Highest-paid CEOs run worst-performing companies, research finds

  • metta

    Posts: 39134

    Jul 28, 2016 5:14 AM GMT
    Highest-paid CEOs run worst-performing companies, research finds
    Research firm finds businesses led by lower-paid CEOs earn greater shareholder return

    http://www.independent.co.uk/news/world/americas/highest-paid-ceos-worst-performing-companies-research-a7156486.html
  • roadbikeRob

    Posts: 14354

    Jul 28, 2016 12:45 PM GMT
    This is why many of these big Fortune 500 companies are going down the drain. The CEOs and the wealthiest shareholders are milking them for all they are worth. Once the money wells run dry all these wealthy shareholders will dump the companies stocks on the open market, take their earnings and walk away.
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    Jul 28, 2016 12:47 PM GMT
    Not that I'm a big fan of overpaid CEOs, but some of the commenters make a case that simple figures may not alone tell the whole story. As one wrote:

    "Maybe the CEOs paid the most lead very large, long standing complex businesses producing essential commodity products with razor thin margins. Their skill being to manage such large companies to make sure vital product are produced at prices people will pay while still returning some profit. Maybe pay has to be higher in unfashionable businesses to make sure they are well run.

    Not every CEO can be blessed with running Facebook or Apple. Some have to run Exxon, Walmart, Unilever companies that produce everyday things we need to function."


    Although I'm not sure bringing Apple back from the dead was a job many would call a "blessing". Of course Steve Jobs did it largely with his own brilliant innovation talent, not management skills. And yet I didn't understand him to be outrageously paid, but then of course he presumably had a large stake in the company value. Yet appeared to live relatively simply, not ostentatiously. So that I'm not sure Apple is a good example for this purpose.
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    Jul 28, 2016 1:33 PM GMT
    Art_Deco saidNot that I'm a big fan of overpaid CEOs, but some of the commenters make a case that simple figures may not alone tell the whole story. As one wrote:

    "Maybe the CEOs paid the most lead very large, long standing complex businesses producing essential commodity products with razor thin margins. Their skill being to manage such large companies to make sure vital product are produced at prices people will pay while still returning some profit. Maybe pay has to be higher in unfashionable businesses to make sure they are well run.

    Not every CEO can be blessed with running Facebook or Apple. Some have to run Exxon, Walmart, Unilever companies that produce everyday things we need to function."


    Although I'm not sure bringing Apple back from the dead was a job many would call a "blessing". Of course Steve Jobs did it largely with his own brilliant innovation talent, not management skills. And yet I didn't understand him to be outrageously paid, but then of course he presumably had a large stake in the company value. Yet appeared to live relatively simply, not ostentatiously. So that I'm not sure Apple is a good example for this purpose.


    I disagree. Steve pulled Apple out of its death spiral through incredible management. All the innovation and talent in the world won't save a company that can't execute on it's strategy. He pulled together an incredible executive team that solved a lot of Apple's problems like development delays, inventory/distribution management and manufacturing. That is all management. It isn't as sexy to talk about as iMacs, iPhones, etc.. but without those things working Apple would have gone out of business years ago.
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    Jul 28, 2016 1:56 PM GMT
    Cliche_Guevara said
    I disagree. Steve pulled Apple out of its death spiral through incredible management. All the innovation and talent in the world won't save a company that can't execute on it's strategy. He pulled together an incredible executive team that solved a lot of Apple's problems like development delays, inventory/distribution management and manufacturing. That is all management. It isn't as sexy to talk about as iMacs, iPhones, etc.. but without those things working Apple would have gone out of business years ago.

    But in a sense you're confirming what I was suggesting. Putting together a management TEAM isn't necessarily being a great manager yourself. That's called delegation. And having a visionary at the top works for a technology company like Apple.

