9 ms·

Outsized compensation is to acquire and retain talent, not to ensure jobs are done well.

triceratops 3y ago
As large shareholders they 1. Have an incentive to see their company be managed well and 2. Are probably passionate about the company, its industry, and its mission Isn't that sufficient motivation and incentive for retaining talent on the board?
- lo_zamoyski 3y ago
  I really did wish we'd stop using the word "passionate". The passions are a matter of affect and therefore variable and changing. No mature, responsible adult grounds his life or his actions in his passions. You don't run a multibillion dollar company on passion. This is exactly the opposite of what you should be doing. Follow your reason, not your passions. The worst thing a person can do is to be led by his passions, to have them direct his life. It is better to say "dedicated to the company and its mission". Dedication is a matter of reasoned decision and consistent activity for the good of something. How you feel is irrelevant. If you wake up cranky one day, you still go do what you need to do. You don't wait until you "feel" like it.
  - triceratops 3y ago
    Ok pretend I used the word "dedicated". Does it make what I said less valid?
    - solumunus 3y ago
      They’re arguing it would become more valid.
  - nescioquid 3y ago
    When I was learning to read French, I discovered La Rochefoucauld, an epigrammatist and cynic. >> Les passions sont les seuls orateurs qui persuadent toujours. Elles sont comme un art de la nature dont les règles sont infaillibles; et l'homme le plus simple qui a de la passion persuade mieux que le plus éloquent qui n'en a point. >> The passions are the only advocates which always persuade. They are a natural art, the rules of which are infallible; and the simplest man with passion will be more persuasive than the most eloquent without.[0] If we agree our age is dominated by marketing and propaganda, and if La Rochefoucauld was right that the passions never fail to persuade, I think we've found our age's totemic god: the passions. [0] https://www.gutenberg.org/files/9105/9105-h/9105-h.htm https://www.gutenberg.org/files/9105/9105-h/9105-h.htm
    - tincholio 3y ago
      La Rochefoucauld was a genius... His "Maximes" are definitely worth reading.
  - johnnyanmac 3y ago
    >No mature, responsible adult grounds his life or his actions in his passions. I somehow keep it together, as a sample size of one. Don't see much point in playing word games. You can call it "obsession" or "investment" or simply "greed". The point is they have a strong intrinsic factor that keeps them around and makes them strongly opinionated on how to best make money. >It is better to say "dedicated to the company and its mission". that implies they won't take the next golden parachute 12 months out if they fail, as opposed to trying their best to keep the company they "are dedicated to" afloat. I think that gives too much credit. Wheras like you say, passion can quickly burn out. And their feelings on the company is very relevant to how much of a damn they give. They can say "I quit" and never work a day in their lives again, they don't have any "dedication" to working. You can very much tell in many cases when leadership stopped caring about the company and are looking out the door.
  - thedailymail 3y ago
    You might enjoy The Passions and the Interests by Irving Hirschman, which gives a history of how the concept of "material interest" was introduced as a kind of intermediary state between reason and passion, partly to justify an emergent set of capitalist ideologies.
- mathgeek 3y ago
  Relatively speaking, more compensation is more sufficient than less.
  - triceratops 3y ago
    Once you get beyond a certain amount of wealth, some things are more important than money. I don't mean people become altruistic, just that they pursue more than a number.
    - usrusr 3y ago
      My impression is that the opposite can be true as well: beyond a certain amount of wealth, no number can be high enough to not chase an even higher one. I believe that the low point of pursuing more is when there is enough money to make the immediate utility of a little more unnoticeable but not so much as to make your wealth the defining characteristic of your identity. Once that happens, no number will ever be high enough, they'll seek the higher number like competitive gamers seek higher scores, runners seek lower marathon times, skaters seek ability to do more tricks, collectors seek rare collectibles.
      - johnnyanmac 3y ago
