It's not goofballs. It's generally misaligned incentives. Managing a 10,000 org leads to better job prospects than a 1000 person org, than a 100 person org, than a pizza box team.
Organizations tend to bloat.
Random, rapid cuts might not be the fix here, but headcount was too high.
Say I'm an engineer. And I write code all day. And I get paid by a company to do it. And it blows up in production. And I tell my boss "code tends to blow up".
Or I tell my boss "code tends to take longer than estimated to deliver".
I wouldn't be given lots of promotions/bonuses with that outlook.
We're talking about a Twitter CEO with $30m/yr+ in total compensation.
There's no way his/her view was "shrug, organizations tend to bloat" while racking in extremely competitive + good pay as somebody whose main job is to drive a company towards maximum growth/profitability.
There's no way the CEO was able to convince a majority of people responsible for paying him (the board), to pay award him $30m/yr in stock options, while he was also "bad at his job enough" to let the organization bloat without as much as an afterthought to it.
We, the people on the outside looking in, have to be missing something.
> There's no way his/her view was "shrug, organizations tend to bloat" while racking in extremely competitive + good pay as somebody whose main job is to drive a company towards maximum growth/profitability.
> There's no way the CEO was able to convince a majority of people responsible for paying him (the board), to pay award him $30m/yr in stock options, while he was also "bad at his job enough" to let the organization bloat without as much as an afterthought to it.
Why not? Why would those board members have ever called him out? The more they're paying him, the more they can pay themselves too.
Yep, my understanding is that cronyism between the executive and the board is a huge issue driving CEO pay. (Boards can also just be out to lunch.)
One way to fix this is to make corporate takeovers easier. This sort of cronyism ends up being a con on the shareholders (and the con is especially easy to pull off if the "shareholders" are passive index funds that don't pay much attention to their holdings).
By removing legal protection on corporate raiding, the board+CEO have to worry about activist investors who ask inconvenient questions like "why are you paying yourself $30M a year instead of giving shareholders a dividend?"
This is a appeal to imperfect authorities that make mistakes all the time. By that logic, Elon was able to convince banks to loan 14B to acquire and gut Twitter. There was no way the staff and shareholders of those organizations, much larger and more proven than Twitter could have been so complacent and ignorant to make such a mistake.
Elon himself is a CEO with a better track record than Parag, why is he not more legitimate if we are pretending leaders can't make mistakes
This is exactly what happens. It's also why CEOs buy other firms even though research shows the majority of takeovers fail. Just pick up any management book in the last 20 years.
There's a clear correlation between org size and CEO pay, even when not in the company's interests. Some CEOs and managers also love the power. Politics is also at work.
> Or I tell my boss "code tends to take longer than estimated to deliver".
I've used variations of that phrase throughout my career. I'm very well paid, partly because I account for this and make certain that other stakeholders are aware.
> We're talking about a Twitter CEO with $30m/yr+ in total compensation.
Jack, who was once the CEO of Twitter, has said that they hired too many people too fast.
Elon, who is "paid" way more than $30 million/year to run several companies, also apparently thinks it was very bloated.
I'm not necessarily saying the billionaires are right and the millions are wrong. I'm just pointing out the clear counterexamples to your appeal to authority. I honestly don't understand why you would be so surprised to find out that millionaires also make plenty of mistakes. The Twitter stock price to a degree is one indicator that the Twitter executives were making mistakes.
Organizations tend to bloat.
Random, rapid cuts might not be the fix here, but headcount was too high.