16 ms·

When CEOs Are Paid for Bad Performance (2005)

91 points by segasaturn 3y ago

adharmad 3y ago
From the article: "One theory is that such CEOs are overpaid because they have too much influence over the board that should be monitoring them on shareholders’ behalf and too much influence over the committee that sets their pay."
jjoonathan 3y ago
It's good to be king.
- kingforaday 3y ago
  Even if only foraday.
  - kibwen 3y ago
    "Only" for a day; Jeff Bezos makes $8 million per hour. $150 thousand per minute. https://www.businessinsider.com/what-amazon-ceo-jeff-bezos-makes-every-day-hour-minute-2018-10?op=1 https://www.businessinsider.com/what-amazon-ceo-jeff-bezos-m...
    - fnovd 3y ago
      >We calculated the Amazon CEO's annual earnings by finding the difference between his 2017 and 2018 net worths
skepticATX 3y ago
> One theory is that such CEOs are overpaid because they have too much influence over the board that should be monitoring them on shareholders’ behalf and too much influence over the committee that sets their pay. Thus, CEOs are effectively able to set their own pay and distort their compensation contract. Just a small amount of research unveils that many boards are comprised of people from a small and exclusive club. Why would one of these club members ever rock the boat? As an obvious example, can Tesla shareholders really say with confidence that the board can objectively evaluate Elon?
- 303uru 3y ago
  Exactly. Once you break into that club, you're golden. You're CEO at one company, you're on the board of 10 others, you're all one big incestuous mess.
  - idontpost 3y ago
    It's the new peerage system. Once you're made a peer of the realm, you are not longer in the group of commoners.
  - Obscurity4340 3y ago
    I mean, if they didn't have such political and economic sway, I'd be fine with it. One would hope meritocracy and fundamental economics as they relate to competency would apply but its just a whole other fucking planet these psychos inhabit
    - 303uru 3y ago
      It truly is an entirely different planet. I've worked very hard, been fortunate in life to come up middle class, etc... And I've accomplished a lot to be where I'm at in an SVP role at a fortune 50. That said, I'm clearly approaching or at a ceiling. The "alumn club" above me is made up of sons of Ivy somebody, frat bro of Ivy somebody and so on. They hire their own, protect their own and care little about real world results. They exist to protect their in group and enrich each other. I truly do not think meritocracy exists at all above a certain level, it's way more old world bloodline type stuff.
      - Obscurity4340 3y ago
        Didn't mean to throw shade at the more reasonable among your ilk ;) You might find comfort in the fact that karma always comes around eventually and more money blatantly does not equal more happiness. I doubt Mr. Musk is happier than me, in fact, I would argue the reverse is true to the extent I literally feel sorry for the guy, not that I excuse or rationalize his general shittiness in who he is fundamentally and how he (mis)behaves constantly. That's not even taking into account the likelihood they run into some intractable issues with the law, which is delayed and sometimes denied but never totally withoht significant downside at any time. As they say, "Give me liberty or give me death" and also "the police only need to get lucky once, the crimer has to get lucky over the career of their continuous criming". Smile friend, you've done well for yourself and remained grounded. There's people far less accomplished I know who failed miserably in that department. I feel very surreal in having someone at your level honoring me with your recognition and engaging in this dialogue with me. Not use to anybody actually ever listening to me but its getting better, I'm noticing.
Beijinger 3y ago
"First, the researchers defined a way to measure CEO skill." Very difficult. https://en.wikipedia.org/wiki/Jack_Welch https://en.wikipedia.org/wiki/Jack_Welch Was he good for GE or the beginning of the end?
- chinchilla2020 3y ago
  Good in the short term. He spun off unprofitable parts of the company. He streamlined the core business. Bad in the long term. He didn't believe in unprofitable orgs. GE did not develop new technology and fell behind the times.
  - Beijinger 3y ago
    " He spun off unprofitable parts of the company." He also spun off "unproductive" parts of the workforce. Take this as a word of caution: https://en.wikipedia.org/wiki/Super-chicken_model https://en.wikipedia.org/wiki/Super-chicken_model
    - hobs 3y ago
      I love the part about "Stack ranking can encourage antisocial behavior, and have deleterious effects upon group outcomes, citing Microsoft, Enron, and Amazon's experience.[10]" when MSFT and Amazon definitely did not stop doing that at all.
  - jandrese 3y ago
    I would argue that the primary job of a CEO is to provide the core strategy to the company. One can count on the rest of the C-suite and middle management to care about quarterly profits, that is their job. It is the role of the CEO to override those short term gains when they are in conflict with the long term vision. CEOs that only focus on the next quarter tend to run their companies into the ground. The CEO should always be thinking about next year and the next decade.
mhewett 3y ago
The CEO who presided over the fall of Yahoo received $40 million in compensation. I'm advertising here that my fee for doing the same job is only half that amount.
- dunno7456 3y ago
  "only half" of 40 million.
- BossingAround 3y ago
  Overseeing fall of a company, huh? Hell, I can do it for free. I'll just network, see where C-suite lands, and ask for favours later while paying out significant C-suite compensation bonuses.
- chinchilla2020 3y ago
  False. Marissa Mayer left Yahoo with over $260 million in compensation.
  - mhewett 3y ago
