Pardon my venting, but what does a CEO actually do?

[Platapus]

I work for a non-profit company. Our CEO gets $1,100,000 per year in salary and "compensation". What exactly does a CEO do?

I can tell you that she is not expanding our business area nor is she bringing in new business. She is very good at telling us that we won't be getting any CoL adjustments to our salaries. Raises are just a distant memory from years back.

She is actually reducing our business areas. She calls it "focusing" and "branding". So we are doing just what we have always been doing but now we are putting all our contractual eggs in one basket.

Hell, I can do nothing to grow the company and I would only charge $300,000 per year as CEO.

If a CEO is not growing the company by expanding business areas and/or bringing in new customers, what exactly does CEO do? Besides having her picture taken and collecting over a million dollars per year?

Her big business plan? We need to reduce the number of printers. That's how we are going to be more profitable. By the way, she flew out here First Class to tell us this recently.



Just two questions

1 Just what does a CEO do other than build business
2 How can I get a cushy job like this where I can get 1.1 M and have the business strategy of just doing less than what we did last year?

/rant

[Tchocky]

The CEO fulfills the role of occupying boardroom space. How does she rise to such a position? By not asking questions! Bad Platapus!

[TwoGamers]

They hire people to run there company. You got a problem with that?

[Takeda Shingen]

http://en.wikipedia.org/wiki/Chief_executive_officer

Really?

[CCIP]

While it's ironic for me to be defending corporate officials, think of this as a question that's kind of similar to "what does the captain of a ship actually do?" It's easy to ask that question in a loaded sort of way, because the captain of a ship does not (and is normally not supposed to) have his hands on the wheels, doesn't actually hit buttons that fire weapons, and usually has less specialist knowledge about any given system on his ship than crew that are assigned and trained specifically for that system. So it might look like captain, or in our case the CEO, isn't doing much to warrant his rank and pay compared to his subordinates that do the stuff, just because he's not physically doing as much as people under his command. But does that mean he's useless?

A CEO, like the captain of a ship, has an executive role, which basically boils down to being the decision-maker and responsiblity-taker. The position is (at least in theory) rewarded for the fact that the person chosen for it is trusted to make the right decisions on behalf of everyone, and to take responsibility for the results - good or bad. Because responsibility always carries risk and requires high levels of trust, the theory is that the person in the top executive position needs to have the best incentives to maintain trust and readiness to make decisions, and offset the ever-present risk of taking the largest measure blame if things go wrong.

Of course in practice that doesn't quite always work that way, but don't underestimate the importance of professional decision-makers. They are key people to running any organization. Ship captains are a good model of exactly that, for example.

[Buddahaid]

In my observations, the CEO does whatever it takes to meet profit goals, including gutting core systems, and then jumping ship before the roof caves in. In this way they can show how savvy they are to the new victim, get a larger salary and take no responsibility for the mess they left behind.

[CaptainHaplo]

CCIP nails it - and your rant makes it clear you have a bad one. That unfortunately is all too common. Bad managers move up and move into executive positions - if they don't have to take responsibilty for a screw-up, the sky is the limit.

The other thing that a CEO does is drive the corporate vision. How, where and when will the organization grow? How, when and where will it increase efficiency? Get the idea?

It is also important to realize that your dealing with a non-profit. They operate under different informal "rules" compared to a for-profit corporation. Often non-profit's are funded in a large portion by donations or grants - and as such there is a difficulty in increasing "revenue". Also, they cannot make a profit (as compared to a "not for profit" which is different) - thus if they reduce expenditures - they can increase compensation - for the "chosen" few.

[CaptainMattJ.]

wouldnt matter to me what the CEO gets payed as long as i get payed commensorate salary. My father, for instance, has been working at his company for 15 years, and was literally the first worker they employed. He still sits at 40k a year, is a floor manager, and has a VERY heavy workload, every single day. Hes an electrical engineer at F.O Engineering. He has to fill out and go over all the new orders coming in to his company, order the parts, manage finances relating to the buying of parts, he has to oversee more workers than he should, he VERY often has to come in and fix their mistakes ,he builds all of their products along with the other workers, and hes still far below the chain of command. He takes orders from someone who couldnt manage a lemonade stand, and knows next to nothing about electrical engineering, and still bosses him around like he knows exactly what can be done and what should be done. Ive seen my father work, a couple of years ago, when i still lived with him. He brought me to work. And it was disappointing to see that my Dad, whos been an electrical engineer for 25 years, 3 different jobs, is still paid so little yet does so much. Without my dad its hard to see that company doing very well, most of the new engineers out of college are still inexperienced and often need his help.

