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CEOs are hugely expensive – why not automate them?

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Re: CEOs are hugely expensive – why not automate them?

#281

Post by robertlagrant »

xmprt wrote: post #237
woeirua wrote: post #116

I 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…

The problem I have with CEOs is when they're doing a good job they make $$$ but when they're doing a bad job they still make $$. When a company goes down, they have golden parachutes to ensure that they're safe. Meanwhile, workers get shafted.

CEOs are workers. If you're talking about people who don't work for the business, you might be thinking of shareholders?

Re: CEOs are hugely expensive – why not automate them?

#282

Post by DaniloDias »

munk-a wrote: post #202
DaniloDias wrote: post #193

Earlier quoted context omitted.

I find this statement strange. Curious if others experience aligns with mine: Being a CEO is all consuming. You don’t want to be a parent and a CEO, cause the company comes first. You don’t want to be married and a CEO, because the company comes first. If you could “automate” this job, the developers behind the scripts become de facto CEO. Their scripts cannot fail. They will have to make the same sacrifices as the m…

When I worked in the game industry QA folks were regularly asked to put in twelve to sixteen hours a day - they're sacrificing their health and lives for their jobs but without any promise of payout. Ditto for pretty much anyone else working on the bottom 3/4ths of the economy.

My immediate reaction is the diff between CEO and QA is that QA doesn’t negotiate well.

They’re willing to endure bad work for limited pay. You don’t want this type of person leading a company.

I’ve also worked (and left) the field of gaming QA. FWIW, I’m not trying to being controversial- this is my sincerely held belief. I think gaming QA is a good foot in the door to a career in tech, but something that should be abandoned as soon as you get a feel for what it takes to work in an agile environment and make your deliverables. The gaming industry seems like the place where you go to kill your health and happiness to me. As long as people keep signing up for the work, conditions will be awful.

Re: CEOs are hugely expensive – why not automate them?

#283

Post by k__ »

chrisseaton wrote: post #256
klyrs wrote: post #248

Earlier quoted context omitted.

The "invisible hand" of plutocrats isn't the traditional meaning of "market forces", is it?

Rich people's evil plan to give other people money and drive wages up. Got it.

People are always talking about the free market as if it was some kind of self regulating physical law of nature that could never be wrong.

What's so absurd to think that people from one class (CEOs/VC/etc) want to help people from that same class even if it's against the laws of the free market?

If I help someone who kinda identfies with me, it raises the chance that they will help me/my friends/my family in the future.

Re: CEOs are hugely expensive – why not automate them?

#284

Post by jordanpg »

koonsolo wrote: post #260
jordanpg wrote: post #207

I would love it if someone could explain to me like I'm 5, why it is exactly, that CEOs are so highly paid. I get that it's hard. I get that there are long hours. I get that it requires long-term strategic thinking. None of that helps me understand O(100M) "compensation." I'm pretty sure that executives get paid so much because of (a) their rolodex (ie. their ability to get certain people on the phone) and (b) becaus…

That is simple: because CEO's need to be the best of the best. Most professions require an average performer. Building my house didn't require the best of the best. Programming software doesn't require the best of the best. But there are other professions where you need (to be) the best of the best: athletes, musicians, authors, ... . Coincidentally also the professions where the top performers make a crazy amount of…

I don't agree that they are the "best of the best." Or at least it's not obvious to me that they are, in the same way a talented musician or athlete is.

The supply/demand theory only explains the high cost of CEOs if there is an extremely limited pool of them. Because I reject the premise that they are just so incredibly talented, there shouldn't be a limited pool of them.

I suspect the pool is limited, but not because CEOs are just so incredibly talented. I don't know exactly why, but I doubt it's raw talent. I suspect it has more to do with access, background, friends, networks, gumption, dedication, and luck.