    I stand corrected. My offer still stands.
TrackerFF 3y ago
I always found it interesting that the Norwegian pension fund, which has $1.47 trillion AUM, paid its CEO approximately $650k in salary. No management fee, no "beat the market" bonuses, just a regular salary. Now, some will say that he, the CEO, is already independently wealthy (having owned a hedge fund and being worth around $700m) and just took the job for the prestige, but it's been the same with the previous directors - only they weren't loaded. Others will also argue that, hey, it's just a pension fund - their goal is not to innovate, or beat competitors, they just manage the money in a way that keeps up with the market, and mainly manage risk. $650k a year is what, VP salary in some no-name hedge fund or private equity firm? Small business CEOs are making more than that. But some people are taking that job, and doing it just as well as their competitors at fund with 0.01% of the AUM, but at 1%-0.1% of the salary.
- woah 3y ago
  Whether they are being paid 0.000044% ($650k) of AUM or 0.0044% of AUM ($65m) doesn't really seem like it would make much of a difference to the fund's performance. If it is possible to get better performance by paying more, it seems like this would be a good idea. In Norway's case, the pension fund is a really huge deal for the country, and managing it is probably like being a high level politician in some ways. You are probably present at all the most important events, and regularly having dinner with the president. They could probably easily pay $0. I don't think you can extrapolate this out to others.
  - generic92034 3y ago
    > If it is possible to get better performance by paying more, it seems like this would be a good idea. That is a pretty big "if". And also it seems to me, that if shareholders have only one button to influence anything in their corporation, they tend to turn it to "high", even if there is no cause-effect relationship to high performance.
  - rurp 3y ago
    But how do you know that someone will be an above average manager, relative to others with a similar track record, pedigree, firm handshake or whatever? Of course the answer is that we don't know, it's spending tens of millions of dollars for a chance at getting an above average leader, and maybe ending up with a below average one instead.
BossingAround 3y ago
cough Ginni Rometty cough Absolute joke of a CEO. Drove IBM to the ground during her tenure [0], gets $20M [1] for her service. What an absolute disaster to watch. A quote from [1]: > Rometty has previously attracted criticism over executive compensation bonuses, espicially amid all the staff layoffs, outsourcing and revenue decline that IBM has experienced over the years. > Indeed, under her leadership IBM posted over 24 consecutive quarters of revenue decline. [0] https://www.cnbc.com/2020/01/31/ibm-was-worst-performing-large-cap-tech-stock-during-romettys-tenure.html https://www.cnbc.com/2020/01/31/ibm-was-worst-performing-lar... [1] https://www.silicon.co.uk/workspace/ibm-ginni-rometty-20m-335402 https://www.silicon.co.uk/workspace/ibm-ginni-rometty-20m-33...
- insanitybit 3y ago
  As a former CEO, nothing disgusts me more than executives taking massive payouts during a layoff. Sickening, psychopath behavior that in any just society would leave you forever ostracized.
- kaashif 3y ago
  This one is particularly interesting to me because there have been positive books written about her, and she gives interviews about he management approach where she says pretty standard stuff. Why would anyone buy those books or want to interview her given her results? Other than to hear about what not to do I guess. Is the counterfactual that it would have been worse without her? Seems somewhat dubious.
  - antisthenes 3y ago
    The counterfactual is that when you're a high profile person, there's always going to be good AND bad stuff written about you simultaneously. And it's almost impossible for an outsider, or even people who don't deal with the CEO directly in their day to day (so VPs and up), to know how much the written article resembles the truth.
- belter 3y ago
  That pales compared to another "successful" CEO: "Dissecting Marissa Mayer’s $900,000-a-Week Yahoo Paycheck" - https://archive.ph/Q09Bd https://archive.ph/Q09Bd
CSMastermind 3y ago
The further I've risen in my career the more I've grown skeptical of the CEO role and the compensation most of them receive. The truth is that there are truly important CEOs without whose leadership their companies would flounder, stagnate, or die. At the same time I've been wholly unimpressed with the leadership of the vast majority of CEOs I've met, not just from an outside looking in perspective but from a working closely with them and meeting them personally perspective. I've met any number of VPs, COOs, CFOs, etc. that are extraordinary leaders and I've met mostly CEOs who exploit those people and the value they create for their own personal gain.
- ldjkfkdsjnv 3y ago
  Yeah the older you get, the more visible the grift is. CEOs/Elite companies hide behind abstractions of eliteness/prestige. From the outside it always seems they are on the ball. On the inside you realize the guy that went to Harvard that is now CEO, got into Harvard due to rowing, and fell upwards for 15 years afterwards. Close interactions with these people will almost always reveal that they are mediocre regular human beings that got put into a seat early in life. While you were toiling away on some task at work, he was busy trying to meet people higher up the chain. The kicker though is that Harvard does attract real outliers (mark zuckerberg, bill gates), and so the name brand rests on them identifying one guy a year that might change the world.
  - deleted 3y ago
    [deleted]
  - belter 3y ago
    Funnily enough, both names you mentioned dropped from Harvard
    - waynesonfire 3y ago
      they still attracted them.
