[ajsharp]

If CEOs were as replaceable and disconnected from the outcome of a business as the author suggests, boards would've started doing this long ago and CEO salaries would come down as a result (lots of people want to be CEOs, and by this author's logic, virtually anyone can do it). This is so disconnected from reality it reads like satire.

[kristopolous]

They replace C-level people often and the relationship isn't what you imply.

There's a structural power relationship in play. Monarchs play a fairly unimportant role these days but many countries still have them and compensate them handsomely.

CEOs are structurally capitalist monarchs. Sometimes it's even a hereditary position. They even do the corporate equivalent of court and heraldry stuff.

They're compensated not based on competency but instead, like every other job, via social arrangement.

If you don't think that's how salaries work, you're getting underpaid.

[candiddevmike]

Most corporate structures are feudal. Folks should refer to their VPs as the Duke/Duchess of Engineering.

[AndrewKemendo]

The modern corporation is literally a dictatorship:

"form of government in which one person or a small group possesses absolute power without effective constitutional limitations."

Companies are *governed* by unimpeachable, unelected, all powerful groups that in practice treat employees like literal slaves (you don't have to be chattel or physically abused to be a slave). However because almost all employment agreements are exactly the same, it's the same law firms and laws that these orgs use over and over, essentially all corporations have colluded for this structure and type of employment power dynamic.

After all why wouldn't they, the "American dream" is to become a dictator in the capital class, free from exposure to dirty labor.

How do I know this?

I've been a CEO dictator for a company before and hated the structure. Now I'm trying to create a non-stock cooperative and all I get is head scratching from banks, lawyers etc... who have NO CONCEPT how to organize something that isn't in the boilerplate Delaware equity dictatorship construct.

[lioeters]

Oof, that is so cynical, yet I cannot help but agree with everything you said. I'm often reminded of how far we have come as a society, and how primitive we still are.

[nickelcitymario]

I'd love to hear more about your non-stock cooperative. How is it structured? I'm genuinely fascinated.

[AndrewKemendo]

Thanks! See my reply above, I don’t want to repost cause it looks spammy.

[nickelcitymario]

It's an interesting structure! A couple of thoughts popped out as I read your articles of incorporation.

(1) Instead of saying a representative can't represent more than 10-100 people, have you considered making it a percentage of the membership? Making it a hard number seems potentially inflexible as the organization grows.

(2) Making it a requirement that the CEO be a part of the organization for 4 years before running would imply that either the first CEO didn't have to meet such criteria, or that there is no CEO for the first 4 years.

Very curious to follow your journey!

[invalidOrTaken]

echoing nickelcitymario, would love to hear what you're working on

[AndrewKemendo]

https://seegull.org/

You can read our “Constitution” / Articles in the link

We’re “fundraising” now which is basically just issuing debt based on a negotiated interest rate and due date, so if you know anyone with 5k or more to spare that would be great. Obviously regular capitalist investors want nothing to do with us, which just makes it harder/slower and that’s ok.

[xp84]

I hope this isn’t a hot take, but after seeing the apparent endgame of “democracy” play out over the last 10 years or so, I’m fine with business being done using a completely contrasting system.

[kristopolous]

You should consider all possible systems then and include the possibility that the system your criticizing isn't a very good democracy or maybe is democratic in ineffectual ways.

[xp84]

shrug Maybe you know some good governments that I don’t. It’s just that all democracies I know about are in various stages of being hacked by bad actors in bad faith. I think it’s because none of them were developed in an environment that had the tools being used now to convince people of lies that are profitable for those doing the convincing. So they’re not particularly resilient to this stuff.

I don’t want to see any company that I want to succeed making decisions like a democracy does today.

[kristopolous]

Concentrating power in an even smaller group of narcissists who got there by bravado and charisma doesn't sound like it's a set up for success.

Obviously some deep reconsideration has to be done

[__MatrixMan__]

Is it the endgame of X if X is losing the fight? This has been the endgame of marketing.

