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Source: (consider it)
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Thread: "We need to pay that to get people of the right calibre..."
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Jay-Emm
Shipmate
# 11411
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Posted
Footballers also have regulations strongly favouring really needing the 'best'.
Which makes sense as though I'd imagine a team of 22 Jay-emms might make things hard for Man U (and be a 1/1000th of the price) it wouldn't be football, and it would be odd if you get points for losing but putting up a good show or scoring in the 91st minute (unless you're Man U).
But does make you wonder if there should be more regulation in the opposite direction as well.
Posts: 1643 | Registered: May 2006
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Marvin the Martian
Interplanetary
# 4360
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Posted
quote:
Originally posted by chris stiles:
quote:
Originally posted by Marvin the Martian:
The point is, by hiring one of the best there's always the possibility of failure, but there's also the possibility of success.
The failure rate of companies exhibits a natural distribution (a similar distribution for species dying out), which suggests that bosses are no more able to prevent the demise of their firms than animals can forsee their extinction:
http://arxiv.org/pdf/cond-mat/0212186.pdf
A lot of journalism on the effects of CEOs on firms seem to commit the attribution fallacy.
That's not a rebuttal of what I said. If it's known that a given number of firms are going to fail in any given period, then the competition between them for the best CEOs is going to be even more fierce, because none of them wants to be one of the failures.
To go back to the football analogy, 15% of Premiership teams get relegated every single season. Does that mean that football managers are unable to do anything about whether their team is relegated or not?
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Hail Gallaxhar
Posts: 30100 | From: Adrift on a sea of surreality | Registered: Apr 2003
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chris stiles
Shipmate
# 12641
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Posted
quote:
Originally posted by Marvin the Martian:
That's not a rebuttal of what I said. If it's known that a given number of firms are going to fail in any given period, then the competition between them for the best CEOs is going to be even more fierce, because none of them wants to be one of the failures.
Of course it is - otherwise the statistics wouldn't exhibit that sort of distribution - there is no law that states 15% of firms will fail (hence why the comparison with the premiership doesn't bear out).
quote:
To go back to the football analogy, 15% of Premiership teams get relegated every single season. Does that mean that football managers are unable to do anything about whether their team is relegated or not?
Possibly, yes:
http://econpapers.repec.org/paper/pramprapa/11030.htm
At the very least this suggests that there is going to be a measurement problem in working out what factor of success is likely to be attributed to the chap at the top.
In the worst case we are just paying for a lucky monkey in a suit. Consider that fund management is many times less complex than managing a multinational - it would be surprising if the situation for CEOs was any better than that of fund managers (that generally as a group they perform no better than you would expect given chance and survivor bias).
Posts: 4035 | From: Berkshire | Registered: May 2007
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Marvin the Martian
Interplanetary
# 4360
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Posted
quote:
Originally posted by chris stiles:
quote:
Originally posted by Marvin the Martian:
That's not a rebuttal of what I said. If it's known that a given number of firms are going to fail in any given period, then the competition between them for the best CEOs is going to be even more fierce, because none of them wants to be one of the failures.
Of course it is - otherwise the statistics wouldn't exhibit that sort of distribution - there is no law that states 15% of firms will fail (hence why the comparison with the premiership doesn't bear out).
In a finite market, any growth by one company means one or more other companies will shrink. Since very few of the companies are likely to agree to a state of stasis where none of them ever grow, it's inevitable that some will fail. The only thing the companies can do is try to make sure they're not the ones going bust, and that's where hiring the best leaders comes in.
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Hail Gallaxhar
Posts: 30100 | From: Adrift on a sea of surreality | Registered: Apr 2003
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Enoch
Shipmate
# 14322
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Posted
This is a bit like politicians saying every school must be in the upper percentile. It demonstrates that whatever school they went to failed in its task of inculcating very basic maths.
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Brexit wrexit - Sir Graham Watson
Posts: 7610 | From: Bristol UK(was European Green Capital 2015, now Ljubljana) | Registered: Nov 2008
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Marvin the Martian
Interplanetary
# 4360
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Posted
How does that follow from what I said?
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Hail Gallaxhar
Posts: 30100 | From: Adrift on a sea of surreality | Registered: Apr 2003
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chris stiles
Shipmate
# 12641
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Posted
quote:
Originally posted by Marvin the Martian:
In a finite market, any growth by one company means one or more other companies will shrink. Since very few of the companies are likely to agree to a state of stasis where none of them ever grow, it's inevitable that some will fail. The only thing the companies can do is try to make sure they're not the ones going bust, and that's where hiring the best leaders comes in.
Actually, on that basis all you need to do is hire someone slightly better than everyone else.
However - if - as the footballing example above shows - it's hard to tell who would improve the performance of a 'firm' of a few dozen people, what hope do you have of predicting who would be a good boss of a multinational? [Furthermore; if you are on the right, at some point Hayek's critique of central planning starts to apply].
Especially as:
http://repec.org/sce2004/up.28483.1076498136.pdf
"the clear implication is that firms have very limited capacities to acquire knowledge about the true impact of their strategies."
That boards have a track record of interspersing failed appointments with apparently successful ones tends to underline this.
