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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?

#311

Post by thorwasdfasdf »

ARandomerDude wrote: post #42

CEOs 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…

That assumes you can predict which CEO will do better, not at all a certain thing.

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

#312

Post by xadhominemx »

hammock wrote: post #137
MattGaiser wrote: post #118

Earlier quoted context omitted.

You need profits for stock buybacks. Buybacks are just superior to dividends as a way to return capital.

>You need profits for stock buybacks. You merely need capital. Lots of buybacks are funded by debt

Leveraged buybacks reduce the multiple. It’s not a cheat code to make your stock go up.

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

#313

Post by teawrecks »

fighterpilot wrote: post #163
ab111111111 wrote: post #149

Earlier quoted context omitted.

Sure. Quite. But why not try developing an AI to replace them that can make you a >5x return?

Doing this would require an AGI, which is currently out of reach. A more useful/practical question would be: what tools can we build to assist CEOs in their decision making and make them more productive? I think the answer will come out as "not much", since the job is so high level and abstract. You'd have a better time targeting lower-skilled jobs or technical jobs like software engineering.

Explain why an AGI is needed? Because to me, invoking the need for an AGI sounds equivalent to saying you don't understand the problem space.

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

#314

Post by SavantIdiot »

koonsolo wrote: post #270
SavantIdiot wrote: post #124

Earlier quoted context omitted.

So you never voice opinions about topics that you aren't in expert on, otherwise you'd be a flaming hypocrite, right? Cool!

The thing with opinions is that everybody has one. I much rather read insightful knowledge from people that know what they are talking about. And that is my opinion.

Sorry, us plebes down here in the dirt bow to your lofty white high-horse.

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

#315

Post by imtringued »

sn41 wrote: post #104
hervature wrote: post #74

Earlier quoted context omitted.

I find it funny that people throw out decades of history. Options contracts, as you propose, introduce the incentive for extreme risk taking because doing "normal boring" things literally doesn't pay. It's one of the main arguments for stock compensation because if the company does poorly, the CEO directly feels it where it hurts (the wallet).

And so they go for stock buyback strategies. Reduce the supply, the stock skyrockets, cash in, leave.

The only reason I dislike stock buybacks is that they encourage "riding" the bull market. Number goes up, people buy into the company, company does a stock buyback to keep the momentum, numbers go up even further, even more people buy into the stock, none of them caring about the actual company they are buying into, they just see the numbers.

Dividends are boring, we need more boring companies doing boring productive work.

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

#316

Post by chrisseaton »

klyrs wrote: post #287
chrisseaton wrote: post #256

Earlier quoted context omitted.

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.

"keeping up with the Joneses" by... pushing the Joneses up? Does not compute.

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

#317

Post by imtringued »

hammock wrote: post #137
MattGaiser wrote: post #118

Earlier quoted context omitted.

You need profits for stock buybacks. Buybacks are just superior to dividends as a way to return capital.

>You need profits for stock buybacks. You merely need capital. Lots of buybacks are funded by debt

A lot of the companies getting into debt have their own cash reserves.

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

#318

Post by imtringued »

sokoloff wrote: post #228
enos_feedler wrote: post #185

Earlier quoted context omitted.

This is pretty insane actually. Is there a common metric that captures which companies are funding buybacks with debt? or is it easy to figure out? I am not a finance person.

With interest rates as low as they are (on both government backed and corporate investment grade bonds) and a reasonable forecast of higher inflation ahead, why shouldn't companies borrow for a variety of corporate activities, both operational and treasury?

They should, and they should use the money to do the corporate activities you mentioned.

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

#319

Post by fighterpilot »

teawrecks wrote: post #313
fighterpilot wrote: post #163

Earlier quoted context omitted.

Doing this would require an AGI, which is currently out of reach. A more useful/practical question would be: what tools can we build to assist CEOs in their decision making and make them more productive? I think the answer will come out as "not much", since the job is so high level and abstract. You'd have a better time targeting lower-skilled jobs or technical jobs like software engineering.

Explain why an AGI is needed? Because to me, invoking the need for an AGI sounds equivalent to saying you don't understand the problem space.

The job of a CEO would need AGI because it's the type of job that requires understanding of human social dynamics, market context, regulatory context, etc. Such cross domain multi faceted expertise is the type of thing that needs general and broad intelligence to do effectively.

Hire people, fire people, pitch investors, manage direct reports across multiple business lines, understand what's going on in the world and market, set a product vision/direction, shape the culture of the org, etc etc. That's AGI territory.

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

#320

Post by anm89 »

There's a funny thing about articles like this. There is zero overlap between people who actually have any control over this matter and the people who hold this opinion by nature of the fact understanding enough about how businesses work to understand why this makes no sense is exclusive to to being in a role to implement this suggestion.

So basically it doesn't matter how many people believe this because the people who hold the opinion have zero overlap with the group of people who practically make decisions about CEO roles.

I guess maybe, although unlikely, temporarily there could be an overlap between the two groups but that situation would quickly resolve itself.

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