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Many companies aren’t prepared to replace underperforming CEOs

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Re: Many companies aren’t prepared to replace underperforming CEOs

#131

Post by jandrese »

jandrewrogers wrote: post #120
hypersoar wrote: post #94

I'm thinking of a Jadzia Dax in Star Trek: Deep Space Nine. Jadzia is among the lucky few among her race, the Trill, implanted with a "symbiote" carrying the memories of all of its previous hosts. Carrying a symbiote is an unrealized dream for many Trill who wash out of the rigorous application and training process and are told they're incompatible. In one episode, one such disgruntled fellow tries to steal Jadzia's.…

> Plenty of middle-managers could do as well as the average CEO. I’ve worked with several CEOs and countless senior executives, both at very large companies and small, who had varying degrees of competency. I don’t think this is generally true. Being successful at that job entails a specialized skill set that is rarely evident in middle management. What you are “managing” at the most senior levels of large organizati…

I think you are right that the skills to be a successful CEO are rare, but I think the main problem is that the hiring process for CEO is so incestual that the majority of the people who would be good for the job aren't even considered. Instead the applicant pool consists of "son of current CEO", "son of CEO's favorite politician", and several "CEO that is currently failing a different company". The applicant pool feels small because they never look beyond the boundaries of "billionaire families who go to the same country club".

There are a few CEOs that seem to truly make a difference, and maybe those would be worth the money, but for the most part companies are grossly overpaying for people who are mediocre to terrible at the job and will deploy the golden parachute in a couple of years to go fail at a different company.

Re: Many companies aren’t prepared to replace underperforming CEOs

#132

Post by jandrese »

Cupertino95014 wrote: post #129

I've seen a couple of CEO replacements, who were brought in for various reasons. You'd expect a B-school like Stanford to stress "planning" since that's their solution to everything. For the new CEOs I've seen, "they've been there before" seems to receive WAY more weight than it ought to. Often they're people who just keep failing up. You can take the Civil War as a useful analogy. Neither Grant nor Sherman had reall…

The Union had to fire a lot of generals before settling on Grant and Sherman.

Re: Many companies aren’t prepared to replace underperforming CEOs

#133

Post by [deleted] »

hypersoar wrote: post #94

I'm thinking of a Jadzia Dax in Star Trek: Deep Space Nine. Jadzia is among the lucky few among her race, the Trill, implanted with a "symbiote" carrying the memories of all of its previous hosts. Carrying a symbiote is an unrealized dream for many Trill who wash out of the rigorous application and training process and are told they're incompatible. In one episode, one such disgruntled fellow tries to steal Jadzia's.…

[deleted]

Re: Many companies aren’t prepared to replace underperforming CEOs

#134

Post by xdavidliu »

googlryas wrote: post #114
KerrAvon wrote: post #107

Earlier quoted context omitted.

I mean, we don't need to pay them that much. These obscene salaries weren't the norm a few decades ago. They're the end result of Reaganite tax policies failing to tax super-high-earners progressively.

That's only one part of the equation. But simply because the individuals get to keep their cash doesn't mean the companies need to give it to them.

In fact, I see no obvious connection between the marginal tax rate and how much companies choose to set CEO's pretax compensation. Can grandparent explain?

Re: Many companies aren’t prepared to replace underperforming CEOs

#135

Post by yellowstuff »

hypersoar wrote: post #94

I'm thinking of a Jadzia Dax in Star Trek: Deep Space Nine. Jadzia is among the lucky few among her race, the Trill, implanted with a "symbiote" carrying the memories of all of its previous hosts. Carrying a symbiote is an unrealized dream for many Trill who wash out of the rigorous application and training process and are told they're incompatible. In one episode, one such disgruntled fellow tries to steal Jadzia's.…

CEOs have a ton of leverage and use it to use to their personal benefit. But they really are important- stock prices will change the value of a company by hundreds of millions of dollars based on a good or bad CEO joining or leaving, and it's not like the investors are all in on the scam.

There are mechanisms in the existing system to fight high CEO pay, EG activist investors will get involved with companies and occasionally force CEOs out or cut their pay.