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Marvin the Martian
Interplanetary
# 4360
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Posted
quote:
Originally posted by chris stiles:
quote:
Originally posted by Marvin the Martian:
In a finite market, any growth by one company means one or more other companies will shrink. Since very few of the companies are likely to agree to a state of stasis where none of them ever grow, it's inevitable that some will fail. The only thing the companies can do is try to make sure they're not the ones going bust, and that's where hiring the best leaders comes in.
Actually, on that basis all you need to do is hire someone slightly better than everyone else.
Yes, that's what I said. "Slightly better than everyone else" is still "the best".
quote:
However - if - as the footballing example above shows - it's hard to tell who would improve the performance of a 'firm' of a few dozen people, what hope do you have of predicting who would be a good boss of a multinational?
The same way you predict who will be good in any job, I imagine - look at their past record and hold an interview.
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Hail Gallaxhar
Posts: 30100 | From: Adrift on a sea of surreality | Registered: Apr 2003
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lilBuddha
Shipmate
# 14333
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Posted
It was several of "the best" who sent the world economy on an express lift to the cellar.
So, point to you in saying CEOs can make a difference.
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I put on my rockin' shoes in the morning
Hallellou, hallellou
Posts: 17627 | From: the round earth's imagined corners | Registered: Dec 2008
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Marvin the Martian
Interplanetary
# 4360
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Posted
quote:
Originally posted by lilBuddha:
It was several of "the best" who sent the world economy on an express lift to the cellar.
So, point to you in saying CEOs can make a difference.
Are you suggesting that having worse CEOs in those jobs would have somehow saved the economy from crashing?
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Hail Gallaxhar
Posts: 30100 | From: Adrift on a sea of surreality | Registered: Apr 2003
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lilBuddha
Shipmate
# 14333
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Posted
quote:
Originally posted by Marvin the Martian:
You have to remember that a good CEO cannot guarantee success, but a bad CEO can guarantee failure.
Dude! I am starting a PR firm and you are my first hire.
That is as beautiful a line of bullshit as I have ever read. Truly masterful spin.
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I put on my rockin' shoes in the morning
Hallellou, hallellou
Posts: 17627 | From: the round earth's imagined corners | Registered: Dec 2008
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lilBuddha
Shipmate
# 14333
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Posted
quote:
Originally posted by Marvin the Martian:
quote:
Originally posted by lilBuddha:
It was several of "the best" who sent the world economy on an express lift to the cellar.
So, point to you in saying CEOs can make a difference.
Are you suggesting that having worse CEOs in those jobs would have somehow saved the economy from crashing?
I am suggesting that those were the worst. Or, perhaps, simply just a little bit worse.
These were people hired because they were supposed to be good. Because others had viewed their track record, interviewed them and hired them.
Few, if any, did not see consequences in their actions. It was greed which pushed things over the edge and the general lack of accountability which emboldened them.
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I put on my rockin' shoes in the morning
Hallellou, hallellou
Posts: 17627 | From: the round earth's imagined corners | Registered: Dec 2008
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chris stiles
Shipmate
# 12641
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Posted
quote:
Originally posted by Marvin the Martian:
quote:
However - if - as the footballing example above shows - it's hard to tell who would improve the performance of a 'firm' of a few dozen people, what hope do you have of predicting who would be a good boss of a multinational?
The same way you predict who will be good in any job, I imagine - look at their past record and hold an interview.
The evidence in those papers point strongly to an alternate conclusion - namely that most of the 'past record' is attributable to luck [in the same way that studies on the performance gains attained by fund managers - operating with significantly fewer variables - also indicates].
Posts: 4035 | From: Berkshire | Registered: May 2007
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LeRoc
Famous Dutch pirate
# 3216
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Posted
quote:
Originally posted by Marvin the Martian:
quote:
Originally posted by lilBuddha:
It was several of "the best" who sent the world economy on an express lift to the cellar.
So, point to you in saying CEOs can make a difference.
Are you suggesting that having worse CEOs in those jobs would have somehow saved the economy from crashing?
It suggests that the best-paid CEOs often aren't the best.
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I know why God made the rhinoceros, it's because He couldn't see the rhinoceros, so He made the rhinoceros to be able to see it. (Clarice Lispector)
Posts: 9474 | From: Brazil / Africa | Registered: Aug 2002
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Marvin the Martian
Interplanetary
# 4360
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Posted
Are you people really suggesting that who leads a company is irrelevant? That you or I could start as CEO of any Fortune 500 company tomorrow and do just as good a job as whoever is in that role today? Chris certainly seems to be trying to suggest that.
It's obvious to me that a company will always want to attract the best possible person to be its CEO. And to do that, it will have to offer a salary/benefits package that's appealing enough to tempt that person away from whatever job they're currently in. And every new CEO salary/benefits package affects what will be considered attractive in the next one. There aren't many people in the world who are capable of doing a very good job at that level, making it a seller's market (whereas at the level where I operate there are tens of thousands of people who could do a very good job, making it a buyer's market). And note, again, that I said "capable of..." not "guaranteed to...".
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Hail Gallaxhar
Posts: 30100 | From: Adrift on a sea of surreality | Registered: Apr 2003
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Marvin the Martian
Interplanetary
# 4360
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Posted
quote:
Originally posted by LeRoc:
quote:
Originally posted by Marvin the Martian:
quote:
Originally posted by lilBuddha:
It was several of "the best" who sent the world economy on an express lift to the cellar.
So, point to you in saying CEOs can make a difference.
Are you suggesting that having worse CEOs in those jobs would have somehow saved the economy from crashing?