Anyway, my objection is to the grotesque size of their compensation. Since I don't believe the "talent pool" theory, no matter how talented they may be, it cannot possibly be worth that much. Thus, the numbers are so high for some other reason, and now everyone is post-hoc convincing themselves that it makes sense. It does not. It makes no sense at all. The emperor has no clothes on. It is self-evidently absurd to imagine that this limited pool of executives has so much talent and is so small that they deserve to be paid 1000s of times more than the best physicists, physicians, artists, etc. the world has. It's bullshit. /rant

Re: CEOs are hugely expensive – why not automate them?

#285

Post by munk-a »

DaniloDias wrote: post #282
munk-a wrote: post #202

Earlier quoted context omitted.

When I worked in the game industry QA folks were regularly asked to put in twelve to sixteen hours a day - they're sacrificing their health and lives for their jobs but without any promise of payout. Ditto for pretty much anyone else working on the bottom 3/4ths of the economy.

My immediate reaction is the diff between CEO and QA is that QA doesn’t negotiate well. They’re willing to endure bad work for limited pay. You don’t want this type of person leading a company. I’ve also worked (and left) the field of gaming QA. FWIW, I’m not trying to being controversial- this is my sincerely held belief. I think gaming QA is a good foot in the door to a career in tech, but something that should be…

I would suggest a different take-away, it takes power and stability to negotiate power. Basically, you need to have a powerful position to gamble on securing better compensation. If minimum wage were a problem unique to QA[1] then that explanation might ring true but I think the fact that you see the same pattern of exploitation in fast-food and the service sector at large paints a clearer picture that our educational system is just failing to teach people they have personal value.

I do agree that the difference between a good CEO and a terrible CEO can be pretty stark - but I also think that the best CEO can't turn around a company rife with nepotism and other organizational diseases - the plebs contribute a lot more to company health than they're given credit for... That's my primary source of disagreement on CEO compensation - everyone else is being undervalued and so the creation of value is being misattributed to a CEO. The CEO should probably be the highest earner at nearly every company - but only rarely should the CEO earn five or six times that of someone in the mail room and we shouldn't see the 200:1 ratios that are relative common today[2].

1. It does have a unique exacerbating factor, every year a bunch of new grads think "Oh man, video games - I want to work on those" and thus there's a large pool of people willing to be paid peanuts to work in the field. This causes the experienced QA folks to have their labour devalued to compete with the large pool of free labour. I very much agree with your last few sentences - that's what seems to be the take-away for the gaming industry for me as well.

2. A random study - I know the numbers are in this ballpark but I'm not familiar with the specifics https://www.epi.org/publication/ceo-compensation-2018/

Re: CEOs are hugely expensive – why not automate them?

#286

Post by danaris »

fighterpilot wrote: post #268
warent wrote: post #265

Earlier quoted context omitted.

Going off on a tangent here, but I'm curious to know what would be meaningless and boring about it. This would permanently solve the first two foundations of Maslow's hierarchy of needs so people can focus on the top three. It could be argued that the truth is actually the reverse: it would enable most people to find a much deeper meaning, while only an exclusive few (probably mostly pathological people, like sociopa…

You're possibly right, but do people who inherit millions or win the lottery strike you as particularly happy after 10 years? Admittedly, I only have anecdotal data on that.

That's not generally a good measure, because a) the people who play the lottery tend to be poorer, and b) poorer people tend to have poorer financial literacy/education.

This means that they don't know what to do with that massive windfall, they manage it poorly or are taken advantage of, and end up unhappy. And the ones who do know what to do with it tend to do very boring things (set up iron-clad structured annuities or something, I imagine—I don't claim to have enough financial education to do it well myself!), and we don't hear about them because "guy won $500m 20 years ago, is living a comfortable but unremarkable life now" doesn't sell papers.

Note that this is also very different from how a UBI would affect people, because that would be moderate amounts of money regularly for life (y'know...rather like an iron-clad structured annuity); there's no way to "blow it" and end up with nothing.

People who inherit very large sums of money, but are not themselves born into wealth, are so rare as to be essentially a myth. There certainly aren't enough of them to make a reasonably rigorous sample size for a scientific study.

