I'm not saying it is a bad idea, but CEOs face the same problem as politicians - while they are responsible for whatever happens (good and bad) they are not actually in control of very much.

A bad CEO can destroy a company in a few years. A good one can set up years of profits. But the "can" there does some heavy lifting - sometimes a CEO will walk in to a company and there just won't be any opportunities. Eg, you take over a restaurant chain then the COVID overreaction happens. Not much the CEO can do.

Long and short, I can see why a good CEO might go for guaranteed compensation rather than big payoffs for good results. They can't guarantee good results. Nobody can make that sort of promise.

$800M? Can you imagine the public howling at that kind of CEO comp?

The more hilarious part is the incentive to pump the stock and leave someone else to hold the bag would be even worse.

This would reach crypto-scales pumping.

Yeah, if you're building a product that's supposed to last 50 years stock value in year one is far from the whole story.

I am not sure that this will work unless the company is considered a highly desirable place to work for. A prospective CEO might simply walk over to another company which has a more lucrative deal. So you might end up with people who are either desperate, or those who are highly able and see that as a challenge. The second might be very rare.

> would be better off if they promised a $800m incentives-based / performance-based package (e.g. stock options etc.) than promising $80m if the CEO performance sucks.

I don’t know about the relative ratios between the two but i believe you need both.

From a perspective of a succesfull CEO candidate with a proven track record joining your company is risky. There might be something structurally wrong with your industry, or there might be some “ticking bomb” with your business (like some hidden technological flaw, or personality conflict, or regulatory/compliance risk, or the risk of some catastrophy hitting your factories/offices) Many of these are already present before the CEO candidate joins and there is nothing they can do about them.

Basically your business might stink and “explode” in the face of the new CEO. On the other hand the CEO candidate presumably have some other options. You are usually not recruiting CEOs from the literal bread line.

Let’s think through a concrete example. You tomp is a succesfull business person and you estimate you will conservatively earn $200m in the next 5 years. You have unique skills and they offer you a chance to become the CEO of Boeing today. You have what you belive is a good plan to restore Boeing to its former glory and the pay package will net you if everything goes well $800m in the same time frame. Sounds good, isn’t it? But you are worried that some gizmo in the airplanes already out of the factory might have some flaw. Maybe costs were cut and maybe some part you have never even heard about fails, kills a few thousand people a year after you joined and tanks the whole company. You don’t know what is the chance of that happening, nobody knows. What you know is that if that happens you will earn in your estimate $0. If that happens you might need to sell off your yacth, and tell your daughter she has to drop out of that lovely swiss private school she loves so much.

Will you join?

I didn't suggest no compensation. Obviously I would want to be paid some base salary, comparable with whatever I could earn elsewhere ($1m / year? $1m / month? etc.)

But instead of a $80m golden parachute (failure reward), I'd offer $800m options (success reward).