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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
by 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 agoDon't the company's owners control who is on the board?
- gmane 3y agoDepends. 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.