The myth of the comptetent high paid executive

maninasia wrote: »

No comeback eh..because the super CEO is a myth, organisations are exactly that, organisations of professional workers and many many people have important parts to play in success or failure, often much more than the actual CEO!

nobody, not even the person you quoted said otherwise

PeakOutput wrote: »

nobody, not even the person you quoted said otherwise

Don't understand your meaning, can you comment on my comments? Is the CEO worth more than the guy who designed the latest hot product, the team that worked together for two years day and night to get it to market, the patent lawyer who found a loophole to get the product to market,the R&D guys who allowed the company to breakthrough into a new area, the QC manager who runs such a type ship there has never been even one recall?

maninasia wrote: »

Right so the CEO is responsible for increasing the income, not the sales manager, R&D head, financial guy, production manager, marketing guru, purchasing manager...all hail the super CEO who does it by himself.

you responded with this to this post

A corporations only loyalty is to its shareholders.

Not to employees or community or anyone else.

If the CEO can increase the share price even by a small percentage and deliver tens or even hundreds of millions in equity, then they deserve the 500,000 or so salary
With the big money comes pressure. Much like a football manager, if you don't deliver you're sacked and reputation ruined as the media and everyone knows you failed to deliver

Not everyone can handle that.
And some people are quite content on 25k and photocopying files in an office. Good for them

nowhere in that post or anywhere else in this thread has anyone tried to say that a ceo is the only important position in a company, not one, but it suits you to put words into peoples mouths so that you can make your points sound relevant

maninasia wrote: »

I'm responding to all your posts in this thread in between laughing at them.

we are both having a great laugh so

Look lads, this is just turning into a slagging match with so much antipathy between the rival camps that nobody seems to be listening to , or addressing each others' arguments.

@ Peak Output, PowWow, Feelingstressed et al., there is no point in me trying to get my point across anymore. I have done my best. The only thing I can say at this point is perhaps ye could read the interview Jack Welch gave to the New York Times in 2009. He was the CEO of General Electric for 20 years and Time Magazine named him Manager of the century. He was the original drum-banger for the arguments ye have been putting across and the instigator of the belief that a CEO who increased shareholder value and maximised quarterly profits was a good CEO.

In the interview, he admits that he was utterly wrong, and that it was a "Dumbass" idea. He basically accepts that increased shareholder value and profits are not the object of a well-run company, they are the result of a well run company. The pay structures ye are advocating reward people for running a company badly, but I can't get this point across so maybe reading the article would get my point across better. It's about causation and not putting the cart before the horse.

Needless to say he was not advocating this obvious commonsense while it would have affected his personal income.;)

Isn't the CEO elected by the board of directors, which in turn is elected by the shareholders?

Its really up to the shareholders/investors to vote on how they want the company managed, its their money they're investing.

If they aren't happy with it they can vote at the AGM and/or sell their shares.

How they want their money spent is up to them - its a free world, but I'm pretty sure if the executive group are not delivering the returns they promised to the investors then they wont last too long- but again its really up to the shareholders.

Rabble Rabble wrote: »

?

If you say CEO's are paid well and are worth their salary, then how can you make the claim that incompetence is not related to salary. Basically you are saying that competence is related to salary( we pay more becausewe must hire the best) but incompetence isnt.

I never said that, although I think it is fair to say that the vast majority of people who rise up through the ranks and eventually end up being ceos end up there as a result of showing a large amount of competence in their industry, what part of this is so difficult to understand?

you are on the board of a successful company, very successful.

your company needs a new ceo and you want to be able get someone who has a track record of being amazing, say either as a ceo or just a great business track record

you will not create much interest in that position, from the type of people you are looking for (people with a proven track record for running large logistics companies for example) unless the package is attractive to those people you won't get any applications / replies to your letters

part of that package is the salary

if the package is right then people will be interested in the position and you can then go about picking the correct candidate. thats all the package does, it makes people feel that working for that company is worth THEIR TIME after that its the companies / boards / shareholders job to make sure they are worth THEIR MONEY.

