http://crookedtimber.org/2004/12/11/pay-without-performance/ Out of the crooked timber of humanity, no straight thing was ever made Mon, 13 Feb 2012 07:27:13 +0000 hourly 1 http://wordpress.org/?v=3.3.1 http://crookedtimber.org/2004/12/11/pay-without-performance/comment-page-1/#comment-53921 gordon Sun, 12 Dec 2004 22:15:21 +0000 http://crookedtimber.org/wp/?p=2635#comment-53921 Russkie thinks that executive compensation is "sky-high" at the moment partly because "executive competence is rare". I suspect that there is not such a shortage of talent as he thinks. A considerable literature on employee involvement in management and workplace democracy indicates that there is plenty of talent, but few ways that it can be expressed. Russkie thinks that executive compensation is “sky-high” at the moment partly because “executive competence is rare”. I suspect that there is not such a shortage of talent as he thinks. A considerable literature on employee involvement in management and workplace democracy indicates that there is plenty of talent, but few ways that it can be expressed.

]]> http://crookedtimber.org/2004/12/11/pay-without-performance/comment-page-1/#comment-53920 burritoboy Sun, 12 Dec 2004 18:26:47 +0000 http://crookedtimber.org/wp/?p=2635#comment-53920 Rakesh Khurana's book on the same subject is also very good. Rakesh Khurana’s book on the same subject is also very good.

]]> http://crookedtimber.org/2004/12/11/pay-without-performance/comment-page-1/#comment-53919 Russkie Sun, 12 Dec 2004 10:38:50 +0000 http://crookedtimber.org/wp/?p=2635#comment-53919 As someone who has been screwed more than once by know-nothing CEOs and venture capitalists, I certainly agree that the way these people get compensated has little connection with their competence or ability to provide value to shareholders. Thing is that it's a lot easier to complain about it than it is to suggest a practical solution. Executive compensation is sky-high currently because of 2 factors that I can see: 1) executive competence is rare and is one of the 2 most basic factors that can make an enterprise successful in the globalized competitive environment (the other one is luck) 2) there is a distinct lack of transparency that surrounds what a CEO actually contributes. It could be said that engineers had these same 2 things going for them during the bubble period. As someone who has been screwed more than once by know-nothing CEOs and venture capitalists, I certainly agree that the way these people get compensated has little connection with their competence or ability to provide value to shareholders. Thing is that it’s a lot easier to complain about it than it is to suggest a practical solution. Executive compensation is sky-high currently because of 2 factors that I can see: 1) executive competence is rare and is one of the 2 most basic factors that can make an enterprise successful in the globalized competitive environment (the other one is luck) 2) there is a distinct lack of transparency that surrounds what a CEO actually contributes. It could be said that engineers had these same 2 things going for them during the bubble period.

]]> http://crookedtimber.org/2004/12/11/pay-without-performance/comment-page-1/#comment-53918 abb1 Sun, 12 Dec 2004 10:21:09 +0000 http://crookedtimber.org/wp/?p=2635#comment-53918 <i>Ripping off shareholders</i> This is not just about 'ripping off shareholders', this is far beyond 'ripping off shareholders'. As John said in his post, this has <i>profound implications</i>. But I'm not sure this can be accurately called 'capitalism' anymore, the expression is 'crony capitalism'. Ripping off shareholders This is not just about ‘ripping off shareholders’, this is far beyond ‘ripping off shareholders’. As John said in his post, this has profound implications. But I’m not sure this can be accurately called ‘capitalism’ anymore, the expression is ‘crony capitalism’.

]]> http://crookedtimber.org/2004/12/11/pay-without-performance/comment-page-1/#comment-53917 joejoejoe Sun, 12 Dec 2004 08:06:57 +0000 http://crookedtimber.org/wp/?p=2635#comment-53917 I thank you for posting that Adam Smith quote and I curse the Invisible Hand for posting it another 6 times. Damn you Invisible Hand! Damn you all to hell! I thank you for posting that Adam Smith quote and I curse the Invisible Hand for posting it another 6 times. Damn you Invisible Hand! Damn you all to hell!

