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I really don't understand the outrageous compensation. Seems to me like a lot of CEOs just play the game of "don't fuck things up" and collect a massive paychec

I really don't understand the outrageous compensation. Seems to me like a lot of CEOs just play the game of "don't fuck things up" and collect a massive paycheck because the board and shareholders are too scared of hiring someone shit. They'll accept a mediocre leader, and pay ludicrous amounts of money for some imagined assurance of reduced downside.

andsoitis 3y ago
> I really don't understand the outrageous compensation. Labor is a market (supply/demand). There aren't that many people in the world who can successfully lead a large company like Alphabet.
- mensetmanusman 3y ago
  I bet there are many people.
- Mistletoe 3y ago
  What does he even do? If we have determined kings aren’t a good way to govern why do we continue it in business? Under his reign, Google has gotten their ass kicked in AI when they should have been leading the pack. Doesn’t seem like pay raise material to me. https://observer.com/2023/02/google-ceo-sundar-pichai-bard-chatbot/ https://observer.com/2023/02/google-ceo-sundar-pichai-bard-c...
  - ChatGTP 3y ago
    The main product, which is search is completely wrecked too.
- gnulinux 3y ago
  > There aren't that many people in the world who can successfully lead a large company like Alphabet. What evidence do we have for this? How many times CEOs failed Alphabet level companies? What's your dataset? Are you just making things up because it supports your bias that CEOs are highly skilled and it's not like almost any educated and privileged person can do their job?
  - andsoitis 3y ago
    > What evidence do we have for this? How many times CEOs failed Alphabet level companies? What's your dataset? Logic. It is clearly way more complicated to run a large business that operates across multiple regulatory regions and that is growing through a transition from hyper growth, than it is to do many many other types of work.
    - gnulinux 3y ago
      I see, so you're saying you have no evidence? It's cute to have a theory in your mind, an abstraction, but you have to verify it regardless of how convincing it sounds to you. For example, my "logic" says that you're wrong. I observe what CEOs do, I observe what other managers do, and it seems to me like most good managers I'm familiar with would be good CEOs as well because I see no complex, spectacular decision that CEOs tend to make that other managers don't. The bias you put into your reasoning is that good CEOs are somehow special, talented people and therefore in order for CEOs to be successful in their job, they need to be special and talented. But I have no observation that matches with that. CEOs I'm familiar with tend to be average people who were born rich, or got lucky and ended up being privileged. So who is correct? There is no way to know without getting data and verifying it.
- jltsiren 3y ago
  If a company is so fragile that it cannot handle an incompetent CEO, it will likely fail anyway. Many people could lead Alphabet just fine. But if a top CEO is just 5% better than the average candidate, that 5% is a lot of money, and the CEO can claim some of it as compensation.
- charliea0 3y ago
  I think the labor market model is a poor fit to extremely high level executives. Theoretically, they work for the board and shareholders but in practice they have a lot of power over their own terms of employment. Pichai for example is both CEO and one of the directors. He was groomed by Page into his current role and maintains it more by dint of internal politics than by lack of alternatives.
- Analemma_ 3y ago
  This is a very naive misunderstanding of how the labor market for executives actually works. Executive compensation is set by the Board. Who is the Board? They’re all CEOs of other companies, who have no interest in seeing executive pay tied to performance. This is all a you-scratch-my-back-I’ll-scratch-yours situation, from people all in the Good Old Boys network of Harvard and Stanford MBAs. Tying compensation to performance is in nobody’s interest in this network.
