[stu2b50]

Making a mistake is not in-it-of-itself a problem. Mistakes are inevitable, if nothing else because people cannot be oracles. If you bet into the river because you have a flush draw, you'll lose around 75% of the time - but that doesn't mean it was a mistake in those 3/4s of a time.

If as a board you unduly punish executives when bets they make don't pan out, you risk causing a culture of fear that prevents innovation and big bets.

Obviously there's a limit, and the reasoning is important behind the bets.

That being said it's not like all of the tech ceos were perfectly competent - that's not what I'm saying. But the knee-jerk "well, fire them too" reaction from the internet is mostly an emotional response.

[wootland]

If the executives are "just human" then they should be paid like humans along with everyone else. They shouldn't have their cake and eat it too. If you get paid orders of magnitude more than everyone else, you should take on orders of magnitude more risk (including going to prison when the company breaks the law).

[stu2b50]

That's not really a correlation that exists anywhere else. A white collar office worker on average makes significantly more than a blue collar worker but they don't particularly take more risk or anything.

People are paid based on opportunity cost. Executives are paid very highly because the cost of them making a poor decision, or not making a good decision, is very high. Meanwhile, the cost of hiring me and me not performing to expectations is low. It's not because they're God's or anything. The supply of people with leadership experience is also definitionally low.

Of course there's a lot of old boys club in executive roles in reality but that's the boards and shareholders problem when they do a bad job.