  - soperj 3y ago
frankjr 3y ago
> When CEOs Are Paid for Bad Performance That's good news for Mitchell Baker (Mozilla CEO) who receives millions while Firefox usage has been dropping for years and has recently hit a new low (https://data.firefox.com/dashboard/user-activity https://data.firefox.com/dashboard/user-activity).
- sva_ 3y ago
  That name immediately came to mind upon reading the title as well.
- toastercat 3y ago
  > In 2018 she received a total of $2,458,350 in compensation from Mozilla, which represents a 400% payrise since 2008.[14] On the same period, Firefox marketshare was down 85%. When asked about her salary she stated "I learned that my pay was about an 80% discount to market. Meaning that competitive roles elsewhere were paying about 5 times as much. That's too big a discount to ask people and their families to commit to." Yes, Ms. Baker, how can anyone support themselves and their family for a measly $2,458,350 a year?
  - yowzadave 3y ago
    > "I learned that my pay was about an 80% discount to market. Meaning that competitive roles elsewhere were paying about 5 times as much." This is a fascinating statement, and shows a (willful?) misunderstanding on her part: the pool of people who could do her job at a replacement level is not "other CEO's"--it's a much larger group, including, I'm sure, a great number of people who work for her own company for much less than the CEO's salary. The fact that other CEO's are paid more than this is precisely the problem, and evidence that the role allows CEO's to abuse their power to get paid disproportionately more.
  - jandrese 3y ago
    Gosh, if she is being underpaid so badly maybe she should quit and move to one of those > $10m positions instead? That said, while it is extremely rare to find a CEO that truly inspires (ala Steve Jobs), there are a lot of CEOs that can really tank a company. So many only want to siphon money as fast as possible before bailing out, so there is a danger in hiring a cut rate CEO.
treprinum 3y ago
Nokia CEO Elop turned out to have a $20M bonus in the case of a sale of the company. He really drove the company to the ground and made it a headless chicken for Microsoft during his tenure.
- GCA10 3y ago
  And of course boards justify the fully promised natures of such bonuses as being the only way to get a failing CEO to give up his/her big title and pay in the interests of doing what's right for shareholders. Nice hustle if you can find it.
- expertentipp 3y ago
  Ctrl+f "Elop", knew he's already mentioned. There exists some weirdest demography and social network among whom the CEOs are recruited from. They receive tens of millions as effortlessly as low level employees don't receive basic pay rises neither bonuses. They just exist and show up.
mk89 3y ago
I think sometimes they are paid to do what from outside looks like bad s** on purpose. Like transitioning a company from public to private or other weird things like that. You need someone that can put their face, that "shows up" even if it's kind of obvious where it will lead to - the article calls this "constraints". Imagine being hired exactly with the purpose of doing a bad job that nobody wants to do. You need to offer an incentive for doing such a thing. Or it's just sheer incompetence. I just can't believe that someone can get paid 20 millions or so for crushing a company.
rybosworld 3y ago
I made a comment about this the other day: Many of the world's biggest companies operate like a royal dynasty. Leadership/board positions are inherited by family members, or given to close friends. I have no hard data, but I would wager that it is more common that nepotism plays a role than not.
tonymet 3y ago
A lot of attention is given to CEO salary, but I see it as an indicator of more general largesse among management class. You have a massive class of dubious upper management pulling massive salaries. Also massive, nebulous marketing budgets. And a huge increase in real estate costs (rent). All of which act as a massive tax on consumers. People talk about inflation in the abstract but never consider where those additional costs are going. Increased rents, management comp, marketing are all huge costs that reflect in pricing. I’m not prescribing government oversight on costs – actually the inverse. I think the debasing of currency allows for “legitimate” corruption like this. Until someone approaches this as a class issue rather than an economic one, it will never be recognized or addressed.
jhp123 3y ago
I think an underexplored reason for high CEO pay is outright corruption. We don't really question why a Russian oligarch is a billionaire. It's not business skill, it's using their authority to enrich themselves directly: corruption. In the USA we don't think of ourselves as having such brazenly corrupt oligarchs, and yet the people in analogous positions are making similar outrageous amounts of money. Some of them have been caught in outright fraud and corruption, e.g. Trump. More of them are probably outright corrupt, and have not been caught yet. But also, even the ones who are not corrupt - their positions give them the ability to earn money by corruption, so perhaps the wage has to be competitive so that they won't be tempted. If I'm directly controlling $1 billion of purchase orders, and making a salary of $500,000 a year, I'm going to have a pretty strong incentive to send $100 million of that to a buddy for a 5% kickback. If I'm making $40 million a year, eh why risk it.
takinola 3y ago
All too often CEO pay is divorced from performance leading to bad CEOs being ridiculously overpaid. Also, having a good CEO can generate multiples of their compensation in value for the company. Both things can be true simultaneously. Therefore, it is more helpful to consider the performance of the company (relative to the industry) to judge whether a CEO is delivering rather than just the sticker price of their compensation.

