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CEO salaries are decided by boards of directors, who are often other CEOs who have a vested interest in maintaining this system of extremely inflated compensati

CEO salaries are decided by boards of directors, who are often other CEOs who have a vested interest in maintaining this system of extremely inflated compensation. It's essentially an aristocracy and is pretty unique to the US[1]. [1] https://www.wtwco.com/en-US/Insights/2020/12/ceo-pay-landscape-in-japan-the-us-and-europe-2020-analysis https://www.wtwco.com/en-US/Insights/2020/12/ceo-pay-landsca...

_yb2s 4y ago
I don’t buy it. If companies could hire sufficient leadership for much less money, this would give them a huge competitive advantage. It looks to me like the problem is actually the opposite: these skills are so rare that an astronomical salary still won’t make it easy to find someone that can do the job well. Companies are paying these crazy amounts and yet still settling for relatively unskilled leaders, and they would get even worse if they paid even less. US ceos get paid more because the demand is higher. I have had the opportunity to work closely with a lot of leaders in industry, and have seen firsthand that only a tiny fraction are competent. A big portion of companies fail because they aren’t able to recruit anyone with strong leadership skills at any price.
- yellowapple 4y ago
  I don't buy it. The decision of who a company hires at what level of compensation rests nearly entirely in a class of individuals consisting of those very same people being hired at some level of compensation. Expecting the executive class to screen and compensate itself based on actual merit rather than mutual favors is akin to expecting congresspersons to vote on their own raises, or expecting cops to investigate themselves for corruption/wrongdoing, or otherwise expecting a committee of wolves to make a decision on tonight's dinner that's in the best interest of sheep. If it was about competence, then the competent executives would've pushed out the incompetent ones in favor of competent replacements sourced from the general public. Instead, they do the precise opposite, favoring incompetent incumbents and fighting tooth and nail against competent replacements sourced from the general public. That fight is in vain: like any fight between the aristocracy and bourgeoisie, the latter has the actual skill and knowledge to win... only for their descendants to inherit their wealth and become the new aristocracy, against which a new bourgeoisie struggles - and rinse and repeat. Put simply: it's the same Old Money v. New Money bullshit we've seen for as long as the concept of wealth has existed.
  - unity1001 4y ago
    > That fight is in vain: like any fight between the aristocracy and bourgeoisie, the latter has the actual skill and knowledge to win... Only because the former keeps believing the justifications and rules dished out against them by the latter. Its not different than the religion in middle ages and how the aristocrats and priesthood dished out justifications and rules to maintain the order. Otherwise the former has the power to change everything in the democratic apparatus.
- horns4lyfe 4y ago
  If you can’t find those skills, then why are you paying so much to people that don’t have them? You’re living in a world of a perfect simulation when it’s really just a bunch of grubby people protecting a lifestyle they think they deserve.

_yb2s 4y ago

I don’t buy it. If companies could hire sufficient leadership for much less money, this would give them a huge competitive advantage. It looks to me like the problem is actually the opposite: these skills are so rare that an astronomical salary still won’t make it easy to find someone that can do the job well. Companies are paying these crazy amounts and yet still settling for relatively unskilled leaders, and they would get even worse if they paid even less. US ceos get paid more because the demand is higher. I have had the opportunity to work closely with a lot of leaders in industry, and have seen firsthand that only a tiny fraction are competent. A big portion of companies fail because they aren’t able to recruit anyone with strong leadership skills at any price.

yellowapple 4y ago
I don't buy it. The decision of who a company hires at what level of compensation rests nearly entirely in a class of individuals consisting of those very same people being hired at some level of compensation. Expecting the executive class to screen and compensate itself based on actual merit rather than mutual favors is akin to expecting congresspersons to vote on their own raises, or expecting cops to investigate themselves for corruption/wrongdoing, or otherwise expecting a committee of wolves to make a decision on tonight's dinner that's in the best interest of sheep. If it was about competence, then the competent executives would've pushed out the incompetent ones in favor of competent replacements sourced from the general public. Instead, they do the precise opposite, favoring incompetent incumbents and fighting tooth and nail against competent replacements sourced from the general public. That fight is in vain: like any fight between the aristocracy and bourgeoisie, the latter has the actual skill and knowledge to win... only for their descendants to inherit their wealth and become the new aristocracy, against which a new bourgeoisie struggles - and rinse and repeat. Put simply: it's the same Old Money v. New Money bullshit we've seen for as long as the concept of wealth has existed.
- unity1001 4y ago
  > That fight is in vain: like any fight between the aristocracy and bourgeoisie, the latter has the actual skill and knowledge to win... Only because the former keeps believing the justifications and rules dished out against them by the latter. Its not different than the religion in middle ages and how the aristocrats and priesthood dished out justifications and rules to maintain the order. Otherwise the former has the power to change everything in the democratic apparatus.
horns4lyfe 4y ago
If you can’t find those skills, then why are you paying so much to people that don’t have them? You’re living in a world of a perfect simulation when it’s really just a bunch of grubby people protecting a lifestyle they think they deserve.