It suggests that the best-paid CEOs often aren't the best.
Or maybe it suggests that even the best get it wrong occasionally.
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Hail Gallaxhar
Posts: 30100 | From: Adrift on a sea of surreality | Registered: Apr 2003
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LeRoc
Famous Dutch pirate
# 3216
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Posted
quote:
Marvin the Martian: Or maybe it suggests that even the best get it wrong occasionally.
On what basis do you call them 'the best'? Just on the fact that they charge high amounts?
quote:
Marvin the Martian: Are you people really suggesting that who leads a company is irrelevant?
No, I'm not. But you are confusing 'well-paid' with 'good'. What you seem to be trying to say is:- If you contract a 'cheap' CEO, you can be sure that he won't do a good job.
- If you contract an 'expensive' CEO, then at least you'll have a chance that he might do a good job.
- Therefore, it makes sense to contract an expensive CEO.
You don't have evidence for your statement 1, and even then, it isn't a very strong case to spend on an expensive CEO just on the chance that he might be good. It depends a lot on how big this chance is, and I've seen enough examples that suggest that it isn't very big.
I have the feeling that there is something of a personality cult going on. Savvy CEO's charge high amounts. Companies then think "if he charges this much, he must be good" and disregard his past results.
My solution would be to have a lower budget for CEO's and a selection process that is more focused on actual qualities.
[ 07. November 2013, 16:20: Message edited by: LeRoc ]
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I know why God made the rhinoceros, it's because He couldn't see the rhinoceros, so He made the rhinoceros to be able to see it. (Clarice Lispector)
Posts: 9474 | From: Brazil / Africa | Registered: Aug 2002
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Doc Tor
Deepest Red
# 9748
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Posted
quote:
Originally posted by Marvin the Martian:
Are you people really suggesting that who leads a company is irrelevant? That you or I could start as CEO of any Fortune 500 company tomorrow and do just as good a job as whoever is in that role today? Chris certainly seems to be trying to suggest that.
I would suggest that any decent actor could take that job, since the chief role of a CEO seems to be convincing the shareholders they're the CEO of a massive corporation and they're totally worth the money.
Actual competence is, apparently, optional. And actors would make far better liars, which is also part of the job.
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Forward the New Republic
Posts: 9131 | From: Ultima Thule | Registered: Jul 2005
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lilBuddha
Shipmate
# 14333
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Posted
quote:
Originally posted by Marvin the Martian:
Are you people really suggesting that who leads a company is irrelevant? That you or I could start as CEO of any Fortune 500 company tomorrow and do just as good a job as whoever is in that role today? Chris certainly seems to be trying to suggest that.
Unless a CEO implements major changes, it is difficult to track their effectiveness. The larger the company, the more this is true. There are, generally, many variables in a companies success. Only some of which are internal.
Another problem of tracking large businesses is their inertia. If bad decisions always sank a business, IBM would no longer be a going concern.
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I put on my rockin' shoes in the morning
Hallellou, hallellou
Posts: 17627 | From: the round earth's imagined corners | Registered: Dec 2008
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quetzalcoatl
Shipmate
# 16740
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Posted
This kind of thing seems to happen in my profession (therapy and counselling), as it's well known, that if you weary of low-paid work, the trick is to market your skills to various companies, under some kind of oleaginous heading, as 'Skill set training for managers', or whatever, and whatever you do, charge them an arm and a leg. If you don't, they will probably think you're crap. Thus, maybe you could start at 3 grand a day for small groups, and go up to 5 grand a day for larger ones. Look at me, I did that, and I dine on caviar and Kobe beef every night. I made that bit up.
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I can't talk to you today; I talked to two people yesterday.
Posts: 9878 | From: UK | Registered: Oct 2011
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chris stiles
Shipmate
# 12641
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Posted
quote:
Originally posted by Marvin the Martian:
Are you people really suggesting that who leads a company is irrelevant? That you or I could start as CEO of any Fortune 500 company tomorrow and do just as good a job as whoever is in that role today? Chris certainly seems to be trying to suggest that.
No. The pool of possible CEOs is far wider than the pool of actual CEOs. Generally all you want is someone personable, with some charisma who is a decent operational manager who isn't going to embarrass himself. You are trying to give people confidence by hiring someone who is a known quantity in that market (this incidentally would explain why, bleatings to the contrary, very few British CEOs go on to run American companies).
What you actually get is a situation where more than 50% of companies attempt simultaneously to pay within the top decile of possible salaries. Which is why the salaries of executives are not really elastic with respect to performance. In good times, pay goes up, in bad times pay either still goes up, or doesn't fall as fast.
Again, compare this with the situation of fund managers. They work with far fewer variables, and their performance is measured very exactly on a yearly basis. There have been numerous studies done that show that past performance does not imply future performance, which again suggests that fund performance is largely attributable to luck and survivor bias rather than some X factor on the part of the fund managers.
A run of bad luck that would take out a small company is survivable by a large company with a large asset base. Similarly a period of growth after decline can simply be a reversion to mean (which is what that football example shows btw).
It may well be that part of a firms performance is down to performance of the man at the top; what all studies show though is that we are currently unable to measure this factor and frequently confuse it with other things entirely.
