Ending the cult of the CEO • Hacker News Board

Re: Ending the cult of the CEO

#161

Post by jernfrost » Tue, Apr 25, 2017, 8:53 AM UTC

tertius wrote: post #122

aaroninsf wrote: post #97

Earlier quoted context omitted.

There is an unvoiced logic here that I question. The contention is that a CEO saves $x million, and thereby 'earns' some [preposterous] fraction thereof, as a finders' fee. This is a similar logic to a broker taking a percentage of a large market transaction. That part I disagree with and think many upset about CEO compensation (or market speculators/industry windfalls) is that this is earning in any meaningful way.…

I would make the contention that it is up to the company and the board of the company to decide the compensation of any of it's employees, including the CEOs. "Luck" has a lot to do with it, but it also has a lot to do with many other types of success that most people don't have problems with.

It is largely random, and heavily influenced by culture. E.g. CEOs in different countries make vastly different salaries yet don't have noticeable difference in performance or outcomes. CEO salaries has more to do with political ideology of a country than market realities. It is no coincidence that the country were people have the most unrelenting belief in the magic powers of the individual, America, also pays their CEOs the highest. Also no coincidence it happened after the 80s philosophy of "greed is good".

Research, logic, and reason simply doesn't support the myth of the CEO. But board members and CEOs themselves like to indulge in that myth.

Re: Ending the cult of the CEO

#162

Post by jernfrost » Tue, Apr 25, 2017, 8:58 AM UTC

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…

But this competition over who is most valuable in the world or in a company is rather futile. Who matters more, the doctor who saves the lives of 4 talented CEOs or the CEOs themelves? What about the teacher or professor who unlocked the talent of say 10 future world leaders, but still gets a measly salary? What about the scientist who makes an invention or discovery which changes all of society?

There are plenty of people with profound influence on society but who get very little compensation for it, because they don't sit close to and control the money bag.

I think it is time we stop worshiping CEOs and accept that they are not these indispensable Gods. They are like any other talented professional.

Re: Ending the cult of the CEO

#163

Post by erikb » Tue, Apr 25, 2017, 9:05 AM UTC

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.

This cult is important, though. Important to achieve exploitation of talented, young people who would otherwise take a save, well paying job in a big company or government.

Re: Ending the cult of the CEO

#164

Post by ralfd » Tue, Apr 25, 2017, 9:09 AM UTC

lelandbatey wrote: post #118

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

Small addition: This article says Newell bought Harrington out when he left in 2000.

https://www.forbes.com/forbes/2011/0228/technology-gabe-newe...

Re: Ending the cult of the CEO

#165

Post by erikb » Tue, Apr 25, 2017, 9:09 AM UTC

I always wonder why people happily give up the rewards they earned for their hard work. Prestige, connections, bonusses. I think that's a big part for the guy at the top getting most of it as well.

And the reason is self-preservation. While all these things are nice, to most people it is more important to not experience the opposite: public criticism, haters, losing your job. In many situations it is also reasonable, since for a middle-income person a save reliable income is usually the most valuable asset they have. Losing it is much more hurtful to their lifes than losing a bonus. Therefore they give up some higher-risk opportunities for safety.

Summary: The employees probably also want the success and failure associated to their boss not themselves.

Re: Ending the cult of the CEO

#166

Post by TheOtherHobbes » Tue, Apr 25, 2017, 9:11 AM UTC

ChuckMcM wrote: post #104

xapata wrote: post #102

Earlier quoted context omitted.

While the words "decide" and "choice" have slightly different connotations, it's quite frustrating to hear such a just-so explanation without making clean definitions for the two terms. I guess in the end you back away from that particular distinction in favor of the incontrovertible "roles change". If you don't mind, could you rephrase your conjecture as a falsifiable hypothesis?

How about this, tell me if it works for you or not; A path is sequence of correlated activities that lead to a particular goal or deliverable. A choice can increase or decrease the total number of goals or deliverables. A decision can increase or decrease the success chances of a pre-existing goal or deliverable. Generally a startup CEO has one deliverable, the product. And all of their actions are decisions on how t…

Your theory doesn't explain why so many CEOs are either neutral or spectacularly harmful to the long-term health of the companies they manage.

I think the distinction between choices and decisions is arbitrary.

The real difference is that startups have to keep customers and/or initial investors happy. They're also more likely - on a scale of "absolutely very much" to "I suppose I should care, I guess" - to take an interest in the employee culture.

Enterprise CEOs have to keep their boards and institutional investors happy, and mostly don't give a crap about employee culture, except in so far as it contributes to the first goal.

The problem for enterprise CEOs is that there are painful, obvious conflicts between Wall Street's persistent demand for high quarterly returns, the on-the-ground demands of keeping a business healthy and growing, and the value of their own personal stake in the company.

