<story><title>CEOs are hugely expensive – why not automate them?</title><url>https://www.newstatesman.com/business/companies/2021/04/ceos-are-hugely-expensive-why-not-automate-them</url></story><parent_chain><item><author>harperlee</author><text>They should then be compensated with a leveraged long-term derivative product that pays based on the stock difference between their company and the industry, 5 to 10 years apart.&lt;p&gt;&amp;quot;You want to be insanely rich? Here&amp;#x27;s a huge company that&amp;#x27;s not yours as a resource, now make it so it is the best one in 10 years!&amp;quot;</text></item><item><author>ARandomerDude</author><text>CEOs aren&amp;#x27;t paid for the day-to-day value they provide to the company.  They&amp;#x27;re paid for the long-term, strategic value the owners think they might provide the company &lt;i&gt;in comparison to other candidates.&lt;/i&gt; So if you think CEO Candidate X will make you a 3x return on your investment, but CEO Candidate Y will make you a 5x return, it&amp;#x27;s almost certainly worth it to pay him&amp;#x2F;her the extra $200K to get you there, if that&amp;#x27;s the market demand.  You&amp;#x27;re paying for experience, contact network, etc. in a job like that much more than you are how many widgets they can produce on an assembly line.&lt;p&gt;So it seems that the idea that a CEO could be automated misses the point of what CEOs do and how they get hired.</text></item></parent_chain><comment><author>hervature</author><text>I find it funny that people throw out decades of history. Options contracts, as you propose, introduce the incentive for extreme risk taking because doing &amp;quot;normal boring&amp;quot; things literally doesn&amp;#x27;t pay. It&amp;#x27;s one of the main arguments for  stock compensation because if the company does poorly, the CEO directly feels it where it hurts (the wallet).</text></comment>
<story><title>CEOs are hugely expensive – why not automate them?</title><url>https://www.newstatesman.com/business/companies/2021/04/ceos-are-hugely-expensive-why-not-automate-them</url></story><parent_chain><item><author>harperlee</author><text>They should then be compensated with a leveraged long-term derivative product that pays based on the stock difference between their company and the industry, 5 to 10 years apart.&lt;p&gt;&amp;quot;You want to be insanely rich? Here&amp;#x27;s a huge company that&amp;#x27;s not yours as a resource, now make it so it is the best one in 10 years!&amp;quot;</text></item><item><author>ARandomerDude</author><text>CEOs aren&amp;#x27;t paid for the day-to-day value they provide to the company.  They&amp;#x27;re paid for the long-term, strategic value the owners think they might provide the company &lt;i&gt;in comparison to other candidates.&lt;/i&gt; So if you think CEO Candidate X will make you a 3x return on your investment, but CEO Candidate Y will make you a 5x return, it&amp;#x27;s almost certainly worth it to pay him&amp;#x2F;her the extra $200K to get you there, if that&amp;#x27;s the market demand.  You&amp;#x27;re paying for experience, contact network, etc. in a job like that much more than you are how many widgets they can produce on an assembly line.&lt;p&gt;So it seems that the idea that a CEO could be automated misses the point of what CEOs do and how they get hired.</text></item></parent_chain><comment><author>Taek</author><text>The problem is that the best CEOs might not go for that. There are a lot of long term things that can impact a company for the negative, and you don&amp;#x27;t want your CEO bailing to a different company the moment that some macro event (semiconductor shortage, new competitor, global pandemic, etc) comes along and alters the long term upside of your company.&lt;p&gt;You want a CEO who is going to stick around and make the best possible decisions to improve the company&amp;#x27;s trajectory, even if that mostly means keeping the company flat as opposed to faceplanting.</text></comment>