Re: Many companies aren’t prepared to replace underperforming CEOs

#136

Post by hllooo »

hn_throwaway_99 wrote: post #10
fdgsdfogijq wrote: post #3

Theres no accountability above a certain level. In a stable business (am excluding new innovations), proving or disproving the performance of an entire org, let alone company, is extremely difficult. Individual contributors are much easier to judge, and thus live lives of sub-ordinance. Their inputs and outputs can be easily mapped. The trick of working, and thus living a nice life, is to rise to a level of plausible…

Wut? At higher level in an organization, there is a much greater chance that you will be fired for things that you really have little control over. Now, at the highest levels, the compensation usually matches this level of uncertainty, sometimes with golden parachutes as well, so if you are fired you're still sitting pretty. But, for me, I wouldn't define "a nice life" with having to deal with that much stress as hav…

That's partly the point though, isn't it? You're not accountable for your performance, you're accountable for the performance of the company. And the performance of the company could be extremely good or extremely bad, very much independently of your contributions.

Re: Many companies aren’t prepared to replace underperforming CEOs

#137

Post by User23 »

kibwen wrote: post #128
lovich wrote: post #50

Earlier quoted context omitted.

There’s nothing you can do because the companies are dictatorships or oligarchies at best, not democracies or meritocracies. If he’s the founder presumably he had enough ownership in the company to force the company to keep him in that position. Changing that up requires a radical redesign of how companies are legally constrained in the US or a cultural change that causes an expectation of worker ownership so that th…

Employee-owned companies aren't entirely unheard-of in the US. Legally, they're structured as companies where employees own more than 50% of its shares via an ESOP: https://en.wikipedia.org/wiki/Employee_stock_ownership

A fun example along those lines is the Green Bay Packers[1]. They are a public non-profit whose shares are largely owned by members of the Green Bay community. Shareholding is mostly a matter of community pride, as it confers very few rights[2].

It's actually a pretty good model, and I wonder why it isn't used for other municipal assets.

[1] https://en.wikipedia.org/wiki/Green_Bay_Packers,_Inc.

[2] https://www.wsj.com/articles/BL-TOTALB-269

Re: Many companies aren’t prepared to replace underperforming CEOs

#138

Post by fdgsdfogijq »

FredPret wrote: post #98
fdgsdfogijq wrote: post #3

Theres no accountability above a certain level. In a stable business (am excluding new innovations), proving or disproving the performance of an entire org, let alone company, is extremely difficult. Individual contributors are much easier to judge, and thus live lives of sub-ordinance. Their inputs and outputs can be easily mapped. The trick of working, and thus living a nice life, is to rise to a level of plausible…

I’d say this is false. Accountability becomes easier as you go up. For then owner, everything is on them. They’re the owner. They pick the CEO. They can lose their money. For the CEO, everything is on them as well, but the worst that can happen is they get sued or fired. They pick the people who are responsible for sales, costs, etc. Any failure in these areas is very simple to attribute to the executive in question…

A large company is like an oil tanker. Its never clear whether that oil tanker can be turned fast enough to avoid the ice berg. And thus, its never clear whether its the CEOs fault, or the circumstances. Too much complexity.

Re: Many companies aren’t prepared to replace underperforming CEOs

#139

Post by robotresearcher »

KerrAvon wrote: post #107
hypersoar wrote: post #94

I'm thinking of a Jadzia Dax in Star Trek: Deep Space Nine. Jadzia is among the lucky few among her race, the Trill, implanted with a "symbiote" carrying the memories of all of its previous hosts. Carrying a symbiote is an unrealized dream for many Trill who wash out of the rigorous application and training process and are told they're incompatible. In one episode, one such disgruntled fellow tries to steal Jadzia's.…

I mean, we don't need to pay them that much. These obscene salaries weren't the norm a few decades ago. They're the end result of Reaganite tax policies failing to tax super-high-earners progressively.

You might think that paying a 45% marginal rate tax instead of 94% would mean you could be paid less while keeping more! How did lowering personal income tax increase compensation?

Re: Many companies aren’t prepared to replace underperforming CEOs

#140

Post by idontpost »

xdavidliu wrote: post #134
googlryas wrote: post #114

Earlier quoted context omitted.

That's only one part of the equation. But simply because the individuals get to keep their cash doesn't mean the companies need to give it to them.

In fact, I see no obvious connection between the marginal tax rate and how much companies choose to set CEO's pretax compensation. Can grandparent explain?

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