        >beyond a certain amount of wealth, no number can be high enough to not chase an even higher one perhaps, but I think the previous point is more poigninant. If you make a billion dollars, many would care less about making 1 billion more than maybe making $200 million more and a way to start influencing others. You don't buy a large website for tens of billions because you expect to turn that into hunderds of billions. You do that because you now have the eyes and ears of billions of people. Money correlates with Fame, but by itself isn't fame. It's a tool to gather fame or power or simply leisure. Collecting money for money's sake probably isn't unheard of, but extremely unlikely.
    - mathgeek 3y ago
      Some things are always more important than money, at all levels of wealth. That’s not the point though. While you will find exceptions, the majority of people will accept more money when offered it for the same or similar role. This is especially true when talking about folks at the level of “Tesla board members”. These kinds of folks don’t have to choose between money and power/fame/connections so much as balancing them.
- helsinkiandrew 3y ago
  > As large shareholders they… Apart from Elon, each has less than 0.05% of the shares of Tesla, they are far from large shareholders. If the board was to meant to represent shareholders and not to rubber stamp their mates decisions as CEO it should be comprised of representatives of the large institutions that hold the majority of the shares.
- blitzar 3y ago
  As large shareholders they 1. Have an incentive to see their company enrich the shareholders, not be managed well As directors they 1. Have an incentive to set their own pay as high as possible Best decisions for companies and best decisions for shareholders, best decisions for individuals are not always aligned.
dghlsakjg 3y ago
Exceptionally talented? The CEOs brother is on the board
- dmix 3y ago
  Exceptions to the rule doesn't mean it applies generally. At least if we're going to be using Tesla's shitty behaviour to critique businesses as a whole. If anything being honest about why things happen in practice is valuable if you're attempting to change them, even if the ball game often plays by different rules in the higher end / niche old boys club. If your goal is to simply punish those people it's often best to not make rules that apply generally but target that specifically.
sterlind 3y ago
Do you get what you pay for? Are the executives that get paid $50M/year bringing in >$40M/year more than one who only asks for $10M/year? On average? This seems like a question that can be answered with data. My gut feeling is no, based on how bankers kept their golden parachutes intact during the Great Recession, but maybe I'm wrong.
- berberous 3y ago
  On average, I don't know, but I certainly think in some instances, the answer is yes, e.g. if I was Apple's board, I would have been happy to overpay Steve Jobs and Tim Cook relative to an average CEO.
  - yowzadave 3y ago
    Considering Tim Cook's total compensation is about half what Pat Gelsinger's is as Intel CEO, perhaps increasing the compensation will not result in improved performance? I.e., if Cook really cared deeply about being more obscenely rich than he already is, he could have quit Apple and taken his pick of some other, higher-paying CEO position. At some level of compensation, the only people motivated to pursue it are sociopaths. Are these the people you want running your company?
- kodah 3y ago
  > This seems like a question that can be answered with data. Maybe I've worked at all the wrong companies but in my experience any comp that's based on "data" will be gamed until it's meaningless. There is no "data" because reading impact data is often like reading tea leaves. Frankly, what I think is going unsaid here is that corporate executives make a disparately large amount compared to the people who do and plan the work. While executives can make a great difference, so can a great manager or a great engineer. I wish we'd see executives as just another role, taking on different tasks rather than something substantively more valuable when it's not, especially in large orgs.
  - IggleSniggle 3y ago
    I think most intelligent recognize that it's just a role. The comp really is just a power dynamic where having a bunch of money/power gives you a bunch of leverage to acquire more of it from anybody with less. Organizational, you don't want to hire somebody that could just be taking orders from someone else with more power to be your head.
lostlogin 3y ago
How does that work? It’s a tautology. If you size the compensation to be outsized, that’s literally sized as you have decided it should be.
renegade-otter 3y ago
What "talent" does Musk's brother have? They are all literally just sitting on the board in order to fulfill the legal requirement (the board should exist, that's all).
- Vaslo 3y ago
  If they are so bad, or talentless as you say, shareholders can vote them out.

