LEADING THINKER MINI-POD:
This is the Google Notebook LM Mini-Pod translation of my article of the same name. It’s a good listen as an alternative to reading the essay on a screen.
We offer this AI-generated podcast in full recognition of its potential to feel inauthentic. However, it does work well as an alternative format to experience the gist and nature of Bill’s writing. Please take it as offered and use it as you see fit.
Here’s the link to the essay version.
https://billpalladino.substack.com/p/the-end-of-the-ceo-867
The Emperor's New Corner Office
There’s an unwieldy paperweight in corporate boardrooms: CEO compensation. In 2023, the average CEO-to-worker pay ratio at S&P 500 companies hit 324:1, according to the Economic Policy Institute. (Economic Policy Institute, 2023)That's not a typo. For every dollar the average worker earns, their CEO pocketed $324. This disparity has grown over 1,200% since 1978, when the ratio was a comparatively modest 25:1.
If these astronomical packages delivered galactic results, we could squint and nod in agreement. The evidence, however, suggests otherwise. A comprehensive study published in the Harvard Business Review found "little correlation between CEO pay and company performance." (Cooper, Gulen, & & Rau, 2022) Some of the highest-paid CEOs presided over some of the most spectacular corporate flameouts in recent memory.
As just one example, according to Salary.com, President and Chief Executive Officer at Boeing Co., David L. Calhoun, made $32,770,519 in total compensation in 2023, just before stepping down after the disastrous 737 Max problems. (Salary.com, 2023) That number reflects a 45% compensation increase from the prior year, while Boeing's machinists got 1% over the previous eight years! More than just troubling, this doesn't make any sense.
It begs the question: what exactly are we paying for?
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