[ryandrake]

You’re exactly right. Senior leadership (including CEOs) have the best of both worlds: they get the upside when the company succeeds, but none of the downside when the company fails. The worst that happens is they get fired and go make more millions as CEO of some other company. In fact, they often get upside when the company fails (what was Marissa Mayer’s exit package?)

It’s a helluva deal they got going.

[CountSessine]

In fact, they often get upside when the company fails (what was Marissa Mayer’s exit package?)

Marissa Mayer got a nice compensation package because she did well by Yahoo investors: she managed to trick Verizon into paying real money to buy the hulking wreck of Yahoo.

If you start out thinking that Yahoo could ever possibly have been saved in any alternate universe, you can get all-kinds of angry or disappointed in Mayer's performance. But if you see Yahoo for what it was, you realize she really did arrange the best possible deal that Yahoo shareholders could have hoped for.

[munk-a]

I'm not saying that's illogical or irrelevant given how the market works, but... how is this sane when considered from the benefit of society. A failing company managed to recoup some funds investors were expecting to lose by ripping off a healthy sustainable company. Why should we care about reimbursing investors like this when the whole value they add to the free market is an ability to accurately predict (and assist) in a company's growth. If that company tanks they failed at their job and shouldn't get a subsidy to continue doing their job by handicapping a healthy company.

[blattimwind]

A better example might be Carly Fiorina.

[mgleason_3]

I was at HP during the Platt, Fiorina and part of Hurd years. Prior to that experience I was as skeptical as anyone about CEO compensation, impact and contribution. How much difference can one person make?

Well, clearly a huge difference. Under Platt HP had good consistent growth, and we enjoyed record profit sharing and bonuses. Fiorina joined and managed to cut the company's value by 50% in three years. Hurd joined and the company's value went right back up. The difference in execution and competence was startling.

IDK, but the real story must surely be the board of directors (which hires, fires and sets the salary for the CEO). How can a board be so incompetent that it negotiates a severance package whereby Fiorina receives $42 Million to leave after loosing half of the company's value.

When you look at the following graph, keep in mind the Great Recession in 2008.

https://commons.wikimedia.org/wiki/File:HPQ_Stock_Price_Sinc...

[CountSessine]

Fiorina's compensation was arranged by a board that everyone acknowledged was hopelessly dysfunctional (see Mark Hurd and the spy scandal).

There's this claim that CEO compensation doesn't correlate well performance. I could see your Carly Fiorina and raise you Steve Jobs or Jack Welch or any other number of anecdotes. What's the real statistical correlation in the S&P 500?