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But, and I shouldn't have to say this it's so obvious, there wouldn't be demand in the labor market for CEOs if boards/shareholders didn't think elite CEOs prov
by twoodfin 14y ago
But, and I shouldn't have to say this it's so obvious, there wouldn't be demand in the labor market for CEOs if boards/shareholders didn't think elite CEOs provided value. There has to be a strong correlation there or the inefficient company paying a low value CEO too much will be out-competed by another company with more sense.
- rayiner 14y agoThis can be refuted by a simple counter example. Say CEO X provides V units of value to the company. What should CEO X be paid (P)? It has nothing to do with Y, except in the degenerate case where P > V. P is going to be determined by the supply of CEO's with credentials similar to X. P can vary dramatically depending on that supply, but obviously V doesn't change.
- Evbn 14y agoIn US midcaps and big caps, CEOs a great basically unionized. They artificially constrain supply by being part of an old boys network, complicit with thr Boards.