91 points by segasaturn 3y ago

From the article: "One theory is that such CEOs are overpaid because they have too much influence over the board that should be monitoring them on shareholders’ behalf and too much influence over the committee that sets their pay."

jjoonathan 3y ago

It's good to be king.

kingforaday 3y ago
Even if only foraday.
- kibwen 3y ago
  "Only" for a day; Jeff Bezos makes $8 million per hour. $150 thousand per minute. https://www.businessinsider.com/what-amazon-ceo-jeff-bezos-makes-every-day-hour-minute-2018-10?op=1 https://www.businessinsider.com/what-amazon-ceo-jeff-bezos-m...
  - fnovd 3y ago
    >We calculated the Amazon CEO's annual earnings by finding the difference between his 2017 and 2018 net worths

skepticATX 3y ago

> One theory is that such CEOs are overpaid because they have too much influence over the board that should be monitoring them on shareholders’ behalf and too much influence over the committee that sets their pay. Thus, CEOs are effectively able to set their own pay and distort their compensation contract. Just a small amount of research unveils that many boards are comprised of people from a small and exclusive club. Why would one of these club members ever rock the boat? As an obvious example, can Tesla shareholders really say with confidence that the board can objectively evaluate Elon?

303uru 3y ago
Exactly. Once you break into that club, you're golden. You're CEO at one company, you're on the board of 10 others, you're all one big incestuous mess.
- idontpost 3y ago
  It's the new peerage system. Once you're made a peer of the realm, you are not longer in the group of commoners.
- Obscurity4340 3y ago
  I mean, if they didn't have such political and economic sway, I'd be fine with it. One would hope meritocracy and fundamental economics as they relate to competency would apply but its just a whole other fucking planet these psychos inhabit
  - 303uru 3y ago
    It truly is an entirely different planet. I've worked very hard, been fortunate in life to come up middle class, etc... And I've accomplished a lot to be where I'm at in an SVP role at a fortune 50. That said, I'm clearly approaching or at a ceiling. The "alumn club" above me is made up of sons of Ivy somebody, frat bro of Ivy somebody and so on. They hire their own, protect their own and care little about real world results. They exist to protect their in group and enrich each other. I truly do not think meritocracy exists at all above a certain level, it's way more old world bloodline type stuff.
    - Obscurity4340 3y ago
      Didn't mean to throw shade at the more reasonable among your ilk ;) You might find comfort in the fact that karma always comes around eventually and more money blatantly does not equal more happiness. I doubt Mr. Musk is happier than me, in fact, I would argue the reverse is true to the extent I literally feel sorry for the guy, not that I excuse or rationalize his general shittiness in who he is fundamentally and how he (mis)behaves constantly. That's not even taking into account the likelihood they run into some intractable issues with the law, which is delayed and sometimes denied but never totally withoht significant downside at any time. As they say, "Give me liberty or give me death" and also "the police only need to get lucky once, the crimer has to get lucky over the career of their continuous criming". Smile friend, you've done well for yourself and remained grounded. There's people far less accomplished I know who failed miserably in that department. I feel very surreal in having someone at your level honoring me with your recognition and engaging in this dialogue with me. Not use to anybody actually ever listening to me but its getting better, I'm noticing.

Beijinger 3y ago

"First, the researchers defined a way to measure CEO skill." Very difficult. https://en.wikipedia.org/wiki/Jack_Welch https://en.wikipedia.org/wiki/Jack_Welch Was he good for GE or the beginning of the end?

chinchilla2020 3y ago