As large shareholders they 1. Have an incentive to see their company be managed well and 2. Are probably passionate about the company, its industry, and its mission Isn't that sufficient motivation and incentive for retaining talent on the board?

lo_zamoyski 3y ago
I really did wish we'd stop using the word "passionate". The passions are a matter of affect and therefore variable and changing. No mature, responsible adult grounds his life or his actions in his passions. You don't run a multibillion dollar company on passion. This is exactly the opposite of what you should be doing. Follow your reason, not your passions. The worst thing a person can do is to be led by his passions, to have them direct his life. It is better to say "dedicated to the company and its mission". Dedication is a matter of reasoned decision and consistent activity for the good of something. How you feel is irrelevant. If you wake up cranky one day, you still go do what you need to do. You don't wait until you "feel" like it.
- triceratops 3y ago
  Ok pretend I used the word "dedicated". Does it make what I said less valid?
  - solumunus 3y ago
    They’re arguing it would become more valid.
- nescioquid 3y ago
  When I was learning to read French, I discovered La Rochefoucauld, an epigrammatist and cynic. >> Les passions sont les seuls orateurs qui persuadent toujours. Elles sont comme un art de la nature dont les règles sont infaillibles; et l'homme le plus simple qui a de la passion persuade mieux que le plus éloquent qui n'en a point. >> The passions are the only advocates which always persuade. They are a natural art, the rules of which are infallible; and the simplest man with passion will be more persuasive than the most eloquent without.[0] If we agree our age is dominated by marketing and propaganda, and if La Rochefoucauld was right that the passions never fail to persuade, I think we've found our age's totemic god: the passions. [0] https://www.gutenberg.org/files/9105/9105-h/9105-h.htm https://www.gutenberg.org/files/9105/9105-h/9105-h.htm
  - tincholio 3y ago
    La Rochefoucauld was a genius... His "Maximes" are definitely worth reading.
- johnnyanmac 3y ago
  >No mature, responsible adult grounds his life or his actions in his passions. I somehow keep it together, as a sample size of one. Don't see much point in playing word games. You can call it "obsession" or "investment" or simply "greed". The point is they have a strong intrinsic factor that keeps them around and makes them strongly opinionated on how to best make money. >It is better to say "dedicated to the company and its mission". that implies they won't take the next golden parachute 12 months out if they fail, as opposed to trying their best to keep the company they "are dedicated to" afloat. I think that gives too much credit. Wheras like you say, passion can quickly burn out. And their feelings on the company is very relevant to how much of a damn they give. They can say "I quit" and never work a day in their lives again, they don't have any "dedication" to working. You can very much tell in many cases when leadership stopped caring about the company and are looking out the door.
- thedailymail 3y ago
  You might enjoy The Passions and the Interests by Irving Hirschman, which gives a history of how the concept of "material interest" was introduced as a kind of intermediary state between reason and passion, partly to justify an emergent set of capitalist ideologies.
mathgeek 3y ago
Relatively speaking, more compensation is more sufficient than less.
- triceratops 3y ago
  Once you get beyond a certain amount of wealth, some things are more important than money. I don't mean people become altruistic, just that they pursue more than a number.
  - usrusr 3y ago
    My impression is that the opposite can be true as well: beyond a certain amount of wealth, no number can be high enough to not chase an even higher one. I believe that the low point of pursuing more is when there is enough money to make the immediate utility of a little more unnoticeable but not so much as to make your wealth the defining characteristic of your identity. Once that happens, no number will ever be high enough, they'll seek the higher number like competitive gamers seek higher scores, runners seek lower marathon times, skaters seek ability to do more tricks, collectors seek rare collectibles.
    - johnnyanmac 3y ago
      >beyond a certain amount of wealth, no number can be high enough to not chase an even higher one perhaps, but I think the previous point is more poigninant. If you make a billion dollars, many would care less about making 1 billion more than maybe making $200 million more and a way to start influencing others. You don't buy a large website for tens of billions because you expect to turn that into hunderds of billions. You do that because you now have the eyes and ears of billions of people. Money correlates with Fame, but by itself isn't fame. It's a tool to gather fame or power or simply leisure. Collecting money for money's sake probably isn't unheard of, but extremely unlikely.
  - mathgeek 3y ago
    Some things are always more important than money, at all levels of wealth. That’s not the point though. While you will find exceptions, the majority of people will accept more money when offered it for the same or similar role. This is especially true when talking about folks at the level of “Tesla board members”. These kinds of folks don’t have to choose between money and power/fame/connections so much as balancing them.
helsinkiandrew 3y ago
> As large shareholders they… Apart from Elon, each has less than 0.05% of the shares of Tesla, they are far from large shareholders. If the board was to meant to represent shareholders and not to rubber stamp their mates decisions as CEO it should be comprised of representatives of the large institutions that hold the majority of the shares.
blitzar 3y ago
As large shareholders they 1. Have an incentive to see their company enrich the shareholders, not be managed well As directors they 1. Have an incentive to set their own pay as high as possible Best decisions for companies and best decisions for shareholders, best decisions for individuals are not always aligned.