]]> http://crookedtimber.org/2004/12/11/pay-without-performance/comment-page-1/#comment-53930 gordon Sun, 12 Dec 2004 04:56:30 +0000 http://crookedtimber.org/wp/?p=2635#comment-53930 Ripping off shareholders also means ripping off institutional investors, which handle the savings (eg. super) of working people. So it's not only capital which is being ripped off. And as far as class war is concerned, isn't it a wonderful irony of late 20th century politics how just as "left" parties were ostentatiously deleting Marxism and class war from their platforms, "right" parties were embracing it!? Ripping off shareholders also means ripping off institutional investors, which handle the savings (eg. super) of working people. So it’s not only capital which is being ripped off. And as far as class war is concerned, isn’t it a wonderful irony of late 20th century politics how just as “left” parties were ostentatiously deleting Marxism and class war from their platforms, “right” parties were embracing it!?

]]> http://crookedtimber.org/2004/12/11/pay-without-performance/comment-page-1/#comment-53929 Walt Pohl Sun, 12 Dec 2004 02:04:40 +0000 http://crookedtimber.org/wp/?p=2635#comment-53929 I believe we have a new record. I believe we have a new record.

]]> http://crookedtimber.org/2004/12/11/pay-without-performance/comment-page-1/#comment-53928 Steve Jandreau Sun, 12 Dec 2004 02:02:06 +0000 http://crookedtimber.org/wp/?p=2635#comment-53928 After reading this, I was reminded of what a great liberal economist wrote about the dangers of separating management from ownership: The directors of such companies, however, being the managers rather of other people's money than of their own, it cannot well be expected that they should watch over it with the same anxious vigilance with which the partners in a private copartnery frequently watch over their own….Negligence and profusion, therefore, must always prevail, more or less, in the management of the affairs of such a company. The Wealth of Nations, Book V, Part 3, Article 1 After reading this, I was reminded of what a great liberal economist wrote about the dangers of separating management from ownership: The directors of such companies, however, being the managers rather of other people’s money than of their own, it cannot well be expected that they should watch over it with the same anxious vigilance with which the partners in a private copartnery frequently watch over their own….Negligence and profusion, therefore, must always prevail, more or less, in the management of the affairs of such a company. The Wealth of Nations, Book V, Part 3, Article 1

]]> http://crookedtimber.org/2004/12/11/pay-without-performance/comment-page-1/#comment-53927 Steve Jandreau Sun, 12 Dec 2004 02:01:27 +0000 http://crookedtimber.org/wp/?p=2635#comment-53927 After reading this, I was reminded of what a great liberal economist wrote about the dangers of separating management from ownership: The directors of such companies, however, being the managers rather of other people's money than of their own, it cannot well be expected that they should watch over it with the same anxious vigilance with which the partners in a private copartnery frequently watch over their own….Negligence and profusion, therefore, must always prevail, more or less, in the management of the affairs of such a company. The Wealth of Nations, Book V, Part 3, Article 1 After reading this, I was reminded of what a great liberal economist wrote about the dangers of separating management from ownership: The directors of such companies, however, being the managers rather of other people’s money than of their own, it cannot well be expected that they should watch over it with the same anxious vigilance with which the partners in a private copartnery frequently watch over their own….Negligence and profusion, therefore, must always prevail, more or less, in the management of the affairs of such a company. The Wealth of Nations, Book V, Part 3, Article 1

]]> http://crookedtimber.org/2004/12/11/pay-without-performance/comment-page-1/#comment-53926 Steve Jandreau Sun, 12 Dec 2004 02:00:28 +0000 http://crookedtimber.org/wp/?p=2635#comment-53926 After reading this, I was reminded of what a great liberal economist wrote about the dangers of separating management from ownership: The directors of such companies, however, being the managers rather of other people's money than of their own, it cannot well be expected that they should watch over it with the same anxious vigilance with which the partners in a private copartnery frequently watch over their own….Negligence and profusion, therefore, must always prevail, more or less, in the management of the affairs of such a company. The Wealth of Nations, Book V, Part 3, Article 1 After reading this, I was reminded of what a great liberal economist wrote about the dangers of separating management from ownership: The directors of such companies, however, being the managers rather of other people’s money than of their own, it cannot well be expected that they should watch over it with the same anxious vigilance with which the partners in a private copartnery frequently watch over their own….Negligence and profusion, therefore, must always prevail, more or less, in the management of the affairs of such a company. The Wealth of Nations, Book V, Part 3, Article 1

