"The paper also found that the longer CEOs were at the helm, the more pronounced was their firms’ poor performance. Cooper says this is because those CEOs are able to appoint more allies to their boards, and those board members are likely to go along with the bosses’ bad decisions. “For the high-pay CEOs, with high overconfidence and high tenure, the effects are just crazy,” he says. They return 22% worse in shareholder value over three years as compared to their peers."

Sounds like those companies are making money.   Shareholders are generally happy when they get money.   

I'm a shareholder of McDonald's.   Who's making money for me?
1.  CEO with questionable decisions
2.  Burgerflipper making minimum wage 20 hours a week

******* SOAK EM, THEN DRAFT EM.

CAPITALIST PIGS

Posted by moy23 on 10/24/2014 10:46:00 PM (view original):

Posted by bad_luck on 10/24/2014 4:49:00 PM (view original):
"The paper also found that the longer CEOs were at the helm, the more pronounced was their firms’ poor performance. Cooper says this is because those CEOs are able to appoint more allies to their boards, and those board members are likely to go along with the bosses’ bad decisions. “For the high-pay CEOs, with high overconfidence and high tenure, the effects are just crazy,” he says. They return 22% worse in shareholder value over three years as compared to their peers."

You sound jealous, maybe envious. Maybe we should just not have ceos and companies will be just fine.


Seriously though you could be a great CEO one day and make millions but you have to work for it. That's whats great about america.

I'm not jealous and I'm not suggesting that companies don't need CEOs. I'm saying that the most valuable people arent always the ones making the most money.

Posted by MikeT23 on 10/25/2014 7:15:00 AM (view original):
I'm a shareholder of McDonald's.   Who's making money for me?
1.  CEO with questionable decisions
2.  Burgerflipper making minimum wage 20 hours a week

The CEO making questionable decisions is probably costing you money.

Posted by moy23 on 10/25/2014 9:00:00 AM (view original):

Posted by MikeT23 on 10/25/2014 7:14:00 AM (view original):
Sounds like those companies are making money.   Shareholders are generally happy when they get money.   

Yep. So are any of those top paid, worse performing ceos not pulling a profit for their shareholders? There are lots of different ways to measure 'performance' but really, in the end, all that matters is profitability.

The highest paid CEOs were 22% worse than their peers in terms of shareholder value.

Posted by moy23 on 10/25/2014 1:32:00 PM (view original):

Posted by bad_luck on 10/25/2014 12:30:00 PM (view original):

Posted by moy23 on 10/25/2014 9:00:00 AM (view original):

Posted by MikeT23 on 10/25/2014 7:14:00 AM (view original):
Sounds like those companies are making money.   Shareholders are generally happy when they get money.   

Yep. So are any of those top paid, worse performing ceos not pulling a profit for their shareholders? There are lots of different ways to measure 'performance' but really, in the end, all that matters is profitability.

The highest paid CEOs were 22% worse than their peers in terms of shareholder value.

What industries were these 'peers' in? Different industries have different risks, different upsides and downsides. Banking is a mature industry and is more predictable whereas tech or pharma have higher upside and downside depending on what their next innovative idea or drug may be. Its the same reason I don't invest in all large cap stocks.... While more stable the return may be lower... Whereas small cap and growth companies may have more upside but are also more likely to go bankrupt.

And if they are in the same industry.... Jamie Dimon manages over a $1 trillion in deposits and provides far more actual profit in 1 quarter that Kevin Kabat does at Fifth Third in 2 years. Is that taken into consideration?

I would take that study with a grain of salt.

Feel free to read the study. It's linked in the Forbes article.

Posted by moy23 on 10/25/2014 1:50:00 PM (view original):

Posted by bad_luck on 10/25/2014 12:27:00 PM (view original):

Posted by moy23 on 10/24/2014 10:46:00 PM (view original):

Posted by bad_luck on 10/24/2014 4:49:00 PM (view original):
"The paper also found that the longer CEOs were at the helm, the more pronounced was their firms’ poor performance. Cooper says this is because those CEOs are able to appoint more allies to their boards, and those board members are likely to go along with the bosses’ bad decisions. “For the high-pay CEOs, with high overconfidence and high tenure, the effects are just crazy,” he says. They return 22% worse in shareholder value over three years as compared to their peers."

You sound jealous, maybe envious. Maybe we should just not have ceos and companies will be just fine.


Seriously though you could be a great CEO one day and make millions but you have to work for it. That's whats great about america.

I'm not jealous and I'm not suggesting that companies don't need CEOs. I'm saying that the most valuable people arent always the ones making the most money.

I agree.... But the highest paid are the CEO and if a more valuable employee (or an employee that feels undervalued) wants more money they can become a CEO themselves. Thats how hierarchies work. The best CEOs surround themselves with brilliant people who provide great value, but don't make as much $. Bottom line though is in reality CEOs that don't make a profit or actually 'underperform' get the boot. Ask BoA's Ken Lewis or Citi's Vikram Pandit.

Most CEOs will tell you their most valuable employees are in the trenches dealing with the customer everyday. That doesn't mean a cashier or a burger flipper can run a multibillion dollar business though. Not many people can.

Not arguing that they could. Before we got off on this tangent, my point was that extreme income inequality is bad for the economy overall.

My point is not that some inequality isn't always going to exist (it should) and it isn't that some people aren't smarter and harder working than others.