4 ms·

Good luck attracting and retaining talent if you can't pay market prices for executives.

by eloff 13y ago

KingMob 13y ago
I doubt they should be so worried. Studies show no link between executive pay and executive performance: http://www.economist.com/blogs/graphicdetail/2012/02/focus-0 http://www.economist.com/blogs/graphicdetail/2012/02/focus-0
- bostonpete 13y ago
  I think this is showing a lack of a link between executive pay and stock performance. It could be the case (though I don't know how you'd measure it) that executive performance improved with pay but just had no discernible impact on stock performance.
  - niels_olson 13y ago
    I don't think most executives do it for the money. Money is just a way of keeping score.
- eloff 13y ago
  It doesn't matter, performance is not the only concern. Connections and domain knowledge are even more valuable. Let's say you're Amazon and you pay your CTO a respectable $250k/year. Along comes Microsoft or Google and offers him ten times as much. He's rational so he accepts and take with him all of Amazon's technical secrets to success. Even if there were national regulation capping executive pay in the US, other countries would hire away all of the top players with all their knowledge and connections. It would be a disaster. Is executive pay crazy? Yes, often. But the market supposedly is efficient and the pay is that high for rational reasons in many cases (not all!)
logfromblammo 13y ago
All you need to do is break it into two jobs. The first job is a paid actor that collects and enters all business-relevant data into a computer system, then follows exactly the script that the system provides in response. This actor is replaced immediately if he ever tries to deviate from the script. Internally, the system automatically translates the recognizable business symbols into abstract values. The second job is an engineer that optimizes the system for the highest obfuscated profit number. Also, build in a safeguard to the obfuscator/de-obfuscator program so that the engineer cannot fire himself.
- kumbasha 13y ago
  As long as all actions are logged and reviewed by an independent ethics committee (with anonymized data if needed), I like it. It couldn't possibly be worse than the way we do things now.
kumbasha 13y ago
Ah, right, we wouldn't want Atlas to Shrug now would we.
Florin_Andrei 13y ago
Yeah, you don't want John Galt to pick up his toys and go back to Elysium, do you? Cause then whatcha gonna do, sucker?
Florin_Andrei 13y ago
Riiiight, cause only so few people could do such great jobs. http://www.businessinsider.com/yahoo-coo-henrique-de-castro-2012-10 http://www.businessinsider.com/yahoo-coo-henrique-de-castro-...

Good luck attracting and retaining talent if you can't pay market prices for executives.

by eloff 13y ago

Good luck attracting and retaining talent if you can't pay market prices for executives.

I doubt they should be so worried. Studies show no link between executive pay and executive performance: http://www.economist.com/blogs/graphicdetail/2012/02/focus-0 http://www.economist.com/blogs/graphicdetail/2012/02/focus-0

bostonpete 13y ago
I think this is showing a lack of a link between executive pay and stock performance. It could be the case (though I don't know how you'd measure it) that executive performance improved with pay but just had no discernible impact on stock performance.
- niels_olson 13y ago
  I don't think most executives do it for the money. Money is just a way of keeping score.
eloff 13y ago
It doesn't matter, performance is not the only concern. Connections and domain knowledge are even more valuable. Let's say you're Amazon and you pay your CTO a respectable $250k/year. Along comes Microsoft or Google and offers him ten times as much. He's rational so he accepts and take with him all of Amazon's technical secrets to success. Even if there were national regulation capping executive pay in the US, other countries would hire away all of the top players with all their knowledge and connections. It would be a disaster. Is executive pay crazy? Yes, often. But the market supposedly is efficient and the pay is that high for rational reasons in many cases (not all!)

logfromblammo 13y ago

All you need to do is break it into two jobs. The first job is a paid actor that collects and enters all business-relevant data into a computer system, then follows exactly the script that the system provides in response. This actor is replaced immediately if he ever tries to deviate from the script. Internally, the system automatically translates the recognizable business symbols into abstract values. The second job is an engineer that optimizes the system for the highest obfuscated profit number. Also, build in a safeguard to the obfuscator/de-obfuscator program so that the engineer cannot fire himself.

kumbasha 13y ago
As long as all actions are logged and reviewed by an independent ethics committee (with anonymized data if needed), I like it. It couldn't possibly be worse than the way we do things now.

kumbasha 13y ago

Ah, right, we wouldn't want Atlas to Shrug now would we.

Florin_Andrei 13y ago

Yeah, you don't want John Galt to pick up his toys and go back to Elysium, do you? Cause then whatcha gonna do, sucker?

Florin_Andrei 13y ago

Riiiight, cause only so few people could do such great jobs. http://www.businessinsider.com/yahoo-coo-henrique-de-castro-2012-10 http://www.businessinsider.com/yahoo-coo-henrique-de-castro-...