Re:Wealth isn’t created at the top, it is merely devoured there
by lordnacho on Monday April 17, 2017 @03:55AM
(#14129747)
You've got a point. I should have elaborated before going to bed.
There's a lot of noise surrounding measurements of skill. Witness the regular articles here about how to interview people.
The reason why CEOs make so much is related to this. Very few people appear to have the skill, but that is also why their wages are inflated in relation to what they ought to get. Because the penalty for hiring an incompetent seems so high, we want to make absolutely sure we get a "real" CEO. This means there are loads of people who could do the job, but due to a lack of credentials such as appropriate previous experience, those people cannot be hired. There's also the fact that you can point to the credentials if things do go wrong. "They hired him there, so it must be our business that's hard to fix." I think it's Tyler Cowen who calls this a star system. Similar dynamics occur in other high paid labour markets.
If you look at what a CEO does, you have to wonder why so many divisional managers are often passed over for an external candidate. After all they should know a fair bit about the company and have similar skills.
On a more software related note, look at job ads for programmers. Why do they specify one web framework when probably anyone who's used any of the major ones would probably be able to learn quite easily? This type of dynamic probably gets even stronger when we're talking about high powered exec jobs.
There's a lot of noise surrounding measurements of skill. Witness the regular articles here about how to interview people.
The reason why CEOs make so much is related to this. Very few people appear to have the skill, but that is also why their wages are inflated in relation to what they ought to get. Because the penalty for hiring an incompetent seems so high, we want to make absolutely sure we get a "real" CEO. This means there are loads of people who could do the job, but due to a lack of credentials such as appropriate previous experience, those people cannot be hired. There's also the fact that you can point to the credentials if things do go wrong. "They hired him there, so it must be our business that's hard to fix." I think it's Tyler Cowen who calls this a star system. Similar dynamics occur in other high paid labour markets.
If you look at what a CEO does, you have to wonder why so many divisional managers are often passed over for an external candidate. After all they should know a fair bit about the company and have similar skills.
On a more software related note, look at job ads for programmers. Why do they specify one web framework when probably anyone who's used any of the major ones would probably be able to learn quite easily? This type of dynamic probably gets even stronger when we're talking about high powered exec jobs.