  - andsoitis 3y ago
    > Who is the Board? They’re all CEOs of other companies The board of Google are: Larry Page - founder of Google Sergey Brin - founder of Google Sundar Pichai - CEO of Alphabet John L. Hennessy - Computer Scientist (https://en.wikipedia.org/wiki/John_L._Hennessy https://en.wikipedia.org/wiki/John_L._Hennessy) Frances Arnold - Chemical Engineer and Nobel Laureate. She is the Linus Pauling Professor of Chemical Engineering, Bioengineering and Biochemistry at the California Institute of Technology (Caltech). In 2018, she was awarded the Nobel Prize in Chemistry for pioneering the use of directed evolution to engineer enzymes. (https://en.wikipedia.org/wiki/Frances_Arnold https://en.wikipedia.org/wiki/Frances_Arnold) R. Martin “Marty” Chávez - Investment banker L. John Doerr - Investor and VC. He backed the Google founders. Roger W. Ferguson, Jr. - economist, attorney and corporate executive who served as the 17th vice chairman of the Federal Reserve from 1999 to 2006. Prior to his term as vice chairman, Ferguson served as a member of the Federal Reserve Board of Governors Ann Mather - Technology and Media Board Member Ann Mather is an English business executive. She serves on the boards of directors of Alphabet, Netflix, Bumble and Blend. Her prior board experience includes Airbnb, Arista Networks, MGM Studios and Zappos. K. Ram Shriram - Indian-American billionaire businessman and philanthropist. He is a founding board member and one of the first investors in Google. He worked earlier in Amazon. Robin L. Washington - Has served as executive vice president and chief financial officer of Gilead Sciences, Inc.
    - relaxing 3y ago
      Posting only the academic qualifications of Hennessy and Arnold omits the work both did as business executives and members of other boards.
- wpietri 3y ago
  > There aren't that many people in the world who can successfully lead a large company like Alphabet. At that size, it's perfectly possible that there are zero people who can truly lead it. Imagine it like a marching band. You run in and knock the drum major out of the way. You don't know much about it, so you just march in front of the band, smiling and waving to the crowd. The band keeps on doing their thing. But the crowd sees you apparently in charge, so they congratulate you on the band's performance.
- hibikir 3y ago
  It's far more complicated than that, and pro-CEO, as ultimately even a very bad CEO is going to get paid outrageously. See good old Steve Ballmer, who was basically running Microsoft into the ground. He was still very well paid, even though the minute he announced he was leaving, without naming the replacement, Microsoft stock shot up: The expected value of a random, unknown replacement for shareholders was enormous. So this isn't really about expected value, supply and demand. It's not as if a 10% cut would make Pichai quit, or that you'd not be able to find a comparable replacement at that price: I suspect that, not unlike Ballmer was, Pichai is worse than a random viable candidate. But there really is minimal pressure in saving money with top executives like this. CEO is not a random position, and it's basically never filled by a person the board doesn't have personal connections to. So ultimately CEOs get either raises, or get fired. When a CEO gets a cut in compensation, it's often because their own pay sends a message to investors and employees. Here, what we are seeing is that Pichai sees no need whatsoever to send any message, because he doesn't care in the slightest about this. It's modeling behavior for executives and other employees. And I don't think it's a good example we'd like them to follow.
- kevingadd 3y ago
  Sundar Pichai is not one of them.
- lern_too_spel 3y ago
  Then why pay so much for someone who can't?
- MagicMoonlight 3y ago
  That’s a cope. At that level you’re basically doing nothing except signing the pieces of paper. Outside of exceptions like Jobs and Musk, CEOs rarely have any sort of plan beyond seeing how things go. It’s more that there’s nobody they deem of suitable social standing for filling the position.

