undefined | Better HN

0 pointslmm3y ago0 comments

> There's no way his/her view was "shrug, organizations tend to bloat" while racking in extremely competitive + good pay as somebody whose main job is to drive a company towards maximum growth/profitability.

> There's no way the CEO was able to convince a majority of people responsible for paying him (the board), to pay award him $30m/yr in stock options, while he was also "bad at his job enough" to let the organization bloat without as much as an afterthought to it.

Why not? Why would those board members have ever called him out? The more they're paying him, the more they can pay themselves too.

0 comments

ShredKazoo3y ago

Yep, my understanding is that cronyism between the executive and the board is a huge issue driving CEO pay. (Boards can also just be out to lunch.)

One way to fix this is to make corporate takeovers easier. This sort of cronyism ends up being a con on the shareholders (and the con is especially easy to pull off if the "shareholders" are passive index funds that don't pay much attention to their holdings).

By removing legal protection on corporate raiding, the board+CEO have to worry about activist investors who ask inconvenient questions like "why are you paying yourself $30M a year instead of giving shareholders a dividend?"

https://www.overcomingbias.com/2010/01/enable-raiders.html

j / k navigate · click thread line to collapse