> Is meritocracy only for the poor?

Isn't it obvious that's how our society is structured? The success of the sons and daughters of the hyper-affluent is non-negotiable - they'll get fancy jobs through family friends and continue making bank without being very competent.

Those at the bottom, if they work really really hard, might be able to join them

I'd argue that's how every society ever has been structured. We have an innate desire to see our children succeed.

Seems like a self-imposed version of the Dilbert Principle.

Agreed. There are a lot of great studies out there that show why great-performing CEOs really are worth the money-- GREAT! But then the flip side of it is, in order to attract those great CEOs, you need a comp package that looks generous enough, which includes de-risking their decision to join your company.

I wish there was a good enforcement mechanism to tie their pay to performance -- for good AND bad.

There are also studies that CEO pay doesn't correlate at all as a predictor of their success.

Numerous studies show the opposite.

See here: https://www.institutionalinvestor.com/article/b1db3jy3201d38...

...TL;DR version here: https://eomail1.com/preview?p=d9e18eae-6673-11e9-9307-06b469...

...here's another: https://www.wsj.com/articles/best-paid-ceos-run-some-of-wors...

...and here's another: https://www.epi.org/blog/ceo-pay-still-not-related-to-perfor...

Source?

reminder that CEO pay is negatively correlated with company success (https://www.wsj.com/articles/best-paid-ceos-run-some-of-wors...)

If you assume CEOs are basically success signalling devices without active influence on success whose prestige (and thus, the success they signal) is harmed by association with failure, that makes sense: the added pay is compensation for harm to prestige.

Yes that would probably explain the negative correlation.

That said, if good CEOs actually controlled the direction of the company and were compensated higher to attract talent - I would expect that to override the negative effect for a net positive. Since that's not the case, I think as you suggest that CEOs are "without active influence on success"

When hiring for a CEO a company that offers negative reinforcement linked to performance will lose out against a company that'll promise you the moon regardless of the performance. It's the CEOs that have their pick.

Please link to three of those studies.

the bad is not possible, if a CEO make a decision with a chance of 50/50 being a good or bad decision. if it is a good decision CEO makes lots of money, if it is bad they get 0.

that is not a good thing, out of 2 monkeys throwing darts one of them will make money.

Thats not how business or probability works.

it is defiantly how probability works.

if you bet on an event with 50% chance of earning $1 or 0. your bet is worth $0.50

you need the bet to worth $0, and that is only possible by making CEOs financially liable, and that would never happen, nor is realistic, a CEO's decision could cost company billions.

so by this analogy the riskier the CEO's actions the outcome is greater for them.

if the bet pays off, they win big, if it doesn't the shareholders lose.

Even the poor don't have a meritocracy. Plenty of meritorious people have otherwise been screwed by lead paint, abusive landlords, terrible teachers, imbalanced policing, hiring bias, and more.

I CEO of a large public company who fails is likely to end up with a ruined career. Exit packages compensate for that risk.

> CEO of a large public company who fails is likely to end up with a ruined career.

Except for the ones that go to prison, that doesn't really seem to happen; people who fail as CEOs tend to turn up in very well compensated executive (not necessarily, but still often, chief executive) positions elsewhere.

The executive class that populates boards and C-suites (and overlaps significantly with the major investor class for whom ultimately boards and C-Suites work) is heavily networked and anyone who fails in a mere job in that class usually had plenty of connections willing to help them get another similar one largely independent of merit.

Does that really happen? The CEO of my company left his last company in disgrace. His 'ruined career' means he makes 15M a year instead of 20M. I need that kind of 'ruined career'

Same here. In fact, the very Googleable person that I call CEO today took > $5 million in severance from the last 2 companies he fucked up. I've been hearing this story my entire life, now I have the privilege to be old enough to see it first hand. What a treat.

Really? When has that happened?

https://en.wikipedia.org/wiki/Tony_Hayward

>Anthony Bryan Hayward is a British businessman and former chief executive of oil and energy company BP. His tenure ended on 1 October 2010 when he was replaced by Bob Dudley following the Deepwater Horizon oil spill. He has been chairman of Glencore Xstrata since May 2014.

https://en.wikipedia.org/wiki/John_Legere

>John Legere (born June 4, 1958) is an American businessman who is the chief executive officer and former president of T-Mobile US. His leadership at Global Crossing was controversial, which included large executive bonuses and filing for bankruptcy.

>Really? When has that happened?

If you're talking on the scale of a non-founder CEO who is making $15 million per year, it happens all the time. There just aren't that many public companies that pay that much. The headline in this story comes from an analysis of the 350 largest publicly traded companies. A fired CEO can't just go down the street and find another $15+ million dollar salary ruining another company. Two examples would be Melissa Meyer and Ellen Pao. Both of whom are basically unemployable outside of board memberships.

"outside of board memberships", that six-figure sinecure with two annual meetings and a rubber stamp? Heaven forbid they be forced to stoop to THAT level.

But they're not six-figure salaries.According to [1] average base pay is $25,000. Bigger companies do pay more, into the $200,000 range, but it's not like failed CEOs are asked to join boards of huge companies.

1. https://work.chron.com/director-corporate-board-paid-19587.h...

Unemployable with millions of dollars to invest in whatever it is they want. It's not all roses, but it's not as if their lives are over.

But that's not how it works at all?

They almost always get a very good C-suite job after and remain on boards with influence

Average joe getting terminated from a job will not receive references from that employer. References are critical part of most professional interview process.

When we were interviewing CEOs for my company, one of the things that surprised me was the interesting set of backgrounds we encountered. One, for example, had previously pled guilty to a federal indictment. We didn't hire him, and he went on to be CEO of another startup.

I think the CEO career risk, excepting gratuitously bad behavior at the wrong time (see Mark Hurd), is actually quite low and very, very overstated.

Re: "CEO...who fails is likely to end up with a ruined career."

Maybe as a future CEO, but I'm sure they'll have plenty of offers for upper-middle management and still be in the 5% to 1%. They may have to sell half their beemers or something, the horror.

>I CEO of a large public company who fails is likely to end up with a ruined career.

So might Joe worker. Where's his compensation package?

Meritocracy is like race: a myth. It doesn't exist. It's different groups of people split along arbitrary societal boundaries, decided by people with poor ethics and conflicts of interest. After all, nepotism isn't illegal, it takes many forms, and it just so happens to explain a whole lot about the distribution of resources and opportunities.

Back before she fell off the deep end, Roseanne had one of the most insightful lines I had ever come across: "The object of business is to keep your buddies working, even if they’re fuckin’ idiots." Keep this in mind and the world makes a lot more sense.

https://classic.esquire.com/article/2001/3/1/what-ive-learne...

Well that article is really from a different time.

> The wife is the one who serves. But she is also the one who rules. It’s weird, because you have to stay humble and be strong all at the same time. The husband? He serves, too, only in a different way. And he protects. Just like the LAPD.

Even the reference to the LAPD in what seems to be a (positive?) light

Well it's still Roseanne, but I'm not endorsing the whole thing.

fair re roseanne

Meritocracy is the lie poor people are told so they don't get uppity about where all the wealth is going. So in a way, yes, meritocracy is only for the poor.