andsoitis 3y ago

> I really don't understand the outrageous compensation. Labor is a market (supply/demand). There aren't that many people in the world who can successfully lead a large company like Alphabet.

mensetmanusman 3y ago
I bet there are many people.
Mistletoe 3y ago
What does he even do? If we have determined kings aren’t a good way to govern why do we continue it in business? Under his reign, Google has gotten their ass kicked in AI when they should have been leading the pack. Doesn’t seem like pay raise material to me. https://observer.com/2023/02/google-ceo-sundar-pichai-bard-chatbot/ https://observer.com/2023/02/google-ceo-sundar-pichai-bard-c...
- ChatGTP 3y ago
  The main product, which is search is completely wrecked too.
gnulinux 3y ago
> There aren't that many people in the world who can successfully lead a large company like Alphabet. What evidence do we have for this? How many times CEOs failed Alphabet level companies? What's your dataset? Are you just making things up because it supports your bias that CEOs are highly skilled and it's not like almost any educated and privileged person can do their job?
- andsoitis 3y ago
  > What evidence do we have for this? How many times CEOs failed Alphabet level companies? What's your dataset? Logic. It is clearly way more complicated to run a large business that operates across multiple regulatory regions and that is growing through a transition from hyper growth, than it is to do many many other types of work.
  - gnulinux 3y ago
    I see, so you're saying you have no evidence? It's cute to have a theory in your mind, an abstraction, but you have to verify it regardless of how convincing it sounds to you. For example, my "logic" says that you're wrong. I observe what CEOs do, I observe what other managers do, and it seems to me like most good managers I'm familiar with would be good CEOs as well because I see no complex, spectacular decision that CEOs tend to make that other managers don't. The bias you put into your reasoning is that good CEOs are somehow special, talented people and therefore in order for CEOs to be successful in their job, they need to be special and talented. But I have no observation that matches with that. CEOs I'm familiar with tend to be average people who were born rich, or got lucky and ended up being privileged. So who is correct? There is no way to know without getting data and verifying it.
jltsiren 3y ago
If a company is so fragile that it cannot handle an incompetent CEO, it will likely fail anyway. Many people could lead Alphabet just fine. But if a top CEO is just 5% better than the average candidate, that 5% is a lot of money, and the CEO can claim some of it as compensation.
charliea0 3y ago
I think the labor market model is a poor fit to extremely high level executives. Theoretically, they work for the board and shareholders but in practice they have a lot of power over their own terms of employment. Pichai for example is both CEO and one of the directors. He was groomed by Page into his current role and maintains it more by dint of internal politics than by lack of alternatives.
Analemma_ 3y ago
This is a very naive misunderstanding of how the labor market for executives actually works. Executive compensation is set by the Board. Who is the Board? They’re all CEOs of other companies, who have no interest in seeing executive pay tied to performance. This is all a you-scratch-my-back-I’ll-scratch-yours situation, from people all in the Good Old Boys network of Harvard and Stanford MBAs. Tying compensation to performance is in nobody’s interest in this network.
- andsoitis 3y ago
  > Who is the Board? They’re all CEOs of other companies The board of Google are: Larry Page - founder of Google Sergey Brin - founder of Google Sundar Pichai - CEO of Alphabet John L. Hennessy - Computer Scientist (https://en.wikipedia.org/wiki/John_L._Hennessy https://en.wikipedia.org/wiki/John_L._Hennessy) Frances Arnold - Chemical Engineer and Nobel Laureate. She is the Linus Pauling Professor of Chemical Engineering, Bioengineering and Biochemistry at the California Institute of Technology (Caltech). In 2018, she was awarded the Nobel Prize in Chemistry for pioneering the use of directed evolution to engineer enzymes. (https://en.wikipedia.org/wiki/Frances_Arnold https://en.wikipedia.org/wiki/Frances_Arnold) R. Martin “Marty” Chávez - Investment banker L. John Doerr - Investor and VC. He backed the Google founders. Roger W. Ferguson, Jr. - economist, attorney and corporate executive who served as the 17th vice chairman of the Federal Reserve from 1999 to 2006. Prior to his term as vice chairman, Ferguson served as a member of the Federal Reserve Board of Governors Ann Mather - Technology and Media Board Member Ann Mather is an English business executive. She serves on the boards of directors of Alphabet, Netflix, Bumble and Blend. Her prior board experience includes Airbnb, Arista Networks, MGM Studios and Zappos. K. Ram Shriram - Indian-American billionaire businessman and philanthropist. He is a founding board member and one of the first investors in Google. He worked earlier in Amazon. Robin L. Washington - Has served as executive vice president and chief financial officer of Gilead Sciences, Inc.
  - relaxing 3y ago
    Posting only the academic qualifications of Hennessy and Arnold omits the work both did as business executives and members of other boards.
wpietri 3y ago
> There aren't that many people in the world who can successfully lead a large company like Alphabet. At that size, it's perfectly possible that there are zero people who can truly lead it. Imagine it like a marching band. You run in and knock the drum major out of the way. You don't know much about it, so you just march in front of the band, smiling and waving to the crowd. The band keeps on doing their thing. But the crowd sees you apparently in charge, so they congratulate you on the band's performance.
hibikir 3y ago
It's far more complicated than that, and pro-CEO, as ultimately even a very bad CEO is going to get paid outrageously. See good old Steve Ballmer, who was basically running Microsoft into the ground. He was still very well paid, even though the minute he announced he was leaving, without naming the replacement, Microsoft stock shot up: The expected value of a random, unknown replacement for shareholders was enormous. So this isn't really about expected value, supply and demand. It's not as if a 10% cut would make Pichai quit, or that you'd not be able to find a comparable replacement at that price: I suspect that, not unlike Ballmer was, Pichai is worse than a random viable candidate. But there really is minimal pressure in saving money with top executives like this. CEO is not a random position, and it's basically never filled by a person the board doesn't have personal connections to. So ultimately CEOs get either raises, or get fired. When a CEO gets a cut in compensation, it's often because their own pay sends a message to investors and employees. Here, what we are seeing is that Pichai sees no need whatsoever to send any message, because he doesn't care in the slightest about this. It's modeling behavior for executives and other employees. And I don't think it's a good example we'd like them to follow.
kevingadd 3y ago
Sundar Pichai is not one of them.
lern_too_spel 3y ago
Then why pay so much for someone who can't?
MagicMoonlight 3y ago
That’s a cope. At that level you’re basically doing nothing except signing the pieces of paper. Outside of exceptions like Jobs and Musk, CEOs rarely have any sort of plan beyond seeing how things go. It’s more that there’s nobody they deem of suitable social standing for filling the position.