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Much of the value that a CEO adds is in figuring out which rules can be broken without adverse consequences. They're accountable for results; if they raise sha

Much of the value that a CEO adds is in figuring out which rules can be broken without adverse consequences. They're accountable for results; if they raise shareholder value doing terrible things but never get caught, that's a win for shareholders, and they get to keep their position. If they do get caught, they get to be the fall guy, they resign, the board gets to say "We are shocked that such things occurred, we had no knowledge of it, the guilty parties have been sacked, and cleaning up the mess they made is a top priority for the organization." Witness Uber, Volkswagon, Boeing, and Wells Fargo. The moonlighting employee has the same options. Don't get caught. If you do get caught, you get fired, just like the CEO. This is also a good portion of why CEOs get paid so much. The average person doesn't like to inhabit the Hobbesian reality that CEOs do, where they're accountable for results and any bad things happening are automatically their fault. They want a world where if they take the right actions and follow the rules, they get some reasonable amount of security. Employment is basically a way to create an artificial island of "if you follow the rules, you get paid", at the expense of the company capturing much of the value you create. Most people take this bargain, because they value security over maximizing profit. Those who don't are always able to take the opposite side of the trade, and become an owner/executive, at the cost of being exposed to all the risks of the real world.

schnevets 5y ago
My perspective on this might be outdated, but a corporate legal team can do more than just fire you for moonlighting. Depending on your jurisdiction/contract, there could be Intellectual Property ramifications. Obviously, a C-suite can have certain sway in these situations and a company might not go after a lowly grunt's pet project, but there is a wide gap between these two situations where there are worse ramifications than losing a job.
burkaman 5y ago
This seems like a very naive perspective to me. CEOs are generally not "exposed to all the risks of the real world". If they get fired it's often with a golden parachute and the ability to live comfortably without ever worrying about money or employment. Many times, people become CEO precisely because they aren't ever exposed to real risk, and if something goes wrong they can fall back on savings or family or a debt-free prestigious degree.
- thomasz 5y ago
  Seriously. If GM goes belly up next week, who’s going to be without health insurance for the foreseeable future?
maxsilver 5y ago
> The average person doesn't like to inhabit the Hobbesian reality that CEOs do, where they're accountable for results and any bad things happening are automatically their fault Does this actually happen though? I'm not sure I've ever seen a President or CEO of a company be held accountable for bad behavior or bad decisions in any meaningful way. Best case scenario, you mess up and get "fired" (with a million-dollar-or-more severance/contract payment attached, or similar in stocks -- enough cash paid out that you can basically retire for life). Worst case scenario, seems to be that you get hauled in front of Congress to answer questions and/or get teased on the internet for a few days -- stuff that has almost no lasting effect.
- NoGravitas 5y ago
  I'd say the Golden Parachute is closer to worst case. Best case is "failing upward", like so many of these Upper Class Twit of the Year candidates seem to do.
- handrous 5y ago
  This is similar to why the argument that capitalists are due returns because they take on risk doesn't move me. Please, give me the "risk" of having somewhat-fewer millions in the bank. I'll take on all that risk. For free! Meanwhile workers will be in deep shit if their company goes under and they don't find something else ASAP. Risk, indeed. The absolute worst-case scenario is that they might have to work for a living? Oh my, what horror. This isn't to say that investors shouldn't make money, I just find this (often presented as) quasi-moral justification for it absurd.
  - nostrademons 5y ago
    > Please, give me the "risk" of having somewhat-fewer millions in the bank. I'll take on all that risk. For free! Why aren't you founding a company, then? Or a cryptocurrency token, or selling NFTs? Or leveraging up to become a landlord on borrowed money? Or hobnobbing with executive recruiters and VCs while setting yourself up as a thought leader? Or raising capital for a hedge fund? These are all things you can do right now, with potentially (but risky) multi-million-$ payoffs. For many of them you don't even need to quit your day job - your employment contract might say otherwise, but the actual work involved can be done on your downtime without them knowing. For most people, the real reason they don't do this is because they're uncomfortable with it. They don't want to inhabit a world of secrets, lies, non-aligned interests, and risk, so they take a job that lets them ignore all that and get paid for doing a specific task according to the specifications of their boss.

schnevets 5y ago

My perspective on this might be outdated, but a corporate legal team can do more than just fire you for moonlighting. Depending on your jurisdiction/contract, there could be Intellectual Property ramifications. Obviously, a C-suite can have certain sway in these situations and a company might not go after a lowly grunt's pet project, but there is a wide gap between these two situations where there are worse ramifications than losing a job.

burkaman 5y ago

This seems like a very naive perspective to me. CEOs are generally not "exposed to all the risks of the real world". If they get fired it's often with a golden parachute and the ability to live comfortably without ever worrying about money or employment. Many times, people become CEO precisely because they aren't ever exposed to real risk, and if something goes wrong they can fall back on savings or family or a debt-free prestigious degree.

thomasz 5y ago
Seriously. If GM goes belly up next week, who’s going to be without health insurance for the foreseeable future?

maxsilver 5y ago

> The average person doesn't like to inhabit the Hobbesian reality that CEOs do, where they're accountable for results and any bad things happening are automatically their fault Does this actually happen though? I'm not sure I've ever seen a President or CEO of a company be held accountable for bad behavior or bad decisions in any meaningful way. Best case scenario, you mess up and get "fired" (with a million-dollar-or-more severance/contract payment attached, or similar in stocks -- enough cash paid out that you can basically retire for life). Worst case scenario, seems to be that you get hauled in front of Congress to answer questions and/or get teased on the internet for a few days -- stuff that has almost no lasting effect.

NoGravitas 5y ago
I'd say the Golden Parachute is closer to worst case. Best case is "failing upward", like so many of these Upper Class Twit of the Year candidates seem to do.
handrous 5y ago
This is similar to why the argument that capitalists are due returns because they take on risk doesn't move me. Please, give me the "risk" of having somewhat-fewer millions in the bank. I'll take on all that risk. For free! Meanwhile workers will be in deep shit if their company goes under and they don't find something else ASAP. Risk, indeed. The absolute worst-case scenario is that they might have to work for a living? Oh my, what horror. This isn't to say that investors shouldn't make money, I just find this (often presented as) quasi-moral justification for it absurd.
- nostrademons 5y ago
  > Please, give me the "risk" of having somewhat-fewer millions in the bank. I'll take on all that risk. For free! Why aren't you founding a company, then? Or a cryptocurrency token, or selling NFTs? Or leveraging up to become a landlord on borrowed money? Or hobnobbing with executive recruiters and VCs while setting yourself up as a thought leader? Or raising capital for a hedge fund? These are all things you can do right now, with potentially (but risky) multi-million-$ payoffs. For many of them you don't even need to quit your day job - your employment contract might say otherwise, but the actual work involved can be done on your downtime without them knowing. For most people, the real reason they don't do this is because they're uncomfortable with it. They don't want to inhabit a world of secrets, lies, non-aligned interests, and risk, so they take a job that lets them ignore all that and get paid for doing a specific task according to the specifications of their boss.