    These other CEOs in question aren't necessarily visionaries,but dyed-in-the-wool managerial types, and the companies aren't all Apples. As the reply I quoted suggests, and others like it, additional factors can be at play that confuse the direct correlation between CEO compensation and stockholder return.
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    Jul 28, 2016 1:59 PM GMT
    If a highly compensated CEO has continually failed to meet his/her performance metrics for a period of time, and he/she continues to receive millions of dollars in salary, benefits, and performance bonus despite his/her shortcomings, then there's only the Board of Directors to blame.
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    Jul 29, 2016 12:12 AM GMT
    Art_Deco said
    Cliche_Guevara said
    I disagree. Steve pulled Apple out of its death spiral through incredible management. All the innovation and talent in the world won't save a company that can't execute on it's strategy. He pulled together an incredible executive team that solved a lot of Apple's problems like development delays, inventory/distribution management and manufacturing. That is all management. It isn't as sexy to talk about as iMacs, iPhones, etc.. but without those things working Apple would have gone out of business years ago.

    But in a sense you're confirming what I was suggesting. Putting together a management TEAM isn't necessarily being a great manager yourself. That's called delegation. And having a visionary at the top works for a technology company like Apple.

    These other CEOs in question aren't necessarily visionaries,but dyed-in-the-wool managerial types, and the companies aren't all Apples. As the reply I quoted suggests, and others like it, additional factors can be at play that confuse the direct correlation between CEO compensation and stockholder return.


    What do you think he was doing with the executive team? He wasn't just hanging out with them he was managing them. Building the team is management, delegation is management, getting the team to work together is management. That is what any CEO does, they don't get lost in the weeds managing every person. Steve certainly thought he managed and talked about it.

    Steve JobsMy model of management is the Beatles. The reason I say that is because each of the key people in the Beatles kept the others from going off in the directions of their bad tendencies. They sort of kept each other in check. And then when they split up, they never did anything as good. It was the chemistry of a small group of people, and that chemistry was greater than the sum of the parts. And so John kept Paul from being a teenybopper and Paul kept John from drifting out into the cosmos, and it was magic. And George, in the end, I think provided a tremendous amount of soul to the group.


    People tend to dwell on Steve the product guy but few realize that in the end his greatest product wasn't the Mac, iPod, iPad or iPhone. His great product was the company and how it works. That is management.
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    Jul 29, 2016 1:32 AM GMT
    Art_Deco said
    Cliche_Guevara said
    I disagree. Steve pulled Apple out of its death spiral through incredible management. All the innovation and talent in the world won't save a company that can't execute on it's strategy. He pulled together an incredible executive team that solved a lot of Apple's problems like development delays, inventory/distribution management and manufacturing. That is all management. It isn't as sexy to talk about as iMacs, iPhones, etc.. but without those things working Apple would have gone out of business years ago.

    But in a sense you're confirming what I was suggesting. Putting together a management TEAM isn't necessarily being a great manager yourself. That's called delegation. And having a visionary at the top works for a technology company like Apple.

    These other CEOs in question aren't necessarily visionaries,but dyed-in-the-wool managerial types, and the companies aren't all Apples. As the reply I quoted suggests, and others like it, additional factors can be at play that confuse the direct correlation between CEO compensation and stockholder return.


    He was so cheap, he didn't want to even pay child support.
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    Jul 29, 2016 1:41 AM GMT
    Aunty_Jack said
    Art_Deco said
    Cliche_Guevara said
    I disagree. Steve pulled Apple out of its death spiral through incredible management. All the innovation and talent in the world won't save a company that can't execute on it's strategy. He pulled together an incredible executive team that solved a lot of Apple's problems like development delays, inventory/distribution management and manufacturing. That is all management. It isn't as sexy to talk about as iMacs, iPhones, etc.. but without those things working Apple would have gone out of business years ago.

    But in a sense you're confirming what I was suggesting. Putting together a management TEAM isn't necessarily being a great manager yourself. That's called delegation. And having a visionary at the top works for a technology company like Apple.

    These other CEOs in question aren't necessarily visionaries,but dyed-in-the-wool managerial types, and the companies aren't all Apples. As the reply I quoted suggests, and others like it, additional factors can be at play that confuse the direct correlation between CEO compensation and stockholder return.


    He was so cheap, he didn't want to even pay child support.


    Okay. I fail to see what that has to do with the conversation but you are correct he did try to get out of paying child support.