Posts: 4035 | From: Berkshire | Registered: May 2007
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chris stiles
Shipmate
# 12641
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Posted
quote:
Originally posted by quetzalcoatl:
If you don't, they will probably think you're crap. Thus, maybe you could start at 3 grand a day for small groups, and go up to 5 grand a day for larger ones.
Incidentally, the consulting industry has refined this to a fine art. A graduate one day out of uni from one of the top firms, in a suit, on customer premises will cost in excess of 1500+ a day.
Posts: 4035 | From: Berkshire | Registered: May 2007
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LeRoc
Famous Dutch pirate
# 3216
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Posted
The same happens in my line of work with regards to 'consultants'. Organizations pay them big bucks to 'facilitate processes' where they do nothing but talk absolute crap. But they must be good, because they cost € 40,000. The only understandable conclusion they draw for the organisation at the end of this process is that you need to hire them again for a 'follow-up process'.
All of the organization engages in some kind of double-talk, repeating the lingo he used without understanding a word of it, in order to be perceived as 'down with it'. And if you're the only one in the organisation who points out that it's all utter bullshit, you're just not 'down with the flow'.
[ 07. November 2013, 16:56: Message edited by: LeRoc ]
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I know why God made the rhinoceros, it's because He couldn't see the rhinoceros, so He made the rhinoceros to be able to see it. (Clarice Lispector)
Posts: 9474 | From: Brazil / Africa | Registered: Aug 2002
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Enoch
Shipmate
# 14322
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Posted
quote:
Originally posted by Marvin the Martian:
How does that follow from what I said?
Sorry, Marvin, I wasn't replying to your specific comment, but to the way the thread seemed to be going over a series of posts.
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Brexit wrexit - Sir Graham Watson
Posts: 7610 | From: Bristol UK(was European Green Capital 2015, now Ljubljana) | Registered: Nov 2008
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Amanda B. Reckondwythe
Dressed for Church
# 5521
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Posted
quote:
Originally posted by LeRoc:
The same happens in my line of work with regards to 'consultants'. Organizations pay them big bucks. . . .
Consultant: A person paid money to say what staff would say if you cared enough to listen.
What does a CEO decide anyway that is different from what staff would collectively decide if allowed to do so?
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"I take prayer too seriously to use it as an excuse for avoiding work and responsibility." -- The Revd Martin Luther King Jr.
Posts: 10542 | From: The Great Southwest | Registered: Feb 2004
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lilBuddha
Shipmate
# 14333
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Posted
Consulting.
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I put on my rockin' shoes in the morning
Hallellou, hallellou
Posts: 17627 | From: the round earth's imagined corners | Registered: Dec 2008
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Marvin the Martian
Interplanetary
# 4360
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Posted
quote:
Originally posted by LeRoc:
What you seem to be trying to say is:- If you contract a 'cheap' CEO, you can be sure that he won't do a good job.
- If you contract an 'expensive' CEO, then at least you'll have a chance that he might do a good job.
- Therefore, it makes sense to contract an expensive CEO.
The same principle applies most of the way down the job ladder. If you hire a cheap plumber they almost certainly won't be as good as one that charges the market rate.
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Hail Gallaxhar
Posts: 30100 | From: Adrift on a sea of surreality | Registered: Apr 2003
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Garasu
Shipmate
# 17152
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Posted
But it doesn't seem to be a free market in CEOs...
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"Could I believe in the doctrine without believing in the deity?". - Modesitt, L. E., Jr., 1943- Imager.
Posts: 889 | From: Surrey Heath (England) | Registered: Jun 2012
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LeRoc
Famous Dutch pirate
# 3216
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Posted
quote:
Marvin the Martian: The same principle applies most of the way down the job ladder. If you hire a cheap plumber they almost certainly won't be as good as one that charges the market rate.
The difference is that if a plumber does a bad job, you'll notice right away. People won't think "The tube is still leaking but he's expensive so he must be good." There is a natural mechanism that weeds out bad plumbers who charge a lot.
There doesn't seem to be such a mechanism with CEO's and consultants. They get away with crap for a long time.
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I know why God made the rhinoceros, it's because He couldn't see the rhinoceros, so He made the rhinoceros to be able to see it. (Clarice Lispector)
Posts: 9474 | From: Brazil / Africa | Registered: Aug 2002
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Doc Tor
Deepest Red
# 9748
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Posted
quote:
Originally posted by Marvin the Martian:
The same principle applies most of the way down the job ladder. If you hire a cheap plumber they almost certainly won't be as good as one that charges the market rate.
Not at all. The plumber may just be starting out, and has lowered their rates to attract business. They may genuinely look on their work as a service to the community, and not so interested in profit. They might have low overheads, therefore can charge less.
You hire a plumber by personal recommendation if at all possible: their prices are mostly a secondary consideration.
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Forward the New Republic
Posts: 9131 | From: Ultima Thule | Registered: Jul 2005
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Sioni Sais
Shipmate
# 5713
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Posted
quote:
Originally posted by Doc Tor:
quote:
Originally posted by Marvin the Martian:
The same principle applies most of the way down the job ladder. If you hire a cheap plumber they almost certainly won't be as good as one that charges the market rate.
Not at all. The plumber may just be starting out, and has lowered their rates to attract business. They may genuinely look on their work as a service to the community, and not so interested in profit. They might have low overheads, therefore can charge less.
You hire a plumber by personal recommendation if at all possible: their prices are mostly a secondary consideration.
