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CEOs are hugely expensive – why not automate them?
171–180 of 363 posts
Re: CEOs are hugely expensive – why not automate them?
#172Earlier quoted context omitted.
Walmart's annual profit is ~$130B so what I'm seeing is that yes in fact it's perfectly feasible for 1.6M Walmart employees to get a $40K/yr raise.
It's also perfectly feasible for them to pay more rent for their stores, or pay their suppliers more for their products, but why would they?
The general idea is that if your workers are well paid and the store is well kept (if you would accept that "pay more rent" is generally the same as "spending more on the building") then customers will be more happy/satisfied and thus return more often, spend more, and recommend your store to friends thus increasing your revenue.
Re: CEOs are hugely expensive – why not automate them?
#173I too used to think that CEOs were a waste of resources, and that they had minimal if any impact on most companies. But I think people grossly underestimate how important CEOs are, because the vast majority of them do a decent job. When you swap out somebody who does a decent job for another person who performs at about the same level it's not really that noticeable. That said, you'll come to appreciate those "decent…
I do agree, in German we have an idiom "Der Fisch stinkt vom Kopf her" ("a fish rots from the head down") to describe precisely how bad management cause ripples all the way down. That being said, CEOs are still prime candidates for automatization. I mean, surely nobody wants to replace good CEOs with bad software but rather with equally or better performing software equivalents. Additionally, one day it might be easier to ensure an AI CEO makes better moral/environmental decisions than his human counterpart.
Re: CEOs are hugely expensive – why not automate them?
#174CEOs aren't paid for the day-to-day value they provide to the company. They're paid for the long-term, strategic value the owners think they might provide the company in comparison to other candidates. So if you think CEO Candidate X will make you a 3x return on your investment, but CEO Candidate Y will make you a 5x return, it's almost certainly worth it to pay him/her the extra $200K to get you there, if that's the…
Sure. Quite. But why not try developing an AI to replace them that can make you a >5x return?
No reason not to try. That said I don't think it's possible. I love the thought that we can automate that but realistically not viable in the next 50 years. Maybe a bot version of a CEO but that provides little value.
Re: CEOs are hugely expensive – why not automate them?
#175Earlier quoted context omitted.
Careful what you wish for here. I suspect that if an AI can replace the job of a CEO then all other jobs will be gone as well.
The fact that the western society finds job automation to be a danger (or dystopian) is an indicator that something is severely dated at best--or dangerously corrupt at worst--with our economic system. Such a thing would be a utopian outcome. If this kind work can be automated in a humane way, then the vast majority of work can be automated. That means people can be freed to spend every waking moment on art and play.
How are resources allocated in this utopia?
Re: CEOs are hugely expensive – why not automate them?
#176I can't help but feel that CEO's are over-valued and it's fundamentally an attribution problem as it's hard to know how much value they actually add. A comparison would be to fund managers and how the rise of index funds showed they actually added very little value in many cases, and weren't worth their fees.
The issue with CEO pay, as well as pay for fund managers, is basically the same. It's clearly understood as a principal/agent problem, to use economics jargon.[0] Here's how it works: 1) Money is invested in companies by a diffuse set of investors. That diffuse group is unified and the decisions are made by people responsible for managing money. 2) They invest it with the intention of having it go into the productive…
> at the end of the day what is happening is that the people who are responsible for distributing resources to a common enterprise are taking more and more of it and keeping it
I bet you think business is a zero sum game.
Re: CEOs are hugely expensive – why not automate them?
#177Earlier quoted context omitted.
Walmart's annual profit is ~$130B so what I'm seeing is that yes in fact it's perfectly feasible for 1.6M Walmart employees to get a $40K/yr raise.
Please don't make up stuff on HN - if you don't have something accurate to share or if it wouldn't support your point please still avoid making things up. Walmart's profit margin is generally 2-3% and is generally $10 - $20B per year. [1] And if Walmart were making $100B, the comp for their CEO be far from a major expense to the corp. [1] - https://finance.yahoo.com/quote/WMT/financials/
I think you might be missing the part that says "All numbers in thousands" on that table you've linked.
Re: CEOs are hugely expensive – why not automate them?
#178Earlier quoted context omitted.
Because the people who own companies are either a) disinterested index funds, or b) members of the same plutocrat class as the board members and CEOs.
Why are the people in b) okay with overpaying for something?
Because they're also getting overpayed in a similar situation at a different company. It's in their direct interest to raise the "market rate"
Re: CEOs are hugely expensive – why not automate them?
#179Earlier quoted context omitted.
And you have only one CEO - so their comp is expensive, but not hugely expensive relative to total org costs. Apple has Tim Cook. In terms of investors evaluation of his ability to generate profits - let's say apple is going to do $400B in sales, and you think Tim's approach over time will yield a 3% improved margin. Is he then worth $12B/year? CEO's have enormous influence on a companies direction. Investors will au…
Walmart's annual profit is ~$130B so what I'm seeing is that yes in fact it's perfectly feasible for 1.6M Walmart employees to get a $40K/yr raise.
You seem to be misunderstanding what "Gross Profit" represents.
Re: CEOs are hugely expensive – why not automate them?
#180Because CEO-bot cannot attend a meeting longer than 1 hour without a cache reset or it might develop a personality or become exploitable in some way.
Also because money doesn't grow on trees.
On the plus side, it would be quite convenient for the police if all CEOs were hardcoded to prevent all law violations and unable to by passivity allow a human to come to harm.