dghlsakjg 3y ago

Exceptionally talented? The CEOs brother is on the board

dmix 3y ago
Exceptions to the rule doesn't mean it applies generally. At least if we're going to be using Tesla's shitty behaviour to critique businesses as a whole. If anything being honest about why things happen in practice is valuable if you're attempting to change them, even if the ball game often plays by different rules in the higher end / niche old boys club. If your goal is to simply punish those people it's often best to not make rules that apply generally but target that specifically.

sterlind 3y ago

Do you get what you pay for? Are the executives that get paid $50M/year bringing in >$40M/year more than one who only asks for $10M/year? On average? This seems like a question that can be answered with data. My gut feeling is no, based on how bankers kept their golden parachutes intact during the Great Recession, but maybe I'm wrong.

berberous 3y ago
On average, I don't know, but I certainly think in some instances, the answer is yes, e.g. if I was Apple's board, I would have been happy to overpay Steve Jobs and Tim Cook relative to an average CEO.
- yowzadave 3y ago
  Considering Tim Cook's total compensation is about half what Pat Gelsinger's is as Intel CEO, perhaps increasing the compensation will not result in improved performance? I.e., if Cook really cared deeply about being more obscenely rich than he already is, he could have quit Apple and taken his pick of some other, higher-paying CEO position. At some level of compensation, the only people motivated to pursue it are sociopaths. Are these the people you want running your company?
kodah 3y ago
> This seems like a question that can be answered with data. Maybe I've worked at all the wrong companies but in my experience any comp that's based on "data" will be gamed until it's meaningless. There is no "data" because reading impact data is often like reading tea leaves. Frankly, what I think is going unsaid here is that corporate executives make a disparately large amount compared to the people who do and plan the work. While executives can make a great difference, so can a great manager or a great engineer. I wish we'd see executives as just another role, taking on different tasks rather than something substantively more valuable when it's not, especially in large orgs.
- IggleSniggle 3y ago
  I think most intelligent recognize that it's just a role. The comp really is just a power dynamic where having a bunch of money/power gives you a bunch of leverage to acquire more of it from anybody with less. Organizational, you don't want to hire somebody that could just be taking orders from someone else with more power to be your head.

lostlogin 3y ago

How does that work? It’s a tautology. If you size the compensation to be outsized, that’s literally sized as you have decided it should be.

renegade-otter 3y ago

What "talent" does Musk's brother have? They are all literally just sitting on the board in order to fulfill the legal requirement (the board should exist, that's all).

Vaslo 3y ago
If they are so bad, or talentless as you say, shareholders can vote them out.