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Ending the cult of the CEO

managementtoday.co.uk

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Re: Ending the cult of the CEO

#111

Post by mbreese »

chickenbane wrote: post #94
rdgthree wrote: post #91

Earlier quoted context omitted.

Ballmer ruined the company, not turned it around. He took something amazing and tanked it. Nadella is the example here.

This is often stated, but when you actually look at his accomplishments (from Wikipedia): > Under Ballmer's tenure as CEO, Microsoft's annual revenue surged from $25 billion to $70 billion, while its net income increased 215 percent to $23 billion, and its gross profit of 75 cents on every dollar in sales is double that of Google or IBM. ... > Ballmer also built half-a-dozen new businesses such as the data centers di…

MSFT Market cap when Ballmer took over: $601B

MSFT Market cap when Ballmer announced he was leaving: $270B

That was the problem... even if the initial valuation was ridiculously inflated by the early tech bubble, post-crash, the stock was pretty stagnant throughout his tenure as CEO.

http://fortune.com/2013/08/23/steve-ballmers-market-cap-prob...

Re: Ending the cult of the CEO

#112

Post by JoeCortopassi »

sorenjan wrote: post #108
JoeCortopassi wrote: post #72

Reasons why CEO's make millions and I don't: - Business Network: If I had a billion dollars, I would never have been able to acquire Instagram. I wouldn't even be able to get a seat at the table. Zuckerberg closed it in record time while talking to a company that wanted to be on it's own - Market Knowledge: I thought the iPad was the stupidest device ever, Steve Jobs didn't. I now have 4 at my house along with two of…

I think you're forgetting the most important reason: - The board members and CEOs are all part of the same club and is looking out for each other.

Yes, networks are beneficial in attaining any job, but the caricature you posit is a farce

Re: Ending the cult of the CEO

#113

Post by MikeTheGreat »

ktRolster wrote: post #49
elihu wrote: post #36

The way I look at it, there are two kinds of CEOs. There are the ones that founded the company and have led the company according to their own personal vision. Many of them hold stock worth billions and they're generally looked up to as "captains of industry". The other kind is the CEO who is hired by the board of directors. They're usually very well paid and given a lot of stock, but aren't wealthy the way, say, Bil…

The way I look at it, a good CEO can save a company millions (or even billions if it's a large company like Sony) by negotiating better contracts. That is a skill some CEOs have. Now, if you're going to hire a CEO with that skill, do you think he's not going to also negotiate a good contract for himself? He has that skill.

I'm curious - is it common to hire CEOs and then compensate them with a commission of their negotiated savings?

I'm sure that the devil is in the details, but for a company that is already up-and-running it seems like it should be possible to measure how much the company is spending currently, then how much less the company spent after the CEO negotiated, and then give the CEO a fraction of that.

Re: Ending the cult of the CEO

#114

Post by refurb »

mbreese wrote: post #111
chickenbane wrote: post #94

Earlier quoted context omitted.

This is often stated, but when you actually look at his accomplishments (from Wikipedia): > Under Ballmer's tenure as CEO, Microsoft's annual revenue surged from $25 billion to $70 billion, while its net income increased 215 percent to $23 billion, and its gross profit of 75 cents on every dollar in sales is double that of Google or IBM. ... > Ballmer also built half-a-dozen new businesses such as the data centers di…

MSFT Market cap when Ballmer took over: $601B MSFT Market cap when Ballmer announced he was leaving: $270B That was the problem... even if the initial valuation was ridiculously inflated by the early tech bubble, post-crash, the stock was pretty stagnant throughout his tenure as CEO. http://fortune.com/2013/08/23/steve-ballmers-market-cap-prob...

Balmer became the CEO right at the peak of the tech bubble. He couldn't (nobody could) possibly have maintained that sort of valuation. It was all hype and irrational exuberance.

Re: Ending the cult of the CEO

#115

Post by mjfl »

hkmurakami wrote: post #3

I really hope that we can end the cult of the entrepreneur as well. It's not some special thing to incorporate and start a company, and it's not inherently superior to any other line of work.

You're right. I'll have to take down that shrine to Mark Zuckerberg in my closet.

????

"Cult of the entrepreneur"? What does that even mean? What concrete action would cause an end of the "cult of the entrepreneur"? Not starting new businesses? Or just not being friendly to Zuck at parties? What are you talking about?

Re: Ending the cult of the CEO

#116

Post by voidz »

gech wrote: post #109
jimbeam77 wrote: post #4

Earlier quoted context omitted.

There's nothing special about starting a company for sure, but successfully growing one takes a lot of grit.

It takes grit to get up everyday at 4 a.m. just to drive a truck or work at a warehouse or be a nurse etc etc etc

How is that relevant?

Re: Ending the cult of the CEO

#117

Post by mbreese »

refurb wrote: post #114
mbreese wrote: post #111

Earlier quoted context omitted.

MSFT Market cap when Ballmer took over: $601B MSFT Market cap when Ballmer announced he was leaving: $270B That was the problem... even if the initial valuation was ridiculously inflated by the early tech bubble, post-crash, the stock was pretty stagnant throughout his tenure as CEO. http://fortune.com/2013/08/23/steve-ballmers-market-cap-prob...

Balmer became the CEO right at the peak of the tech bubble. He couldn't (nobody could) possibly have maintained that sort of valuation. It was all hype and irrational exuberance.

It really wasn't the loss post-bubble that was Ballmer's issue, it was that the stock price was stagnant.

Re: Ending the cult of the CEO

#118

Post by lelandbatey »

JoeCortopassi wrote: post #72

Reasons why CEO's make millions and I don't: - Business Network: If I had a billion dollars, I would never have been able to acquire Instagram. I wouldn't even be able to get a seat at the table. Zuckerberg closed it in record time while talking to a company that wanted to be on it's own - Market Knowledge: I thought the iPad was the stupidest device ever, Steve Jobs didn't. I now have 4 at my house along with two of…

Total side note, but I do want to note: Gabe Newell can't lose his job unless Valve Software fails entirely, since Valve is a privately owned company. He and Mike Harrington pretty much own the company outright. And given that Valve had ~2.5 Billion in equity in 2012[0], I don't think Valve is in any danger of going away.

[0] - https://en.wikipedia.org/wiki/Valve_Corporation#cite_note-1

Re: Ending the cult of the CEO

#119

Post by argv_empty »

MikeTheGreat wrote: post #113
ktRolster wrote: post #49

Earlier quoted context omitted.

The way I look at it, a good CEO can save a company millions (or even billions if it's a large company like Sony) by negotiating better contracts. That is a skill some CEOs have. Now, if you're going to hire a CEO with that skill, do you think he's not going to also negotiate a good contract for himself? He has that skill.

I'm curious - is it common to hire CEOs and then compensate them with a commission of their negotiated savings? I'm sure that the devil is in the details, but for a company that is already up-and-running it seems like it should be possible to measure how much the company is spending currently, then how much less the company spent after the CEO negotiated, and then give the CEO a fraction of that.

That seems like what stock compensation is aimed at. If the company gets a better deal on something, it retains more of its assets and is thus worth more to its owners.
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