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It's clearly possible for CEOs to be worth the sort of money they get paid. E.g. Steve Jobs. If I had started a company and wanted to retire, and was looking
by pg 16y ago
It's clearly possible for CEOs to be worth the sort of money they get paid. E.g. Steve Jobs. If I had started a company and wanted to retire, and was looking to hire someone to run it for me, I would have no problem paying the right person 5% of the total revenues, or even more.
From what I've seen (and I am old enough to remember the old days), the main cause of the rise in CEO pay is that CEOs are now the equivalent of free agents in baseball.
The hedge funds are an interesting case. I'm not absolutely sure about this, but I suspect they are irrelevant, because while they don't create wealth, they don't confiscate it either, at least not in the old way.
- johnrob 16y agoIs insider trading a form of wealth confiscation? The only way banks and hedge funds can be as successful as they are is via insider trading - not in the legal sense, but in the sense that they have info that the public does not. I don't know the answer, but to me it seems more likely to fall in the confiscation category. Not an easy call.
- pg 16y agoYes, pure insider trading seems a lot like theft. But it doesn't seem likely that most hedge funds depend on it. It would be a remarkably well executed subterfuge if all those quants were just window-dressing.
- ivankirigin 16y agoWhy don't hedge funds create wealth? How do they do it less than, say, DST or any other investor?
- pg 16y agoI'm not 100% sure where investors fit in, but my current hypothesis is that "pure" investors (i.e. people who supply only money) are like armed forces: they do not themselves create wealth, though they can sometimes create an environment in which it's easier for other people to.
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