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by remotecool
2409 days ago
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Do you have any proof of this? Why would a company pay a CEO millions if they have no talent? If that were the case, they would just find a random person and pay them minimum wage. This sounds like the reasoning of a worker that thinks managers don't actually do anything all day, when the reality is much different. Paying by ability is foolish. I know many people that have the ability to get a good job, but choose to smoke copious amounts of weed and instead sit on the couch all day. It would be like valuing companies based on the idea only. |
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Over the same period, ordinary worker compensation has risen 12%. Is your theory that CEOs have gotten 940% better in the last 40 years?
I'd say no, not really. (Indeed, I think there's reasonable evidence they've gotten worse.) They've just gotten better at extracting cash. And if you're wondering why companies would pay way more, you should think about the fact that "companies" don't set CEO salaries. Company boards do. And who's on boards? CEOs and other high fliers. ., I also think there's a positive feedback loop here. One part is on the payment side. When companies are looking for a new CEO, it's like somebody shopping for a rare and important purchase, like a new car or like surgery. If they get it right, everybody's happy; if not, it could be a disaster. So there's a strong incentive to pay an above-average amount, in hopes of getting an above-average outcome.
The other part is on the company structure side. An expensive CEO is expected to Do Things, to be dramatically in charge. That means creating company structures and a company culture that are very CEO-focused. Then the next time the board hires a CEO, they have an even stronger need for someone who is extraordinary. So the next CEO gets an even bigger slice of money that previously would have gone to investors and the people who do the actual work.
As an alternative, consider that a lot of tech's biggest moneymakers are run differently. Instead of concentrating power at the top, power is more distributed. The average worker is not seen as a replaceable cog, but valuable talent. CEOs are not turning over every few years, but stay around for decades. And consequently, the pay inequality is lower.