Good in the short term. He spun off unprofitable parts of the company. He streamlined the core business. Bad in the long term. He didn't believe in unprofitable orgs. GE did not develop new technology and fell behind the times.
- Beijinger 3y ago
  " He spun off unprofitable parts of the company." He also spun off "unproductive" parts of the workforce. Take this as a word of caution: https://en.wikipedia.org/wiki/Super-chicken_model https://en.wikipedia.org/wiki/Super-chicken_model
  - hobs 3y ago
    I love the part about "Stack ranking can encourage antisocial behavior, and have deleterious effects upon group outcomes, citing Microsoft, Enron, and Amazon's experience.[10]" when MSFT and Amazon definitely did not stop doing that at all.
- jandrese 3y ago
  I would argue that the primary job of a CEO is to provide the core strategy to the company. One can count on the rest of the C-suite and middle management to care about quarterly profits, that is their job. It is the role of the CEO to override those short term gains when they are in conflict with the long term vision. CEOs that only focus on the next quarter tend to run their companies into the ground. The CEO should always be thinking about next year and the next decade.

mhewett 3y ago

The CEO who presided over the fall of Yahoo received $40 million in compensation. I'm advertising here that my fee for doing the same job is only half that amount.

dunno7456 3y ago
"only half" of 40 million.
BossingAround 3y ago
Overseeing fall of a company, huh? Hell, I can do it for free. I'll just network, see where C-suite lands, and ask for favours later while paying out significant C-suite compensation bonuses.
chinchilla2020 3y ago
False. Marissa Mayer left Yahoo with over $260 million in compensation.
- mhewett 3y ago
  I stand corrected. My offer still stands.

TrackerFF 3y ago

I always found it interesting that the Norwegian pension fund, which has $1.47 trillion AUM, paid its CEO approximately $650k in salary. No management fee, no "beat the market" bonuses, just a regular salary. Now, some will say that he, the CEO, is already independently wealthy (having owned a hedge fund and being worth around $700m) and just took the job for the prestige, but it's been the same with the previous directors - only they weren't loaded. Others will also argue that, hey, it's just a pension fund - their goal is not to innovate, or beat competitors, they just manage the money in a way that keeps up with the market, and mainly manage risk. $650k a year is what, VP salary in some no-name hedge fund or private equity firm? Small business CEOs are making more than that. But some people are taking that job, and doing it just as well as their competitors at fund with 0.01% of the AUM, but at 1%-0.1% of the salary.

woah 3y ago
Whether they are being paid 0.000044% ($650k) of AUM or 0.0044% of AUM ($65m) doesn't really seem like it would make much of a difference to the fund's performance. If it is possible to get better performance by paying more, it seems like this would be a good idea. In Norway's case, the pension fund is a really huge deal for the country, and managing it is probably like being a high level politician in some ways. You are probably present at all the most important events, and regularly having dinner with the president. They could probably easily pay $0. I don't think you can extrapolate this out to others.
- generic92034 3y ago
  > If it is possible to get better performance by paying more, it seems like this would be a good idea. That is a pretty big "if". And also it seems to me, that if shareholders have only one button to influence anything in their corporation, they tend to turn it to "high", even if there is no cause-effect relationship to high performance.
- rurp 3y ago
  But how do you know that someone will be an above average manager, relative to others with a similar track record, pedigree, firm handshake or whatever? Of course the answer is that we don't know, it's spending tens of millions of dollars for a chance at getting an above average leader, and maybe ending up with a below average one instead.

