In Other News, 90% of VeloNews Readers Consider Themselves Above-Average Cyclist
Floyd Norris discovers a mathematical impossibility:
Asked to rank, on a scale of one (excellent) to five (poor), the ability of their board’s compensation committee to “effectively manage C.E.O. compensation, 83 percent of the directors chose one or two, and only 4 percent picked four or five.
But asked, “In general, do you believe U.S. company board are having trouble controlling the size of C.E.O. compensation?” 58 percent thought the boards were having trouble, while 34 percent disagreed and the rest were unsure.
Since CompComs generally benchmark against the packages of CEOs in “similar” companies, you have to be really stupid or ignorant as a Director to believe you do it right while your competitors don’t.
But don’t think the Directors know they are incompetent:
Even if directors are not doing a good job, it is not a good idea to give others a say, at least to most directors. More than three-quarters are against giving shareholders a vote on C.E.O. compensation….
As for their own pay, the directors split almost down the middle: 45 percent thought pay should rise, and 53 percent thought it should not. The other 2 percent thought director pay should be reduced. If their identities leak, they are unlikely to be renominated.
Michael Jensen is rolling over in his grave, despite not being dead yet.
If I got paid 6 figures for 10 hours a month I’d know to shut my mouth too
Our economy is wobegone.
Ah yes Garrison Keeler had it right that perhaps we are a lake Wobegone species where we think we are all above average. (IN the down its all the children that are above average)
It is probably OT, a peripheral issue, perhaps, on compensation in America.
The pen-ultimate people on the dole, University Professors, have taken to hiring students as interns without pay, and using the work product to bill the research sponsor for their own time.
What a sad collection of entitled douchebags.
The former USA, you know the ones that built the economic system of this country (1933 – 1982) , decided that the top marginal tax rate should be > 90%, as a disencentive for criminal behaviour.
Glad somebody mentioned Mr. Keillor’s insights. This is also the principle that allows most people to think that most of congress is corrupt and then pull the lever for their incumbent. Back to the post. If the CEO’s polled are intended to be representative of all CEO’s then, yes, there is delusion in them thar woods. However, and I would only be this nit-picky if this weren’t an economics focused blog and I was a cyclist, since not all cyclists read Velo news, it is entirely likely that 90% of Velo news readers are above average cyclists without any delusion involved. You took a sample from a small group, elite in the sense that they are geeky about bikes and probably ride more than most people and then applied it to a larger group that includes all kinds of small time recreational cyclists. And for the record, I don’t consider my ability to ride 60 miles at the drop of a hat to make me superior, you people that don’t do that, probably get a lot more done on a Saturday than I do.
Well, I hesitate to say this in such a crowd of economists and statisticians, but what if Lake Woebegone had a bunch of normally distributed kids, with a small number of really gynormously stupid kids. Wouldn’t the left skew draw the average down so far that most of the children would be above average?
Which average?
There is a pretty standard result from asking people (board members or not) about their own personal qualities. We mostly think we are nicer, smarter and better looking than average. The reason that is usually offered for our good view of ourselves is analogous to the reason usually offered for top executives thinking they walk on water – the people around us say nice things to us. Nicer than is justified because in the case of everyday people, we mostly hang out with people we like and in the case of powerful people, because they are powerful.
OK, so the Boards are full of delusional bourgeois, but it’s probably true that 90% of Velo News readers are above average cyclists. I don’t read Velo News, but since most cyclists either think a bike is that toy you ride on bike paths on summer weekends, or is that thing you blast down sidewalks with, it isn’t hard for the Velo News readers to stand out. Between us bike commuters, the racers, and the touring club cyclists, we probably have a pretty safe lock on the top half of the biking distribution, except for off-road, where the MTBers rule.
I particularly like the “more than three-quarters are against” outside interference with their exclusive club. Really, how dare the owners interfere with the back-scratching? If they really want a say, they should become Board members! Clearly! Please pass the paté.