If you pick an incompetent ceo thats your problem. sometimes you will pick someone with a great track record and they just wont be able to get to grips with your company and they will be a disaster. there are literally hundreds if not thousands of variables that could go wrong or right with any particular ceo you choose.

there is also the possibility of course that you will find someone who has no experience who would be perfect for the job and he wont need as attractive a package as the already experienced ones but thats because they have not yet proved themselves in the position and are more of a risk

bringing companies who needed bailouts etc into the argument is ridicolous because they are a tiny minority of companies. I happen to think that they should be let fail unless the overall economic cost of bailing them out is less then letting them fail and I happen to think that if they are bailed out by the government they should have to follow specific regulations until they have paid all the bailout money back and are a viable business again but all that is irrelevant to the argument because they are such a tiny proportion of companies

PK2008 wrote: »

Isn't the CEO elected by the board of directors, which in turn is elected by the shareholders?

Its really up to the shareholders/investors to vote on how they want the company managed, its their money they're investing.

If they aren't happy with it they can vote at the AGM and/or sell their shares.

How they want their money spent is up to them - its a free world, but I'm pretty sure if the executive group are not delivering the returns they promised to the investors then they wont last too long- but again its really up to the shareholders.

Read the thread, that's not how it works in the real world. Besides, we are dealing with the fallacy of high pay of CEO being linked to great performance of the company.
Finally not all shareholders targets are the same, many trade on a minute/hourly/monthly basis..short-term trading that is good for immediate profits (they can get their costs reduced or R&D budget slashed with a concommitant quick increase in earnings per share) but can be very bad for company operations long-term.
Fundamentally, if CEO pay is linked to long-term sustainability and profitability that should coincide with both the interests of long-term shareholders and staff of the company alike. What is missing in these debates is that companies are really a collection of people, it's the people that make the company! Now if you get rid of the wrong people or destroy the organisation's integrity or attraction to the right people...well you have severely damaged/destroyed that company, no matter what it says on next month's balance sheet..which doesn't show the whole picture.

There's a great line from the founder of Dunkin' Donuts. He said, "If you want to run the most successful Doughnut franchise in the world, don't go to Harvard and learn how to run a franchise business, learn how to make a doughnut."

This is what makes Steve Jobs, Bill Gates, and Warren Buffet different from the "career" CEOs. They know their products backwards and don't get involved in anything that they don't understand fundamentally from first principles. Also, they put their money where their mouth is; if the company fails they lose, they don't walk away with a huge personal profit at the shareholders' expense because they are the shareholders.
There's no bull****ting these guys, and they don't rely on the Andersen Consulting/Goldman Sachs old school tie network to massage their egos and justify their wages.

As Buffet said, "It's not until the tide goes out, that you can see who was swimming without any trunks."

Rabble Rabble wrote: »

Fine, Walsh is worth his money. But thats a competitive industry, not too big to fail. Now back to most companies.

I don't agree. If Walsh was any good at running an Airline he'd be running one where he had the capacity to make a lot of money if the Airline was successful or lose a lot of money if it wasn't. This is why I have a grudging respect (although I can't stand the fcuker) for MOL.

The ultimate destiny of Aer Lingus or British Airways is immaterial to Walsh. He is in that safe comfort zone of either being enriched or being hugely enriched. There is no downside for him, only for the shareholders.
He is a typical overpaid, spoilt CEO for whom lack of performance has no personal downside. IMO.

Chocolate

Sorry AskMyChocolate but there's more

A bank worker got the sack after she criticised her boss's £4,000-an-hour salary on Facebook.
Stephanie Bon was working as a £7-an-hour HR assistant for Lloyds Banking Group when she heard about her new chief executive António Horta-Osório's mammoth salary.
Miss Bon went on Facebook and posted 'LBG's new CEO gets £4,000 an hour. I get £7. That's fair.'
But after her bosses heard about the comment she was marched from the offices and fired.

Great job Mr António Horta-Osório. Enjoy your wealth, oh and the £900,000-a-year in pension contributions for governing the bank the taxpayers had to bailout from oblivion because it couldn't save itself.

In other news, BP are stating that it had actually had its "best year in safety performance" and was rewarding its executives with bonuses. This after the massive disaster last year. But after getting slammed big time by [some] media the company announced that the safety bonuses would instead go to families of the workers who died in the rig explosion.

How the Richest "1 Percent" Keep Rewarding Themselves for Epic Failure