]]> http://crookedtimber.org/2004/12/11/pay-without-performance/comment-page-1/#comment-53925 Steve Jandreau Sun, 12 Dec 2004 01:59:26 +0000 http://crookedtimber.org/wp/?p=2635#comment-53925 After reading this, I was reminded of what a great liberal economist wrote about the dangers of separating management from ownership: The directors of such companies, however, being the managers rather of other people's money than of their own, it cannot well be expected that they should watch over it with the same anxious vigilance with which the partners in a private copartnery frequently watch over their own….Negligence and profusion, therefore, must always prevail, more or less, in the management of the affairs of such a company. The Wealth of Nations, Book V, Part 3, Article 1 After reading this, I was reminded of what a great liberal economist wrote about the dangers of separating management from ownership: The directors of such companies, however, being the managers rather of other people’s money than of their own, it cannot well be expected that they should watch over it with the same anxious vigilance with which the partners in a private copartnery frequently watch over their own….Negligence and profusion, therefore, must always prevail, more or less, in the management of the affairs of such a company. The Wealth of Nations, Book V, Part 3, Article 1

]]> http://crookedtimber.org/2004/12/11/pay-without-performance/comment-page-1/#comment-53924 Steve Jandreau Sun, 12 Dec 2004 01:58:12 +0000 http://crookedtimber.org/wp/?p=2635#comment-53924 After reading this, I was reminded of what a great liberal economist wrote about the dangers of separating management from ownership: The directors of such companies, however, being the managers rather of other people's money than of their own, it cannot well be expected that they should watch over it with the same anxious vigilance with which the partners in a private copartnery frequently watch over their own….Negligence and profusion, therefore, must always prevail, more or less, in the management of the affairs of such a company. The Wealth of Nations, Book V, Part 3, Article 1 After reading this, I was reminded of what a great liberal economist wrote about the dangers of separating management from ownership: The directors of such companies, however, being the managers rather of other people’s money than of their own, it cannot well be expected that they should watch over it with the same anxious vigilance with which the partners in a private copartnery frequently watch over their own….Negligence and profusion, therefore, must always prevail, more or less, in the management of the affairs of such a company. The Wealth of Nations, Book V, Part 3, Article 1

]]> http://crookedtimber.org/2004/12/11/pay-without-performance/comment-page-1/#comment-53923 Steve Jandreau Sun, 12 Dec 2004 01:57:25 +0000 http://crookedtimber.org/wp/?p=2635#comment-53923 After reading this, I was reminded of what a great liberal economist wrote about the dangers of separating management from ownership: The directors of such companies, however, being the managers rather of other people's money than of their own, it cannot well be expected that they should watch over it with the same anxious vigilance with which the partners in a private copartnery frequently watch over their own….Negligence and profusion, therefore, must always prevail, more or less, in the management of the affairs of such a company. The Wealth of Nations, Book V, Part 3, Article 1 After reading this, I was reminded of what a great liberal economist wrote about the dangers of separating management from ownership: The directors of such companies, however, being the managers rather of other people’s money than of their own, it cannot well be expected that they should watch over it with the same anxious vigilance with which the partners in a private copartnery frequently watch over their own….Negligence and profusion, therefore, must always prevail, more or less, in the management of the affairs of such a company. The Wealth of Nations, Book V, Part 3, Article 1

]]> http://crookedtimber.org/2004/12/11/pay-without-performance/comment-page-1/#comment-53922 Steve Jandreau Sun, 12 Dec 2004 01:56:46 +0000 http://crookedtimber.org/wp/?p=2635#comment-53922 After reading this, I was reminded of what a great liberal economist wrote about the dangers of separating management from ownership: The directors of such companies, however, being the managers rather of other people's money than of their own, it cannot well be expected that they should watch over it with the same anxious vigilance with which the partners in a private copartnery frequently watch over their own….Negligence and profusion, therefore, must always prevail, more or less, in the management of the affairs of such a company. The Wealth of Nations, Book V, Part 3, Article 1 After reading this, I was reminded of what a great liberal economist wrote about the dangers of separating management from ownership: The directors of such companies, however, being the managers rather of other people’s money than of their own, it cannot well be expected that they should watch over it with the same anxious vigilance with which the partners in a private copartnery frequently watch over their own….Negligence and profusion, therefore, must always prevail, more or less, in the management of the affairs of such a company. The Wealth of Nations, Book V, Part 3, Article 1

]]> http://crookedtimber.org/2004/12/11/pay-without-performance/comment-page-1/#comment-53916 Walt Pohl Sat, 11 Dec 2004 17:59:39 +0000 http://crookedtimber.org/wp/?p=2635#comment-53916 I should have known if I said "capitalist" someone would be picky. How about "captains of industry"? I should have known if I said “capitalist” someone would be picky. How about “captains of industry”?

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