BossingAround 3y ago

cough Ginni Rometty cough Absolute joke of a CEO. Drove IBM to the ground during her tenure [0], gets $20M [1] for her service. What an absolute disaster to watch. A quote from [1]: > Rometty has previously attracted criticism over executive compensation bonuses, espicially amid all the staff layoffs, outsourcing and revenue decline that IBM has experienced over the years. > Indeed, under her leadership IBM posted over 24 consecutive quarters of revenue decline. [0] https://www.cnbc.com/2020/01/31/ibm-was-worst-performing-large-cap-tech-stock-during-romettys-tenure.html https://www.cnbc.com/2020/01/31/ibm-was-worst-performing-lar... [1] https://www.silicon.co.uk/workspace/ibm-ginni-rometty-20m-335402 https://www.silicon.co.uk/workspace/ibm-ginni-rometty-20m-33...

insanitybit 3y ago
As a former CEO, nothing disgusts me more than executives taking massive payouts during a layoff. Sickening, psychopath behavior that in any just society would leave you forever ostracized.
kaashif 3y ago
This one is particularly interesting to me because there have been positive books written about her, and she gives interviews about he management approach where she says pretty standard stuff. Why would anyone buy those books or want to interview her given her results? Other than to hear about what not to do I guess. Is the counterfactual that it would have been worse without her? Seems somewhat dubious.
- antisthenes 3y ago
  The counterfactual is that when you're a high profile person, there's always going to be good AND bad stuff written about you simultaneously. And it's almost impossible for an outsider, or even people who don't deal with the CEO directly in their day to day (so VPs and up), to know how much the written article resembles the truth.
belter 3y ago
That pales compared to another "successful" CEO: "Dissecting Marissa Mayer’s $900,000-a-Week Yahoo Paycheck" - https://archive.ph/Q09Bd https://archive.ph/Q09Bd

CSMastermind 3y ago

The further I've risen in my career the more I've grown skeptical of the CEO role and the compensation most of them receive. The truth is that there are truly important CEOs without whose leadership their companies would flounder, stagnate, or die. At the same time I've been wholly unimpressed with the leadership of the vast majority of CEOs I've met, not just from an outside looking in perspective but from a working closely with them and meeting them personally perspective. I've met any number of VPs, COOs, CFOs, etc. that are extraordinary leaders and I've met mostly CEOs who exploit those people and the value they create for their own personal gain.

ldjkfkdsjnv 3y ago
Yeah the older you get, the more visible the grift is. CEOs/Elite companies hide behind abstractions of eliteness/prestige. From the outside it always seems they are on the ball. On the inside you realize the guy that went to Harvard that is now CEO, got into Harvard due to rowing, and fell upwards for 15 years afterwards. Close interactions with these people will almost always reveal that they are mediocre regular human beings that got put into a seat early in life. While you were toiling away on some task at work, he was busy trying to meet people higher up the chain. The kicker though is that Harvard does attract real outliers (mark zuckerberg, bill gates), and so the name brand rests on them identifying one guy a year that might change the world.
- deleted 3y ago
  [deleted]
- belter 3y ago
  Funnily enough, both names you mentioned dropped from Harvard
  - waynesonfire 3y ago
    they still attracted them.
- soperj 3y ago

frankjr 3y ago

> When CEOs Are Paid for Bad Performance That's good news for Mitchell Baker (Mozilla CEO) who receives millions while Firefox usage has been dropping for years and has recently hit a new low (https://data.firefox.com/dashboard/user-activity https://data.firefox.com/dashboard/user-activity).