Re: CEOs are hugely expensive – why not automate them?

#287

Post by klyrs »

chrisseaton wrote: post #256
klyrs wrote: post #248

Earlier quoted context omitted.

The "invisible hand" of plutocrats isn't the traditional meaning of "market forces", is it?

Rich people's evil plan to give other people money and drive wages up. Got it.

You made the value judgement, not me. I'd put it down to "keeping up with the Joneses", personally.

Re: CEOs are hugely expensive – why not automate them?

#288

Post by watwut »

corpMaverick wrote: post #186
watwut wrote: post #49

Earlier quoted context omitted.

The high level paid positions dont seem to be filled with women in miniskirts. They are more likely to be filled by men according to pretty much all studies I have seen. If anyone is exploiting CEOs for personal benefit, miniskirts are not that.

Someone in the position of exploiting the miniskirt loop-hole. Is probably smart enough not to become a high level executive. And rather become the ex-trophy-wife and enjoy half the money with none of the responsibilities.

It is better to be executive then trophy wife. You have more agency that way, more respect and money are actually yours. Trophy wife are there to be looked at. Plus executive is not tied to n narcisstic partner that don't respect him. It is pretty easy to use money to controll trophy wife and let her know money are not hers. Harder with executive.

And you can be pretty incompetent and still be failing upward if CEO likes you. There is no stress from responsibility if such thing does not stress you out.

Smart mini skirt would took higher paid position and all those advantages of that was available. But, it is not. CEOs are I fact exploited differently and ultimately by dudes.

Re: CEOs are hugely expensive – why not automate them?

#289

Post by ridethebike »

When I was in university(mid 2000s) we had this subject called "AI fundamentals" - series of lectures + testing in the end(~2hours per week for 6 months), taught by respected faculty member (or so we thought), it was going to be awesome. What it actually turned out to be - lecture were dude talking non-stop things like (almost a quote by the way) "AI is not like regular app, it should be capable of taking task in form of 'go somewhere don't know where and bring me something I don't know what' and it would actually solve it. Having that would be true AI and that's what this all is about" and how great would be to have such AI and how close humanity is to it and yadda yadda yadda AI/tech dreamy stuff that you'd see in general media. Once in a while he would mention one or two concepts from AI theory and that would be it. And like that 6 months went by, we learned nothing, passed his "test" (which was pretty much questionnaire about all that blue-sky thinking) to get some default "pass" marks into diploma and that was it.

Lots of smart-y talk, ~zero useful content.

This is what this article is.

HN community provided way more substance in a single (of several) threads on "is ceo pay fair" topic.

Re: CEOs are hugely expensive – why not automate them?

#290

Post by Traster »

NovemberWhiskey wrote: post #113
Traster wrote: post #48

Earlier quoted context omitted.

The simple answer is that people don't hire cheaper CEOs because the people who hire CEOs are the boards of companies and the boards of companies are mainly staffed by CEOs of other companies who unsurprisingly are incentivized to advocate for higher CEO pay.

The average size of the board of a company in the S&P 500 is 10.8 directors. However, only 43% of CEOs serve on any outside boards. The implication is that the vast majority of board directors are not CEOs of large companies. Data from https://www.briefinggovernance.com/2016/12/board-composition...

It's more appropriate to think of this as a class of "the pool of people who might become CEO". It's CEO, CTO, CIO, board members who also have their compensation decided by similar mechanisms, retired CXOs.

Let's take Intel as an example - Retired CEO of medtronic, CEO of Intel, Sequoia, Senior position at Square, former CEO of a foundation, Professor, EVP and CFO Boeing, former CEO of HP, CEO of EA, Darwin Capital.

So in total, of a board of 10, 6 of them are current or former CXOs, 1 is a professor, 2 are VCs and 1 is a senior CXO style position. Yet most of those wouldn't be counted as "CEOs" because they're "retired".

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