Re: Ending the cult of the CEO

#167

Post by jernfrost » Tue, Apr 25, 2017, 10:39 AM UTC

WalterBright wrote: post #130

knieveltech wrote: post #127

Earlier quoted context omitted.

I'm guessing you aren't conversant with how taxation and class mobility have changed over the last 40 years. Let me save you the suspense: you're wrong.

Taxes went up, class mobility went down.

Marginal tax rate in the US has fallen like a rock since Reagan got into government. The exact same time class mobility went down as well. If you look at the statistics class mobility is highest in high taxed Nordic countries. Low tax anglo-saxon countries are usually pretty bad at this. The UK follows much of the same ideology as the US and also has among the lowest mobility in Europe.

It is nothing weird about this really. Higher taxed countries are able to offer better public education and health care which gives the lesser of actually stand a chance of making it.

In the US the system is especially rigged. There is no free school choice, so you are forced to go to the public school in your shitty neighborhood if you are poor, while the rich through never ending donations enjoy schools with abundant resources. And even if the schools were good you would be screwed before you even get in, because the US does not offer quality child care to poor people. Research shows the years before school is the most important for future development.

I live in a poorer area of Oslo, but I could if I wanted to send my kids to the schools in the richest part of town without any extra cost to me. But it isn't really important as school quality is pretty even, through proper public funding rather than relying on private donations. Also we get subsidized child care of a quality that typically only upper middle class buy in the US.

If you don't even the playing field in a persons early years you are not going to see much social mobility.

Re: Ending the cult of the CEO

#168

Post by jernfrost » Tue, Apr 25, 2017, 10:46 AM UTC

jathu wrote: post #31

This is reminiscent of auteur theory in film, which essentially says that the director is the author of the film. Similar to corporations, making a movie requires a lot of people with different skills/talent. The director overshadows everyone and is the person primarily credited with authoring a film, they even overshadow the writers of the screenplay. One of the leading arguments for auteur theory is that the direct…

It is of course an illusion created because all the talent around a director is taken for granted. Put Steve Jobs or Elon Musk is Somalia and come back in 10 years and see what they had accomplished. Probably not very much at all. Elon Musk himself realized early that he could not achieve his dreams in South Africa and left.

The danger of focusing too much on the leading person, is one easily forgets that if one doesn't create a society full of talented engineers, scientists, teachers, with good infrastructure etc, then these people will not be able to do their magic.

It is easy to think that without Eddison there would have been no lightbulb, but really when you look at it, it becomes clear that if he had not lived somebody else would have done it. But they wouldn't have done it any random place. With high chance it would have been the US as well due to the presence of the right sort of mix of talent, drive, money and opportunity.

If you fail to create this environment then "great" leaders are useless.

Napoleon was a brilliant military strategist, but if he not lived France probably would have gotten another brilliant military strategist taking over Europe? Why because the French revolution created a system that allowed talent to flourish. Talented generals moved up the ranks fast rather than those with the proper names and family.

Re: Ending the cult of the CEO

#169

Post by xapata » Tue, Apr 25, 2017, 11:56 AM UTC

ChuckMcM wrote: post #104

xapata wrote: post #102

Earlier quoted context omitted.

While the words "decide" and "choice" have slightly different connotations, it's quite frustrating to hear such a just-so explanation without making clean definitions for the two terms. I guess in the end you back away from that particular distinction in favor of the incontrovertible "roles change". If you don't mind, could you rephrase your conjecture as a falsifiable hypothesis?

How about this, tell me if it works for you or not; A path is sequence of correlated activities that lead to a particular goal or deliverable. A choice can increase or decrease the total number of goals or deliverables. A decision can increase or decrease the success chances of a pre-existing goal or deliverable. Generally a startup CEO has one deliverable, the product. And all of their actions are decisions on how t…

That's much better. I don't mind arbitrary new definitions for words, so long as they're explicit and consistently used. However, you might find others like TheOtherHobbes more receptive if you use wholly new phrases to avoid namespace collisions.

Being skeptical of arbitrary new definitions is a good defense against intentional conflation of two definitions. I find psychology papers are frequently guilty of using a very narrow, specific definition for a word in part of their research then switching to a very broad definition for their conclusions.

Re: Ending the cult of the CEO

#170

Post by stupidhn » Tue, Apr 25, 2017, 12:09 PM UTC

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 mean shoot everyone loves Gabe Newell, but if he lost his job, what are his options? Not as many as me.

You don't honestly believe this, do you? Everyone here likes to rip on the "Business Guys", but despite what you may have heard, they aren't skilless. Gabe would have a new job tomorrow.