terms/c/ceo.asp https://www.investopedia.com/terms/c/ceo.asp "A general manager (GM) is in charge of part or all of a company's operations, including generating revenue and controlling costs." ~ https://www.investopedia.com/terms/g/general-manager.asp https://www.investopedia.com/terms/g/general-manager.asp