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> 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 m

> 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.
briffle 3y ago
Surely Elon's brother is diligently looking out for the best interests of the average shareholder...
paulddraper 3y ago
> can Tesla shareholders really say with confidence Well, 13% of shareholders are Elon himself
jackmott 3y ago
[dead]
hn_throwaway_99 3y ago
The way I think it's helpful to think about it is "CEOs have the best damn union on the planet". That is, CEOs and boards basically conspire to keep executive pay astronomically high. I mean, I can understand "bidding wars" for the best of the best CEOs, but I'd think tons of potentially really capable CEOs would work for, say, 10 million instead of 30 million annually. But boards continue to insist on "paying above the mean", and it's not hard to see where that ends up. Unions get their power through member solidarity. CEOs essentially get their power the same way, with members of "The Club" all ensuring they won't be undercut on salary.
- axus 3y ago
  Don't the company's owners control who is on the board?
  - gmane 3y ago
    Depends. As a specific counter-example: a lot of (USA) non-profits have self-perpetuating boards. The CEO and the Board go out and recruit new members of the Board. While the Board has a legal fiduciary duty to the company (non-profits are companies!), it can get pretty murky pretty fast. For publicly held companies (and some credit unions and similar structured organizations), sure, the Board is "elected" by the shareholders. But this isn't an election like you're used to, and the Board recommends who should be elected to the Board and those people generally are elected. Privately held companies can have a Board that's chosen by the owners, some even have Boards appointed by the CEO, or the CEO can have a controlling interest in the company. It takes a pretty big breach for you to remove a CEO who appointed you to the Board.
rurp 3y ago
Yeah exactly. There's this widespread fiction that CEO pay is the natural result of intense free market pressure. In reality, these decisions are largely made by a fairly small group of people with highly interconnected relationships and business interests.

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.

briffle 3y ago

Surely Elon's brother is diligently looking out for the best interests of the average shareholder...

paulddraper 3y ago

> can Tesla shareholders really say with confidence Well, 13% of shareholders are Elon himself

jackmott 3y ago

[dead]

hn_throwaway_99 3y ago

The way I think it's helpful to think about it is "CEOs have the best damn union on the planet". That is, CEOs and boards basically conspire to keep executive pay astronomically high. I mean, I can understand "bidding wars" for the best of the best CEOs, but I'd think tons of potentially really capable CEOs would work for, say, 10 million instead of 30 million annually. But boards continue to insist on "paying above the mean", and it's not hard to see where that ends up. Unions get their power through member solidarity. CEOs essentially get their power the same way, with members of "The Club" all ensuring they won't be undercut on salary.

axus 3y ago
Don't the company's owners control who is on the board?
- gmane 3y ago
  Depends. As a specific counter-example: a lot of (USA) non-profits have self-perpetuating boards. The CEO and the Board go out and recruit new members of the Board. While the Board has a legal fiduciary duty to the company (non-profits are companies!), it can get pretty murky pretty fast. For publicly held companies (and some credit unions and similar structured organizations), sure, the Board is "elected" by the shareholders. But this isn't an election like you're used to, and the Board recommends who should be elected to the Board and those people generally are elected. Privately held companies can have a Board that's chosen by the owners, some even have Boards appointed by the CEO, or the CEO can have a controlling interest in the company. It takes a pretty big breach for you to remove a CEO who appointed you to the Board.

rurp 3y ago

Yeah exactly. There's this widespread fiction that CEO pay is the natural result of intense free market pressure. In reality, these decisions are largely made by a fairly small group of people with highly interconnected relationships and business interests.