That may be the case, but just as you're buying reputation and credibility with an expensive CEO, you're doing the same with plumbers and electricians.
[ 08. November 2013, 08:13: Message edited by: Sioni Sais ]
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"He isn't Doctor Who, he's The Doctor"
(Paul Sinha, BBC)
Posts: 24276 | From: Newport, Wales | Registered: Apr 2004
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Marvin the Martian
Interplanetary
# 4360
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Posted
quote:
Originally posted by Garasu:
But it doesn't seem to be a free market in CEOs...
In what way?
quote:
Originally posted by LeRoc:
The difference is that if a plumber does a bad job, you'll notice right away. People won't think "The tube is still leaking but he's expensive so he must be good." There is a natural mechanism that weeds out bad plumbers who charge a lot.
There doesn't seem to be such a mechanism with CEO's and consultants. They get away with crap for a long time.
I guess it depends on what "a good job" is for a CEO. There's a whole bunch of subjective stuff in there, like Providing Effective Leadership, Managing Corporate Strategy and Horizon Scanning. I guess increasing profits and market share would be measurable, but then how many of the so-called "bad CEOs" were doing exactly that right up to the moment it all went tits up?
Of course, if any of the rest of us are doing a great job but then something goes horribly wrong we tend to get a second chance. Most CEOs don't - one mistake or failure to predict what will happen in the next quarter and they're out on their asses with a bunch of lefties crowing about how terrible they are and calling for them to lose their contractual earnings and never work again.
I can't imagine how I'd feel if I made one or two bad mistakes at work, got sacked for them and then had a bunch of people calling for me to lose my pension, but as I doubt I'd be happy with the situation I can't exactly condone people doing it to anyone else.
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Hail Gallaxhar
Posts: 30100 | From: Adrift on a sea of surreality | Registered: Apr 2003
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Doc Tor
Deepest Red
# 9748
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Posted
quote:
Originally posted by Sioni Sais:
quote:
Originally posted by Doc Tor:
quote:
Originally posted by Marvin the Martian:
The same principle applies most of the way down the job ladder. If you hire a cheap plumber they almost certainly won't be as good as one that charges the market rate.
Not at all. The plumber may just be starting out, and has lowered their rates to attract business. They may genuinely look on their work as a service to the community, and not so interested in profit. They might have low overheads, therefore can charge less.
You hire a plumber by personal recommendation if at all possible: their prices are mostly a secondary consideration.
That may be the case, but just as you're buying reputation and credibility with an expensive CEO, you're doing the same with plumbers and electricians.
I'd argue that you're buying a known reputation and credibility with plumbers and electricians, unlike CEOs, where you're buying an illusion of reputation and credibility.
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Forward the New Republic
Posts: 9131 | From: Ultima Thule | Registered: Jul 2005
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chris stiles
Shipmate
# 12641
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Posted
quote:
Originally posted by Marvin the Martian:
I guess increasing profits and market share would be measurable, but then how many of the so-called "bad CEOs" were doing exactly that right up to the moment it all went tits up?
Again, this underlines the strength of the alternate explanation - in that a lot of so called success could well be down to pure luck and a reversion to mean (see again the links above). Your explanation could equally be the product of an attribution fallacy
quote:
their asses with a bunch of lefties crowing about how terrible they are and calling for them to lose their contractual earnings and never work again.
Pension obligations are also a form of contractual earnings.
[ 08. November 2013, 08:44: Message edited by: chris stiles ]
Posts: 4035 | From: Berkshire | Registered: May 2007
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Karl: Liberal Backslider
Shipmate
# 76
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Posted
The only case I can think of with hoards of screaming lefties demanding loss of pension etc was Fred Goodwin; bit of an outlier that one, really. I don't think that his cockups can be described as "one or two bad mistakes" in the same way as Chatsworth can't be described as "a little detached place in the country with a bit of land", and the vast majority of CEOs who cock up in the normal run of the mill way do not face such demands from "lefties".
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Might as well ask the bloody cat.
Posts: 17938 | From: Chesterfield | Registered: May 2001
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Frankenstein
Shipmate
# 16198
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Posted
I have read recently of a software designer who was so well paid that he could afford to outsource his work to a company in China!
Need I say more?
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It is better to travel in hope than to arrive?
Posts: 267 | From: Scotland | Registered: Jan 2011
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Frankenstein
Shipmate
# 16198
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Posted
Perhaps the comparatively poor pay the Prime Minister gets accounts for the rubbish applicants we get for the job?
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It is better to travel in hope than to arrive?
Posts: 267 | From: Scotland | Registered: Jan 2011
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quetzalcoatl
Shipmate
# 16740
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Posted
quote:
Originally posted by Frankenstein:
I have read recently of a software designer who was so well paid that he could afford to outsource his work to a company in China!
Need I say more?
The last book I wrote was proof-read by a woman in Singapore, while the publishers are in London, like me. And I had to post the Mss to her by mail, not email, so who knows how little they are paying her. Still, she earned more than me.
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I can't talk to you today; I talked to two people yesterday.
Posts: 9878 | From: UK | Registered: Oct 2011
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Dave W.
Shipmate
# 8765
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Posted
quote:
Originally posted by Marvin the Martian:
Of course, if any of the rest of us are doing a great job but then something goes horribly wrong we tend to get a second chance. Most CEOs don't - one mistake or failure to predict what will happen in the next quarter and they're out on their asses with a bunch of lefties crowing about how terrible they are and calling for them to lose their contractual earnings and never work again.