sva_ 3y ago
That name immediately came to mind upon reading the title as well.
toastercat 3y ago
> In 2018 she received a total of $2,458,350 in compensation from Mozilla, which represents a 400% payrise since 2008.[14] On the same period, Firefox marketshare was down 85%. When asked about her salary she stated "I learned that my pay was about an 80% discount to market. Meaning that competitive roles elsewhere were paying about 5 times as much. That's too big a discount to ask people and their families to commit to." Yes, Ms. Baker, how can anyone support themselves and their family for a measly $2,458,350 a year?
- yowzadave 3y ago
  > "I learned that my pay was about an 80% discount to market. Meaning that competitive roles elsewhere were paying about 5 times as much." This is a fascinating statement, and shows a (willful?) misunderstanding on her part: the pool of people who could do her job at a replacement level is not "other CEO's"--it's a much larger group, including, I'm sure, a great number of people who work for her own company for much less than the CEO's salary. The fact that other CEO's are paid more than this is precisely the problem, and evidence that the role allows CEO's to abuse their power to get paid disproportionately more.
- jandrese 3y ago
  Gosh, if she is being underpaid so badly maybe she should quit and move to one of those > $10m positions instead? That said, while it is extremely rare to find a CEO that truly inspires (ala Steve Jobs), there are a lot of CEOs that can really tank a company. So many only want to siphon money as fast as possible before bailing out, so there is a danger in hiring a cut rate CEO.

treprinum 3y ago

Nokia CEO Elop turned out to have a $20M bonus in the case of a sale of the company. He really drove the company to the ground and made it a headless chicken for Microsoft during his tenure.

GCA10 3y ago
And of course boards justify the fully promised natures of such bonuses as being the only way to get a failing CEO to give up his/her big title and pay in the interests of doing what's right for shareholders. Nice hustle if you can find it.
expertentipp 3y ago
Ctrl+f "Elop", knew he's already mentioned. There exists some weirdest demography and social network among whom the CEOs are recruited from. They receive tens of millions as effortlessly as low level employees don't receive basic pay rises neither bonuses. They just exist and show up.

mk89 3y ago

I think sometimes they are paid to do what from outside looks like bad s** on purpose. Like transitioning a company from public to private or other weird things like that. You need someone that can put their face, that "shows up" even if it's kind of obvious where it will lead to - the article calls this "constraints". Imagine being hired exactly with the purpose of doing a bad job that nobody wants to do. You need to offer an incentive for doing such a thing. Or it's just sheer incompetence. I just can't believe that someone can get paid 20 millions or so for crushing a company.

rybosworld 3y ago

I made a comment about this the other day: Many of the world's biggest companies operate like a royal dynasty. Leadership/board positions are inherited by family members, or given to close friends. I have no hard data, but I would wager that it is more common that nepotism plays a role than not.

tonymet 3y ago

A lot of attention is given to CEO salary, but I see it as an indicator of more general largesse among management class. You have a massive class of dubious upper management pulling massive salaries. Also massive, nebulous marketing budgets. And a huge increase in real estate costs (rent). All of which act as a massive tax on consumers. People talk about inflation in the abstract but never consider where those additional costs are going. Increased rents, management comp, marketing are all huge costs that reflect in pricing. I’m not prescribing government oversight on costs – actually the inverse. I think the debasing of currency allows for “legitimate” corruption like this. Until someone approaches this as a class issue rather than an economic one, it will never be recognized or addressed.

jhp123 3y ago

I think an underexplored reason for high CEO pay is outright corruption. We don't really question why a Russian oligarch is a billionaire. It's not business skill, it's using their authority to enrich themselves directly: corruption. In the USA we don't think of ourselves as having such brazenly corrupt oligarchs, and yet the people in analogous positions are making similar outrageous amounts of money. Some of them have been caught in outright fraud and corruption, e.g. Trump. More of them are probably outright corrupt, and have not been caught yet. But also, even the ones who are not corrupt - their positions give them the ability to earn money by corruption, so perhaps the wage has to be competitive so that they won't be tempted. If I'm directly controlling $1 billion of purchase orders, and making a salary of $500,000 a year, I'm going to have a pretty strong incentive to send $100 million of that to a buddy for a 5% kickback. If I'm making $40 million a year, eh why risk it.

takinola 3y ago

All too often CEO pay is divorced from performance leading to bad CEOs being ridiculously overpaid. Also, having a good CEO can generate multiples of their compensation in value for the company. Both things can be true simultaneously. Therefore, it is more helpful to consider the performance of the company (relative to the industry) to judge whether a CEO is delivering rather than just the sticker price of their compensation.