Useless CEO

This time it's not just about Elon Musk, but about most CEOs. And it's not that they're completely useless, although some are, but that there's often no relation between their performance and the amount they're paid in options and bonuses.

_{source: YouTube}

Just five years ago Yahoo Inc. CEO Marissa Mayer pocketed more than $180 million. Her severance pay was "only" $50 million, but when she took the job as CEO, she inherited Yahoo's 15 percent stake in Alibaba, the Chinese e-commerce colossus. Since Alibaba's increasing value caused Yahoo stock to double in her five year tenure, she was rewarded handsomely for those stocks and options; she, like many CEOs before and since, was essentially paid for doing nothing.

Both CEOs and shareholders profit when the market rallies; they'll make money even when the company's performance is poor. When markets rally for an average of 10 percent, a poorly managed company can still get an undeserved 5 percent boost. CEOs who are loaded with stock options will benefit when the FED lowers interest rates or when stock exchanges fall in love with with the industry in which their company resides regardless of the company's true performance.

Do you know that story about the frog and the scorpion? The scorpion wanted to cross a river, so he asked the frog to take him across. The frog said "No, you will sting me!" "That would be foolish of me," the scorpion replied, "we would both die." This reassured the frog, so he agreed to carry the scorpion across the river. But at the halfway point the scorpion stung the frog. "Why did you sting me? You will die too," the dying frog asked. The scorpion replied "It's in my nature." CEOs are scorpions and can't help but act according to their nature; they are natural "top dogs", need to be seen as important, always want the big corner office with the magnificent view, drive luxury cars, fly private jets and so on. Part of that nature is their willingness to take risks, often bigger than they need to, because they can never be seen as wimps. And the way they're being rewarded incentivizes them to take risks because they get get their stock options for free.

When this gamble fails, they suffer no loss, only the shareholders will lose money. And when they're laid off because of it, they still get a royal severance pay. Shareholders' stocks lose value also when they're diluted because new stocks are printed for the CEO; this happened at Nike. And companies don't even include a CEO’s gains on stock and stock options as part of their reported compensation. Nike reported that CEO Mark Parker’s total compensation was $47.6 million in 2016. But he also received $53.7 million from exercising stock options, an amount not included as compensation. The rest of the shareholders lost money because their shares were diluted when Nike printed more shares to give to the CEO.

And then there's the fact that most CEOs know little to nothing about the industries they're at the helm of. I'm still stunned by the fact that millions of people believe that Elon Musk is an engineer, when anyone can look at his Wikipedia page and see that he has a Bachelor of Arts degree in physics and a Bachelor of Science degree in economics and... No, that's it. What he, like so many of his ilk, is good at, is commanding people, act like a shitty boss, demanding from the real engineers that they invent the things he conjures up in his mind. People on welfare are often called parasites, but the reality is that hundreds of billions of dollars are gifted to a small clique of top dogs who act like scorpions, and we are the frog. So watch the below linked video for a priceless bit of comedy; Bill Burr ruthlessly takes down Steve Jobs of Apple fame after he passed away, and explains in a few minutes how useless he was, and how useless CEOs in general are.

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