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I am reminded of Sagan's standard "Extraordinary claims require extraordinary evidence" Has been there been any detailed breakdown of how much more effective t

I am reminded of Sagan's standard "Extraordinary claims require extraordinary evidence" Has been there been any detailed breakdown of how much more effective the median CEO in 2020 is over the median executive in 1970? I am certain they are doing things better, have more data, etc but what scale are we really looking at here? Because, just thinking out loud here, the bulk of the workforce in the United States is more educated and has more hard skills than their predecessors did in 1970s. Firms demanded technology skills, for which they provided little or no training, and their workforce was able to acquire the necessary skills.. and yet the "upside" was nothing more than possibly being able to keep their job.

robertlagrant 6y ago
First demonstrate that it's an extraordinary claim. Effectiveness isn't the measure, exactly, it's how replaceable the CEO is, and the same is true of any employee. If everyone is more educated (and education may be nothing to do with what's required, incidentally), then people are still just as replaceable. I have no good answers, as I definitely think there are pros and cons to modern executive teams, but it starts with replaceability.
- jonathankoren 6y ago
  You're in luck! This study has been done[0]... repeatedly. CEOs since 1978 have been found lacking. Think about it. CEO compensation has gone up 970% since then.[1] The key takeaway is that that boards set the compensation based on the average compensation CEOs at peer companies, but performance isn't equally distributed. Essentially, the highest performing CEOs pull up the mean, and so the average and below average CEO compensation goes up. [0] https://www.wsj.com/articles/ceo-pay-and-performance-dont-match-up-1526299200 https://www.wsj.com/articles/ceo-pay-and-performance-dont-ma... [1] https://www.epi.org/publication/ceo-compensation-2018/ https://www.epi.org/publication/ceo-compensation-2018/
- dlp211 6y ago
  I would assert that CEOs are far more replaceable then they would have you believe.
LoSboccacc 6y ago
It's not the CEO that became more effective tho, it's the money. You can't do a Tesla without PayPal exit level of money, you can't do a PayPal without zip2 exit money and you can't make a zip2 without a real estate agent footing the initial bills It's financial levers all the way down
neutronicus 6y ago
Maybe people only listen to decision makers who make a fuckton of money, and maybe the effect has grown over time (like the Placebo effect). In that case even if all CEOs are equivalent getting hired is a lottery ticket

robertlagrant 6y ago

First demonstrate that it's an extraordinary claim. Effectiveness isn't the measure, exactly, it's how replaceable the CEO is, and the same is true of any employee. If everyone is more educated (and education may be nothing to do with what's required, incidentally), then people are still just as replaceable. I have no good answers, as I definitely think there are pros and cons to modern executive teams, but it starts with replaceability.

jonathankoren 6y ago
You're in luck! This study has been done[0]... repeatedly. CEOs since 1978 have been found lacking. Think about it. CEO compensation has gone up 970% since then.[1] The key takeaway is that that boards set the compensation based on the average compensation CEOs at peer companies, but performance isn't equally distributed. Essentially, the highest performing CEOs pull up the mean, and so the average and below average CEO compensation goes up. [0] https://www.wsj.com/articles/ceo-pay-and-performance-dont-match-up-1526299200 https://www.wsj.com/articles/ceo-pay-and-performance-dont-ma... [1] https://www.epi.org/publication/ceo-compensation-2018/ https://www.epi.org/publication/ceo-compensation-2018/
dlp211 6y ago
I would assert that CEOs are far more replaceable then they would have you believe.

LoSboccacc 6y ago

It's not the CEO that became more effective tho, it's the money. You can't do a Tesla without PayPal exit level of money, you can't do a PayPal without zip2 exit money and you can't make a zip2 without a real estate agent footing the initial bills It's financial levers all the way down

neutronicus 6y ago

Maybe people only listen to decision makers who make a fuckton of money, and maybe the effect has grown over time (like the Placebo effect). In that case even if all CEOs are equivalent getting hired is a lottery ticket