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> Presumably the CEO bring something to the table - capital, fundraising ability. I mean why else have him/her? You're so close! In fact, there's an expectatio

> Presumably the CEO bring something to the table - capital, fundraising ability. I mean why else have him/her? You're so close! In fact, there's an expectation that the more you pay a CEO, the better they perform, and that those making the most must be the best. This seems to be a largely-unexamined assumption that "just makes sense," but it turns out when you try to see whether it's true, it's not[0]. By and large, highly-paid CEOs are a drain on corporate profits. As the research paper I linked shows, even those highly-compensated CEOs who win awards end up performing worse than their non-award-winning counterparts. Everybody seems to like the idea of a CEO providing strong leadership and deserving their high compensation. The stress, they say, makes it worth it. Besides, if we didn't pay them that much, someone else would! And yet the facts don't seem to support any of that. 0. http://d1c25a6gwz7q5e.cloudfront.net/reports/2014-02-2-Armstrong-paper.pdf http://d1c25a6gwz7q5e.cloudfront.net/reports/2014-02-2-Armst...

refurb 4y ago
Why did you completely ignore the capital part I talked about? Instead of raising $10M for a business through a CEO (either their own money or through road shows), there is nothing stopping a company of 100 employees from ponying up $100,000 of their own money and reaping a share of the rewards (or losing it all). Are you really that surprised that workers prefer a risk-free salary instead? I mean I have the option of taking cash or equity at my company and I turn down the equity every time. I don't begrudge the ones who take the risk and make 10x what I do. I'll be honest, you don't seem to understand how businesses work today - you're working from a flawed understanding.
- pwinnski 4y ago
  So one of us produced a link to supporting research, and other produced hypotheticals and dismissive insults. Okay.
onlyrealcuzzo 4y ago
> By and large, highly-paid CEOs are a drain on corporate profits. As the research paper I linked shows, even those highly-compensated CEOs who win awards end up performing worse than their non-award-winning counterparts. You're forgetting who decides CEO pay - the board / shareholders. They are aware of this. And despite that, they keep these pay packages. Is it fair? I dunno. I personally don't think CEO's should be getting paid what they do. Does anyone care? No. Is anyone's salary fair? I dunno. If you distribute the CEO's pay to the rest of the company it wouldn't materially impact average workers wages (less than a 1% increase) - except in rare cases (less than 5% of large companies). Why should I get raged out that my CEO makes $100M+ per year? If you distribute that to everyone at the company - it's not even a 1% increase. There's much easier ways I can make 1% more money... It's really not worth discussing except in rare cases - and those are exceptions that don't change the larger picture.
- pwinnski 4y ago
  Instead of focusing on distributing CEO pay to the rest of the company--where I think your math is off--consider things like annual bonuses for employees that are affected by company performance. Something like "you get $20k, or a little less if you or the company is doing poorly, or a little more if you and the company are doing well." Pretty common among developers. When those come in at 90% or 95% of target based on company performance, and yet the CEO still takes home tens of millions, that's when what seems like a tiny thing on a raw number basis, a matter of $2k for a single employee, can seem like a large thing. As an employee who performed well is still feeling the impact of company performance that fell short of expectations, probably on the basis of nothing the employee did, probably more attributably to the CEO (who helped set the expectations, and is more likely to have had a material impact on the result), it's natural for employees to at least wonder why the impact seems to be falling more on them. That kind of thing is very common, not a super-rare case.

refurb 4y ago

Why did you completely ignore the capital part I talked about? Instead of raising $10M for a business through a CEO (either their own money or through road shows), there is nothing stopping a company of 100 employees from ponying up $100,000 of their own money and reaping a share of the rewards (or losing it all). Are you really that surprised that workers prefer a risk-free salary instead? I mean I have the option of taking cash or equity at my company and I turn down the equity every time. I don't begrudge the ones who take the risk and make 10x what I do. I'll be honest, you don't seem to understand how businesses work today - you're working from a flawed understanding.

pwinnski 4y ago
So one of us produced a link to supporting research, and other produced hypotheticals and dismissive insults. Okay.

onlyrealcuzzo 4y ago

> By and large, highly-paid CEOs are a drain on corporate profits. As the research paper I linked shows, even those highly-compensated CEOs who win awards end up performing worse than their non-award-winning counterparts. You're forgetting who decides CEO pay - the board / shareholders. They are aware of this. And despite that, they keep these pay packages. Is it fair? I dunno. I personally don't think CEO's should be getting paid what they do. Does anyone care? No. Is anyone's salary fair? I dunno. If you distribute the CEO's pay to the rest of the company it wouldn't materially impact average workers wages (less than a 1% increase) - except in rare cases (less than 5% of large companies). Why should I get raged out that my CEO makes $100M+ per year? If you distribute that to everyone at the company - it's not even a 1% increase. There's much easier ways I can make 1% more money... It's really not worth discussing except in rare cases - and those are exceptions that don't change the larger picture.

pwinnski 4y ago
Instead of focusing on distributing CEO pay to the rest of the company--where I think your math is off--consider things like annual bonuses for employees that are affected by company performance. Something like "you get $20k, or a little less if you or the company is doing poorly, or a little more if you and the company are doing well." Pretty common among developers. When those come in at 90% or 95% of target based on company performance, and yet the CEO still takes home tens of millions, that's when what seems like a tiny thing on a raw number basis, a matter of $2k for a single employee, can seem like a large thing. As an employee who performed well is still feeling the impact of company performance that fell short of expectations, probably on the basis of nothing the employee did, probably more attributably to the CEO (who helped set the expectations, and is more likely to have had a material impact on the result), it's natural for employees to at least wonder why the impact seems to be falling more on them. That kind of thing is very common, not a super-rare case.