3 ms·

That assumes that a CEO with this bonus incentive removed would perform as well and bring in the profit that enables that $3000 /ea . Perhaps that's correct bu

That assumes that a CEO with this bonus incentive removed would perform as well and bring in the profit that enables that $3000 /ea . Perhaps that's correct but that would be quite the claim that demands proof. I'm no economist but I would indeed be interested in seeing the studies that show CEOs performance is just as good or better when his/her bonus is taken and then redistributed to everyone else. It's certainly an interesting incentive model.

HWR_14 4y ago
I have no idea why my claim would demand proof. In fact, I'll start by demanding proof from you that CEO performance is in any way correlated to compensation.
danaris 4y ago
And how, exactly, would you be able to tell? Isn't the standard measure of CEO performance "did the stock price meet expectations for the quarter"? A measure which has a myriad of different factors far outside the CEO's control affecting it—as well as a number of factors in the CEO's control that have very little to do with the actual health of the company. Furthermore, it's not at all uncommon for a very good leader to leave (dies, retires, steps down to go do something more fun, forced out by someone who wants to be their successor, whatever), and their successor to inherit a very healthy company with strong fundamentals and good people at various levels...and proceed to do bugger-all for several years and still be hailed as a great leader because the health of a company is very often a trailing indicator of leadership competence.
- notch656a 4y ago
  That's exactly my point. There's no way, I don't think, we can say if we redistributed the CEOs bonus that that $3,000 would still be there. We need some evidence to show the factors leading up to the availability of those $3,000 would still be intact with the bonus incentive removed. One could make the completely unfounded conjecture that perhaps everyone would make $3,000 LESS if the CEO didn't have a bonus incentive. Now that would not be supported by any facts, but then again neither is the suggestion you can just nix the CEO bonus incentive and expect the performance to support that $3000/ea extra money still being there. Remember wealth doesn't have to be zero-sum.

HWR_14 4y ago

I have no idea why my claim would demand proof. In fact, I'll start by demanding proof from you that CEO performance is in any way correlated to compensation.

danaris 4y ago

And how, exactly, would you be able to tell? Isn't the standard measure of CEO performance "did the stock price meet expectations for the quarter"? A measure which has a myriad of different factors far outside the CEO's control affecting it—as well as a number of factors in the CEO's control that have very little to do with the actual health of the company. Furthermore, it's not at all uncommon for a very good leader to leave (dies, retires, steps down to go do something more fun, forced out by someone who wants to be their successor, whatever), and their successor to inherit a very healthy company with strong fundamentals and good people at various levels...and proceed to do bugger-all for several years and still be hailed as a great leader because the health of a company is very often a trailing indicator of leadership competence.

notch656a 4y ago
That's exactly my point. There's no way, I don't think, we can say if we redistributed the CEOs bonus that that $3,000 would still be there. We need some evidence to show the factors leading up to the availability of those $3,000 would still be intact with the bonus incentive removed. One could make the completely unfounded conjecture that perhaps everyone would make $3,000 LESS if the CEO didn't have a bonus incentive. Now that would not be supported by any facts, but then again neither is the suggestion you can just nix the CEO bonus incentive and expect the performance to support that $3000/ea extra money still being there. Remember wealth doesn't have to be zero-sum.