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One might think of executive pay in the same way startups think about user acquisition cost versus lifetime value. The question isn't just about the numbers per
by canvascritic 3y ago
One might think of executive pay in the same way startups think about user acquisition cost versus lifetime value. The question isn't just about the numbers per se, but about the underlying value an executive brings to the organization, and whether that value justifies the cost.
History has shown that markets often reward the bold and innovative, but they also have a way of self-correcting when things go astray. The parallel with executive pay is intriguing: how do you quantify the value of leadership, vision, and strategic acumen?
it seems the debate around executive pay reflects deeper societal questions about value creation and value distribution. maybe, possibly, the solution isn't to reduce executive pay outright, but to tie it more closely to demonstrable long-term value creation, not unlike how successful startups operate.
- onlyrealcuzzo 3y ago> The parallel with executive pay is intriguing: how do you quantify the value of leadership, vision, and strategic acumen? Post-ex?
- canvascritic 3y agoYeah, no free lunch / easy solutions here. post-ex evaluation often misses the ongoing impact of decisions made during a leader's tenure. also there is difficulty in isolating the effects of a single leader from the myriad of other factors that could influence a company's success post-exit. ex. Market conditions, subsequent leadership, and unforeseen global events, to name a few
- s1artibartfast 3y agoThe answer is is probably higher base pay along with longer maturity dates for options, or at least a wider spread of maturity dates.
- whatwhaaaaat 3y agoOr how about ceos serve on other ceos boards and have been approving absolutely outrageous packages for 30+ years and now we’re in clown world. All of that nonsense about value and vision means nothing when ceos helm companies who are protected by a myriad of what should be considered antitrust violations. What vision and value could a healthcare ceo possibly provide? Been in the corp world for 20 years and not once have I seen any meaningful change come from a ceo of companies the size of which we’re talking about.
- lacrimacida 3y agoI agree, their value is greatly exaggerated beyond their clique who are also in onto the scheme. They do bring a lot and are a key player to their value extracting system, more than the actual worker who gets the job done. When things go south they have golden parachutes. Whatever they risk is taken care of.
- OrvalWintermute 3y ago> I agree, their value is greatly exaggerated beyond their clique who are also in onto the scheme I cannot concur. I think truly stellar CEOs are worth their weight in gold. The problem is, we have a great many CEOs being paid like they are the 4 sigma CEOs when in fact they are ordinary CEOs and not worth their pay in iron even.
- tdeck 3y ago> how do you quantify the value of leadership, vision, and strategic acumen? A bunch of rich people on the board vote on compensation. It doesn't have anything to do with quantifying the "value" of the CEO's supposed qualities. They do it based on their own opinions and biases, what they get out of the deal as shareholders and board members, and maybe a commissioned study based on pay of CEOs at similar companies. If we did have a philosophy that allowed us to perfectly quantify that value, it wouldn't change how the process actually works for setting their pay.
- maxerickson 3y agoHow do you even possibly examine the counter factual? Like what if the average CEO looks like they have a history of making above average decisions but is really just lucky?