Most CEO's lose their jobs after a single quarter of bad results? What makes you think that's true?
Posts: 2059 | From: the hub of the solar system | Registered: Nov 2004
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Justinian
Shipmate
# 5357
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Posted
quote:
Originally posted by Marvin the Martian:
quote:
Originally posted by Justinian:
I'd also have thought that after literally almost crashing the global financial system at Long Term Capital Management there would be no way John Meriweather would get a second chance or even raise almost $30 million for a third. But ther you are.
It doesn't really count if he started his own company after failing at the first one.
Bullshit. Your point is about how people wouldn't trust a proven failure. There are few more proven failures than Merriweather. Yet people trusted him even afterwards to the tune of hundreds of millions of dollars. Making your case ... incredibly questionable as well as your counter-argument being a True Scotsman fallacy.
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Or after running Compaq into the ground Echard Pfeiffer would be on the boards of several companies.
On the Board isn't CEO, is it?
No. It's just paid tens or even hundreds of thousands of dollars to do ... not very much.
It's amazing to see just how much people will bend over backwards to justify the ridiculous rates paid to the top 1%
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My real name consists of just four letters, but in billions of combinations.
Eudaimonaic Laughter - my blog.
Posts: 3926 | From: The Sea Coast of Bohemia | Registered: Dec 2003
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Marvin the Martian
Interplanetary
# 4360
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Posted
quote:
Originally posted by Justinian:
Bullshit. Your point is about how people wouldn't trust a proven failure.
No it wasn't - it was about whether a company would hire a proven failure as their new CEO.
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On the Board isn't CEO, is it?
No. It's just paid tens or even hundreds of thousands of dollars to do ... not very much.
Have you ever actually worked alongside a Board member for any length of time? They do actually work, you know.
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It's amazing to see just how much people will bend over backwards to justify the ridiculous rates paid to the top 1%
That's the thing, though - are they actually ridiculous, or is it a case of having to pay the market rate for people with a rare skillset?
I'm sure there are people who think being paid over £30,000 (plus pension contributions and expenses) to push numbers around a spreadsheet all day is ridiculous, but I (and more importantly, my employer) happen to think it's what my skills are worth.
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Hail Gallaxhar
Posts: 30100 | From: Adrift on a sea of surreality | Registered: Apr 2003
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LeRoc
Famous Dutch pirate
# 3216
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Posted
Suppose for a moment that I was in charge of selecting a CEO for a big company.
quote:
Marvin the Martian: I guess it depends on what "a good job" is for a CEO. There's a whole bunch of subjective stuff in there, like Providing Effective Leadership, Managing Corporate Strategy and Horizon Scanning. I guess increasing profits and market share would be measurable, but then how many of the so-called "bad CEOs" were doing exactly that right up to the moment it all went tits up?
I would fire him, or at least not hire him again. If things went tits up, then the CEO is responsible for that. It is his job to see to it that things won't go tits up.
He may have provided Effective Leadership, Managing Corporate Strategy and Horizon Scanning, but I would only be interested in that if they provided a bigger advantage to my company than what they cost me. If things went tits up, these haven't provided anything to me at all, and I wouldn't take them into account.
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Marvin the Martian: Of course, if any of the rest of us are doing a great job but then something goes horribly wrong we tend to get a second chance.
What the examples on this thread show is that CEO's get second chances that your ordinary plumber won't get. If the plumber messes up in such a way repeatedly that it costs his contractors big money, he will lose his clientele rather quickly. If you repeatedly do something stupid in your work that costs the company a lot of money, I'll bet that you'll have a looong conversation with your boss. And your next promotion might be postponed for a while.
Yet CEO's who repeatedly do things like this are hired and hired again for even bigger salaries. The same standards don't apply to them. How many second, third, fourth... chances are you prepared to give them before you start thinking "Maybe I shouldn't be paying them this much"?
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Marvin the Martian: Most CEOs don't - one mistake or failure to predict what will happen in the next quarter and they're out on their asses with a bunch of lefties crowing about how terrible they are and calling for them to lose their contractual earnings and never work again.
What do lefties have to do with it? The only thing I'm saying is that if I was in charge of selecting a CEO, I would first leave the Big Names aside, and look into the pool of cheaper people and really test them to see if they can do a good job. That's straight-forward, decent capitalism, isn't it?
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Marvin the Martian: I can't imagine how I'd feel if I made one or two bad mistakes at work, got sacked for them and then had a bunch of people calling for me to lose my pension
Who is calling for anyone to lose his pension? I'm sure that the big-name CEO's have provided handily for that.
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I know why God made the rhinoceros, it's because He couldn't see the rhinoceros, so He made the rhinoceros to be able to see it. (Clarice Lispector)
Posts: 9474 | From: Brazil / Africa | Registered: Aug 2002
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Marvin the Martian
Interplanetary
# 4360
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Posted
quote:
Originally posted by LeRoc:
Suppose for a moment that I was in charge of selecting a CEO for a big company.
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Marvin the Martian: I guess it depends on what "a good job" is for a CEO. There's a whole bunch of subjective stuff in there, like Providing Effective Leadership, Managing Corporate Strategy and Horizon Scanning. I guess increasing profits and market share would be measurable, but then how many of the so-called "bad CEOs" were doing exactly that right up to the moment it all went tits up?
