3 ms·
Isn't part of the problem the overlap between action and effect? I might join a business as CEO and it does really well for 5 years because of the previous CEO
by lbriner 6y ago
Isn't part of the problem the overlap between action and effect?
I might join a business as CEO and it does really well for 5 years because of the previous CEO, I could claim that it is my leadership and ask for my bonus.
On the other hand, maybe I do well but my successor is an idiot and makes the company tank so now I won't get my 10 year bonus because they screwed it all up.
Unless your idea only works for CEOs who are prepared to stay for 10 years? That then brings in the complication of when you need them to leave quietly because they are rubbish but you don't want your shareholders to know!
- aapppwe 6y agothis is the problem with any leadership position in general, congress, president.... etc I think the best way to address this is to provide standardize kpi monitoring.
- mason55 6y agoWhen a measure becomes a target, it ceases to be a good measure Especially for a CEO, who has quite a bit of power to optimize for any measure, it's going to be very hard to craft a measure that gives the results you want and can't be gamed. The most likely outcome is something that's just a worse version of the stock price, because the stock price is just a forward-looking approximation of net income, which is what you'd mostly want to optimize for anyway (ignoring things like B corps).