[nickelcitymario]

As a marketer, I'm curious about what you mean by this. What are you saying is marketing's endgame? (I'm not sure if I'll agree or disagree yet.)

[__MatrixMan__]

You probably won't agree, because it's not a very charitable thing to say about marketers, sorry.

My position is that democracy works well when the will of the people gets translated into action in a way that still resembles what those people organically need.

Marketing is the process of tampering with that translation such that what actually happens benefits the marketers' customers, typically at the expense of the people.

Presumably there are practices and technologies that we could invest in which preserve this translation, but we haven't been investing in those. Instead we've been investing in marketing. We're building a world where you can spend money to shape public opinion, and that's a world that's toxic to democracy.

Perhaps there was a time when information about available goods and services was hard to come by. Maybe you legitimately needed somebody to get the word out. But I don't think we live in that world anymore.

In case you're not familliar with "the shoe event horizon":

> As a society sinks into depression, the people of the society need to cheer themselves up by buying themselves gifts, often shoes. It is also linked to the fact that when you are depressed you look down at your shoes and decide they aren't good enough quality so buy more expensive replacements. As more money is spent on shoes, more shoe shops are built, and the quality of the shoes begins to diminish as the demand for different types of shoes increases. This makes people buy more shoes.

> The above turns into a vicious cycle, causing other industries to decline.

> Eventually the titular Shoe Event Horizon is reached, where the only type of store economically viable to build is a shoe shop. At this point, society ceases to function, and the economy collapses, sending a world spiralling into ruin. In the case of Brontitall and Frogstar World B, the population forsook shoes and evolved into birds.

That's what is happening to us, except instead of shoes, it's ads. We're diminishing the legitimacy of making a good product or being a good leader, because an easier way to win is just pay to shape public opinion.

What you win isn't as good as it would have been if you competed on merit, but that doesn't matter because competing on merit is hard and your opposition isn't doing it.

So I'm saying that it's Marketing vs Democracy and Marketing is winning. Thus we're living in Marketing's endgame and not Democracy's endgame.

[kristopolous]

Personally I think merges and acquisitions should require a marriage between the CEOs and thereafter, they must sleep together just like it worked with kingdoms.

If you acquire multiple companies well then, fun times for you.

[moffkalast]

Well that's a shockingly fitting. You've got the king or several dukes who own all the land/assets, the middle management barons and the serfs who do the actual work and get a small share as payment.

[pydry]

C level meritocracy mythmaking is today's answer to the divine right of monarchs.

Court politics and C level politics are functionally very similar too.

[golergka]

> Monarchs play a fairly unimportant rol

It may look like that, but it's not true. You know how a good system administrator doesn't seem that important because he prevents all the fires that a bad one would heroically put out? The mere presence of a monarch, not even his actions, acts in a similar fashion. They don't have to actively govern the country, but they have emergency powers that would allow them to prevent a wanna be populist dictator. And because of obvious game theory implications, these powers never have to be used — their mere existence, and everybody bring aware of their existence, is enough for deterrence.

[kristopolous]

Spain had a monarchy And a populist dictator, Franco. Japan had an emperor during WW2 and the Nazis caucused with the Monarchist party DNVP when they were forming a coalition government. Some of the Monarchists even went on to occupy Hitler's cabinet. King Victor Emmanuel III also ruled Italy during the reign of Mussolini.

So I'll have to toss a citation needed on this one. I think history demonstrates a pretty strong overlap between those who support monarchs and populist dictators because in practice, they are structurally pretty similar.

[EliRivers]

Would they? I understand that in many cases, CEOs are often selected by, and their remuneration awarded by, boards made up of incestuous groupings of people who rely on each other in the same way. Their incentive is to award big paydays to each other.

Do you have any evidence that boards would not do this?

[andsoitis]

> I understand that in many cases, CEOs are often selected by, and their remuneration awarded by, boards made up of incestuous groupings of people who rely on each other in the same way.