I would fire him, or at least not hire him again.
Yes, that's what I was saying. Or to be precise, I was saying that all those "obviously terrible CEOs" were doing a perfectly good job until things went wrong, and therefore weren't exactly "obviously terrible".
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If things went tits up, then the CEO is responsible for that. It is his job to see to it that things won't go tits up.
Yes, that's true. That's a lot of responsibility for one person, wouldn't you say? Especially in a multinational corporation operating in a multitude of countries, each with different legal jurisdictions and economic situations, all of which you'd be expected to know intimately in order to do the job even slightly well. And it's not like CEO is the sort of job where you get in-service training, you're expected to be able to step straight in and do it from day one.
What would you say is a fair salary for that level of responsibility and expectation?
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Yet CEO's who repeatedly do things like this are hired and hired again for even bigger salaries.
Are they, though? Sure, there are always CEOs, and the salaries keep going up, but are they always the same people?
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The same standards don't apply to them. How many second, third, fourth... chances are you prepared to give them before you start thinking "Maybe I shouldn't be paying them this much"?
How many burst pipes does it take before you start saying that all plumbers are crap and should be paid considerably less?
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The only thing I'm saying is that if I was in charge of selecting a CEO, I would first leave the Big Names aside, and look into the pool of cheaper people and really test them to see if they can do a good job. That's straight-forward, decent capitalism, isn't it?
In a way, yes. Just like saying if you were looking for a plumber you might choose a complete novice and give them a chance to see if they can do a good job on your pipes is straight-forward, decent capitalism. Of course, if your pipes are at all important to you you might prefer to go for someone with proven experience in the job...
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Hail Gallaxhar
Posts: 30100 | From: Adrift on a sea of surreality | Registered: Apr 2003
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LeRoc
Famous Dutch pirate
# 3216
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Posted
quote:
Marvin the Martian: I was saying that all those "obviously terrible CEOs" were doing a perfectly good job until things went wrong, and therefore weren't exactly "obviously terrible".
If it is someone's job to make sure that things don't go wrong, then if things do go wrong they have done a terrible job. It doesn't matter if they have done perfectly good things before that.
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Marvin the Martian: What would you say is a fair salary for that level of responsibility and expectation?
I don't know. But what I do know that I wouldn't pay an exorbitantly high salary to someone who has screwed up in the past.
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Marvin the Martian: Sure, there are always CEOs, and the salaries keep going up, but are they always the same people?
As Justinian's links showed earlier on this thread, to a large degree they are.
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Marvin the Martian: How many burst pipes does it take before you start saying that all plumbers are crap and should be paid considerably less?
I haven't said that all CEO's are crap.
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Marvin the Martian: Of course, if your pipes are at all important to you you might prefer to go for someone with proven experience in the job...
I wouldn't pay big bucks for a plumber whose 'proven experience' consists of a string of failures. Yet, with a large number of CEO's this seems to happen. I guess I'd prefer a plumber who has slightly less experience, but all of his experiences were successes.
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I know why God made the rhinoceros, it's because He couldn't see the rhinoceros, so He made the rhinoceros to be able to see it. (Clarice Lispector)
Posts: 9474 | From: Brazil / Africa | Registered: Aug 2002
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Marvin the Martian
Interplanetary
# 4360
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Posted
quote:
Originally posted by LeRoc:
quote:
Marvin the Martian: I was saying that all those "obviously terrible CEOs" were doing a perfectly good job until things went wrong, and therefore weren't exactly "obviously terrible".
If it is someone's job to make sure that things don't go wrong, then if things do go wrong they have done a terrible job. It doesn't matter if they have done perfectly good things before that.
Point is, you can't complain about high salaries being paid for failure when those salaries were agreed at a time when the person was actually a success.
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Marvin the Martian: What would you say is a fair salary for that level of responsibility and expectation?
I don't know. But what I do know that I wouldn't pay an exorbitantly high salary to someone who has screwed up in the past.
Would you apply that to all levels of work, out of interest? Or is it only at the top where one failure equals career over?
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Marvin the Martian: Sure, there are always CEOs, and the salaries keep going up, but are they always the same people?
As Justinian's links showed earlier on this thread, to a large degree they are.
Justinian's links earlier showed one person who came back from failure by starting his own company (which even you must agree gives him the right to pay himself whatever he thinks is fair), and one person who hasn't yet got another CEO job.
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Marvin the Martian: How many burst pipes does it take before you start saying that all plumbers are crap and should be paid considerably less?
I haven't said that all CEO's are crap.
Just that they shouldn't be paid as much.
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Marvin the Martian: Of course, if your pipes are at all important to you you might prefer to go for someone with proven experience in the job...
I wouldn't pay big bucks for a plumber whose 'proven experience' consists of a string of failures. Yet, with a large number of CEO's this seems to happen. I guess I'd prefer a plumber who has slightly less experience, but all of his experiences were successes.
With the exception of someone who created a new company and declared themself CEO, there hasn't been a single example yet of a company hiring a previously-failed CEO as their new CEO, much less anyone with a "string of failures" continuing to find themselves recruited to CEO jobs.
