Comments on: How Philanthrocapitalism coddles CEOs http://blogs.reuters.com/felix-salmon/2011/06/24/how-philanthrocapitalism-coddles-ceos/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: SteveHamlin http://blogs.reuters.com/felix-salmon/2011/06/24/how-philanthrocapitalism-coddles-ceos/comment-page-1/#comment-27935 Sat, 25 Jun 2011 17:12:51 +0000 http://blogs.reuters.com/felix-salmon/?p=8779#comment-27935 @CurtD59: I can’t tell if you’ve read Felix’s earlier posts on this topic, but if you havn’t they are important to the discussion.

Felix’s point is that Bishop & Green have, in Davos-speak, argued that the best philanthropic or societally-good efforts are to pursue capitalistic profits, and that CEOs who pursue “corporate social responsibility” should stop, and accept the glorious fact that they should merely pursue capitalistic profits which are, a priori, better for society than mere philanthropic efforts.

Thus taking a great weight off the shoulders of CEOs to think anything other than short-to-medium-term accounting profits.

Felix is rebutting the flawed argument that IBM as a capitalistic enterprise has been more philanthropic than then Carnegie Endowment over the past 100 years, by dint of IBM’s profits and technological impact on the world (but ignoring the thousands of failed non-philanthropic capitalist efforts and cherry-picking IBM). That argument is then used to say that capitalistic pursuits are necessarily better from a philanthropic perspective than mere philanthropy.

That is what Felix is discussing. Not really CEO pay.

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By: CurtD59 http://blogs.reuters.com/felix-salmon/2011/06/24/how-philanthrocapitalism-coddles-ceos/comment-page-1/#comment-27930 Sat, 25 Jun 2011 12:07:59 +0000 http://blogs.reuters.com/felix-salmon/?p=8779#comment-27930 Felix. I just don’t understand your point here.

Compensation is what it is. CEO’s are like sports athletes that are hired by the team managers in order to win games and hopefully the title. And CEO’s make a difference just like Athlete’s make a difference. And they make a drastic difference. They aren’t commodity or skilled labor, they’re at the margins. There are different kinds of ceo’s: visionary, operational, financial, and political, and different types of organizations need these different kinds of CEO’s. And picking a CEO or evolving one is a high risk expensive proposition with vast consequences, even for the smallest firm.

Im doing a deal right now where the CEO of a mid-sized company is going to walk with 10M cash. Does that seem extraordinary? It doesn’t to me. It’s his commission on value created. Do I think he’s that good? Not really. I’m not sure he was a net add for the business at all. But the reality is, that he earned what the board offered him if he could do the job.

If you’re a high performer you are a scarce commodity. You choose between offers. People entice you to take on the work – which is very hard work at that – and many CEO’s fail. And their careers are over because of it. It’s a risk-reward proposition.

Doing ‘good’ is irrelevant to running a business. Running a business is the act of not doing something bad, while trying to return profits to the people who hired you. What individuals do with those profits once they are in individual hands is the act of doing ‘good’.

So, I just don’t get your point. Is it that Davos is a self-congratulatory conference like every other field on this planet attends? Is it that you think CEO compensation is too high? Is it that you think the government should regulate CEO compensation? Or are you throwing a bone to the left-leaning people?

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By: jonradin http://blogs.reuters.com/felix-salmon/2011/06/24/how-philanthrocapitalism-coddles-ceos/comment-page-1/#comment-27927 Sat, 25 Jun 2011 11:22:07 +0000 http://blogs.reuters.com/felix-salmon/?p=8779#comment-27927 Please someone, just look at the details of CEO compensation agreements, those compensation packages set the directions CEO’s will take their companies. As long as compensation is based on the performance of each company and the measures of performance are financial, sales, profit, stock price etc etc or some mixture of these numbers, and the time frame is short term, mostly single year performance, all the discussion of “long term”, “enlightened self interest”, is so much crap.

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By: JasonDick http://blogs.reuters.com/felix-salmon/2011/06/24/how-philanthrocapitalism-coddles-ceos/comment-page-1/#comment-27916 Fri, 24 Jun 2011 22:32:26 +0000 http://blogs.reuters.com/felix-salmon/?p=8779#comment-27916 I’m just not sure that CEO’s can do much of anything here. If an individual CEO does the right thing, they’ll just be outcompeted by a CEO that does the wrong thing, as long as the system remains broken. So to me, the answer lies with government, which has the capacity to change the incentives so that the right thing is the thing that makes people successful.

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