Can you give one or two examples?

[ceejayoz]

Take a look at the bios on https://ir.homedepot.com/corporate-governance/board-of-direc... for an example. They're all C-suite folks from other large corporations; Marriott, United Technologies, American Airlines, etc.

[andsoitis]

What makes it "incestuous"?

[ceejayoz]

A bunch of CEOs sitting on each others' boards have little reason to constrain the growth of CEO compensation, and every reason to give each other golden parachutes.

[andsoitis]

How do you then explain cases where shareholders do not approve executive compensation? For instance: https://time.com/6184355/ceo-pay-investors-workers/

[EliRivers]

I understand it's typically not so brazen that two people are explicitly setting each other's pay, but an incestuous ecosystem. There's a fair amount of literature examining it and finding things to be concerned about.

For example, Baker, Bivens & Schieder (2019), "Reining in CEO compensation and curbing the rise of inequality", suggests that compensation for CEOs "is more likely to reflect CEOs’ close ties with the corporate board members who set their pay." https://www.epi.org/publication/reining-in-ceo-compensation-...

Bebchuk and Fried (2004), "The Unfulfilled Promise of Executive Compensation", is a literal book discussing it all; it suggests (amongst other things) that CEO remuneration is not always closely tied to company performance but can be influenced by peer benchmarking and the interdependence of corporate boards.

An old (1992) article in Management Review (V81, Issue 5) "Can we put the brakes on CEO pay?", contains suggestive ideas such as "Most CEOs have invited these people to be on board," Denton adds. "It's easy [for directors to be relatively generous.", so this is by no means a new situation.

And of course, veteran shareholder activist Rob Monks has been complaining about all this, and a lot more, for decades.

[samvher]

This Wikipedia page is worth a read: https://en.wikipedia.org/wiki/Interlocking_directorate

[JumpinJack_Cash]

> > lots of people want to be CEOs

Lots of people want to be CEO (until they become CEO and until they make CEO kind of money)

By the first 3 months reality sets in and the person now in the CEO role understands that they are so far removed from the action that they are essentially relegated to the role of spokeperson and cheerleader, at maximum the role of general moving imaginary troops on a fictional battlefield.

If they can make peace with their role of political spokeperson and cheerleader they'd bail out as soon as they reach 5M net worth no debt. No less than 95% would bail out.

The remaining 5% would bail out once they reach 10M net worth no debt.

CEOs turnover and population is so low because it takes a special kind of monodimensional individual to have the world as your oyster 5-10M in your name and no debt and turn around and say "I'd rather go to work and pretend to be at the helm of an imaginary ship instead"

[misja111]

> .. boards would've started doing this long ago ..

You are assuming here that boards are always acting in the best interest of the share holders. I bet there are many who do, but there are at least as many that act primarily in the interest of themselves. Board membership is a lucrative job without much supervision, if any at all. So nothing is keeping board members from taking it easy. Why rock the boat if this can make you known as difficult? You might not get that 2nd or 3rd board membership then anymore.

You might remember Credit Suisse, the major bank that had to be taken over recently by UBS to avoid bankruptcy: until then it had gone from scandal to scandal for 15 years in a row. 2 CEO's had been sent away in that period (by shareholders) but the president of the board? He could stay, and with him the rest of the board. His salary? 7 million a year.

[roflyear]

Yeah because the CEO who happens to be the founders son is also the best person in the world to do the job. Give me a break!

[boringg]

I mean i think you could probably argue the long tail of poor performing small simple companies that sell widgets you might be able to automate a chunk of tasks. Thats as far as I would be willing to go. Other than that its a dishonest or uneducated argument.

[brqxc]

The real world does not work like that. If you studied at the right institution or your family knows the right people, you will get the right positions.

The whole purpose of title inflation is to direct money to your friends with plausible deniability.

Now someone will bring up the rare cases where a CEO actually did something. That does not disprove the rule.