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Hail Gallaxhar
Posts: 30100 | From: Adrift on a sea of surreality | Registered: Apr 2003
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cliffdweller
Shipmate
# 13338
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Posted
quote:
Originally posted by LeRoc:
What the examples on this thread show is that CEO's get second chances that your ordinary plumber won't get. If the plumber messes up in such a way repeatedly that it costs his contractors big money, he will lose his clientele rather quickly. If you repeatedly do something stupid in your work that costs the company a lot of money, I'll bet that you'll have a looong conversation with your boss. And your next promotion might be postponed for a while.
Yet CEO's who repeatedly do things like this are hired and hired again for even bigger salaries. The same standards don't apply to them. How many second, third, fourth... chances are you prepared to give them before you start thinking "Maybe I shouldn't be paying them this much"?
Yes. In my limited experience of a family member who's one of the sharks swimming in this pond, it appears to me that the title, once obtained, becomes a credential in and of itself. Once you are "CEO of a Fortune 500 Company", even if you are "former CEO of a Fortune 500 Company" or "former CEO of a formerly Fortune 500 Company" that becomes your entire resume. You can parlay that title into top-dollar speaking gigs, cushy corporate board of directors seats, and yes, other CEO gigs. Because that IS your experience-- being CEO. That's your resume.
You are considered an expert (and not just on business-- my relative has tried to play this card on everything from what to serve for Xmas dinner to how to care for aged parents-- because since "everything of value can be bought and sold" being an "expert" at business means you're an expert at everything). And of course, you can usually cherry-pick one statistic out of your entire career: "under Mr CEO's leadership the company recorded the largest jump in profits in any quarter of the company's history" ... w/o mentioning the context (following a devastating drop that nearly bankrupt the company so there was no where to go but up, the next quarter was similarly disastrous as it turns out the gains were creative accounting...).
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"Here is the world. Beautiful and terrible things will happen. Don't be afraid." -Frederick Buechner
Posts: 11242 | From: a small canyon overlooking the city | Registered: Jan 2008
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LeRoc
Famous Dutch pirate
# 3216
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Posted
quote:
Marvin the Martian: Point is, you can't complain about high salaries being paid for failure when those salaries were agreed at a time when the person was actually a success.
True, but if a person was already a failure in another company, I wouldn't hire him for a high salary in my company.
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Marvin the Martian: Would you apply that to all levels of work, out of interest? Or is it only at the top where one failure equals career over?
Do people deserve a second chance? Yes, sometimes they do. Even CEO's.
I'd really need to be convinced though that they would be showing some kind of change compared to what they did that lead to the failure. If I had a company, would I hire a CEO who has screwed up in another company, in order to give him a second chance? I think I'd prefer someone who hasn't.
And yes, some CEO's who screwed up time after time really should take on another career. What's wrong with that?
Let's get the plumbing analogy straight here. You have a leak in your house, and you have a choice between hiring Plumber Jack and Plumber Joe.
A lot of people consider Plumber Jack to be top-notch. He's been doing this for years, and people speak very highly of him. He charges very high, so he must be good. He can cite all the important plumbing techniques without a blink. Yet, during the last week he had a major mess-up. He repaired the piping in someone's house, but a couple of days afterwards there was a major leak, causing considerable damage to the bathroom. And as a matter of fact, the same thing happened in another house last month.
Plumber Joe isn't that well-known. His rates are lower, and a lot of people would put up their noses considering hiring him. Yet, the jobs he has done have been good.
Which one would you hire? And be really honest, would 'giving someone a second chance' enter in your considerations?
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Marvin the Martian: Justinian's links earlier showed one person who came back from failure by starting his own company (which even you must agree gives him the right to pay himself whatever he thinks is fair), and one person who hasn't yet got another CEO job.
Last link in this post.
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Marvin the Martian: Just that they shouldn't be paid as much.
I'm saying that it's dumb to pay a lot to a CEO who has proven to be crap.
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Marvin the Martian: With the exception of someone who created a new company and declared themself CEO, there hasn't been a single example yet of a company hiring a previously-failed CEO as their new CEO, much less anyone with a "string of failures" continuing to find themselves recruited to CEO jobs.
See the link I gave above.
[ 08. November 2013, 15:21: Message edited by: LeRoc ]
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I know why God made the rhinoceros, it's because He couldn't see the rhinoceros, so He made the rhinoceros to be able to see it. (Clarice Lispector)
Posts: 9474 | From: Brazil / Africa | Registered: Aug 2002
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cliffdweller
Shipmate
# 13338
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Posted
Exactly. "Giving someone a 2nd chance" usually doesn't mean stepping right back into where you were before w/o losing a step. Generally, it means taking your lumps-- being willing to go back a step or two, to be supervised a bit more closely-- at least for a period of time while you earn back trust and rebuild your reputation.
Plumber Jack who has screwed up his last two jobs might find he can't get the big, high-reward corporate construction jobs for awhile. He might have to go back to doing lowly house calls for awhile while he's rebuilding his rep-- and taking a cut in pay to go with that. That's what a 2nd chance looks like.
The same ought to be true of CEO's. The expectation ought to be that after screwing up big time, you're going to go back to middle management, relearn the business from the ground up, and work your way back. The not-uncommon practice of driving a company into the ground then stepping into a very comparable position in a different company strikes me as insane.
[ 08. November 2013, 15:30: Message edited by: cliffdweller ]
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"Here is the world. Beautiful and terrible things will happen. Don't be afraid." -Frederick Buechner
Posts: 11242 | From: a small canyon overlooking the city | Registered: Jan 2008
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