There are also the golden parachutes.

CEOs fail all the time, and they aren't shunned but rewarded with golden parachutes and positions on boards of other companies, biding their time until they can "come off the bench".

The management club is something to be admired and I wish engineers would try to adopt some of its behaviors instead of viewing ourselves as mercenaries.

Yes, the board provides a starting point, but it's much more collaborative negotiation - and you (as the incoming exec) are gonna negotiate based on the criteria I mentioned. It's not at all like an IC where you basically get a "take it or leave it, plus a few % more on salary if you push back" offer. It's a different universe.

Is it fair? I dunno. The "intrinsic value" argument doesn't really apply - the CEO is worth $10M/yr if the board thinks they are.

Engineers are too impressed by their own intelligence.

The great irony, of course, is that the messy and immoral world intrudes even there because rational idealists can't find consensus and are subject to the biases that require conventions, institutions, politics and regulation just like the legal and business worlds.

If we were rational you might say we chose "playing with fun toys" over "controlling thousands of people and millions of dollars, and influencing millions of people and billions of dollars". Perhaps, for some people, that is indeed the rational choice if you don't really trust yourself.

The hiring of a CEO isn't as technical or data-driven as one would think such an important decision would be. It often comes down to who the board feels most comfortable with/trust, often times based on personal relationships. As you ascend beyond the 1% to the .1% or .01%, you're playing with a vastly different set of rules.

People on corporate boards generally are on multiple corporate boards. I'd wager that if you looked at the social network graphs of board members, the CEO's they choose are almost never more than one hop away. CEO's that have faced massive scandals or have torpedoed companies seem to always find new jobs because once you're in that CEO/board member social network, you're never really out unless you do something unforgivable like Bernie Madoff. Most important, they have the luxury of time and options since working at this point is purely optional and not needed to pay for expenses. They can work on a vanity project, start their own foundation, join other corporate boards, focus on investing in companies instead of running them, make inroads into the public sector, or they can wait until any heat dies down or is forgotten before re-entering. This is one list of what execs did after a scandal: http://money.cnn.com/gallery/investing/2013/09/13/financial-...

It's a different dynamic since most people work for money while CEO's accumulate wealth. Their money works for them, not the other way around.

I've seen some spectacular SVP+ flameouts, and they all land on their feet. The only exceptions are substance abuse and other problems like that.

This is not how things work, either.

Executive compensation has a nasty ratchet effect built in that I'm really surprised more shareholders aren't fighting.

:P