This is the type of unacceptable things that happen in the business universe. The hardest working are also some of the lowest earners. CEOs do a helluva lot but are being payed ungodly amounts of money that are not commensurate to what they do. as long as the workers get commensurate pay, and progressively work their way up as time and experience go on, then the company should do whatever they want with the rest of the money, give it to the CEO, buy a new location, whatever. But to pay a CEO millions and pay some of the hardest working so little for what they do is ridiculous. Laying off workers because you "cant afford them" yet increasing the salary of the CEO at the same time? Where does that make sense?

[Ducimus]

@ Platapus

Welcome to my world. For the most part, CEO's are con artists. I think their scumbags, but as the saying goes, "that's business".

The company I work for was sold to another larger corporation in Illinois. Which, from the day of his appointment, was the goal all along. This guy, when he gets in, cuts bonuses, ceases all 401K matching, and moves the entire freaking company to be closer to his house. Never had i seen anyone stand up in front of a whole company, and spew fourth such blatant BS in meetings. The guy could stick it to you, and smile while he's doing it. Then He focuses the direction of the company to look attractive to buyers and immediate short term gains, gets the company sold, and then moves on to his next abomination.

Honest people who had several years with the company get cuts in pay and bennifits, longer commutes, or lose their jobs entirely. The CEO walks away with a bag of money. Now we have this chicago style management where the turnover rate with our new overlords is 2 to 3 years. I don't know how long it will all be, but if and when i get another job, Im gonna try and avoid the corporate world. It's a souless cuthroat place i don't care for. Probably why a number of people i knew quite before the company got too large.

[em2nought]

Maybe CEOs should be forced to put a large percentage of their assets into something like a company bond, but with a maturity date like a CD(wait bonds do have a maturity date been awhile since I had one). Companies go bust five years down the road and bonds are practically worthless. Would make for good incentive not to run a company into the ground. Won't put your money in the bond, guess you don't want the job.

[Platapus]

Originally Posted by CCIP

think of this as a question that's kind of similar to "what does the captain of a ship actually do?" It's easy to ask that question in a loaded sort of way, because the captain of a ship does not (and is normally not supposed to) have his hands on the wheels, doesn't actually hit buttons that fire weapons, and usually has less specialist knowledge about any given system on his ship than crew that are assigned and trained specifically for that system. So it might look like captain, or in our case the CEO, isn't doing much to warrant his rank and pay compared to his subordinates that do the stuff, just because he's not physically doing as much as people under his command. But does that mean he's useless?

Great point, but there are critical differences between a captain and a CEO.

The captain of a ship is held ultimately responsible for anything good or bad that happens. I mean really held responsible. There is balance. When was the last time a CEO ever went down with the company. Captains are the last to abandon ship, but CEOs seem to be the first to jump ship.

The ship's captain also gives direction, often literally, True the captain is not the one turning knobs or even calculating courses, but the captain is the one making the decisions on where the floaty thing is headed. In other words, the captain is the one who really knows what the ship is supposed to do. I am not seeing that in my CEO.

There just does not seem to be any accountability.

And the biggest difference seems to be that a captain cares about the ship. The ship is a part of the captain's life. It is almost like a marriage.... until sinking do we part.

Can the same be said about CEO's? Perhaps they would fight more for the company if they did not have the platinum ejection seat.

I am just bitter.

[Platapus]

Originally Posted by em2nought

Maybe CEOs should be forced to put a large percentage of their assets into something like a company bond, but with a maturity date like a CD(wait bonds do have a maturity date been awhile since I had one). Companies go bust five years down the road and bonds are practically worthless. Would make for good incentive not to run a company into the ground. Won't put your money in the bond, guess you don't want the job.

A great idea. I like the idea of, when practical, to put CEOs on a very large commission. Something really big to attract and motivate them. But it is linked to the success of the company. Run a successful company, get rich. A successful CEO should reap the benefits. They earned it.

If a CEO believes in the company and is committed to the company, why wouldn't they accept this commitment?

But a CEO who does not run a company well, why should they get huge compensations? Why are we rewarding CEOs for mediocre performance?

[nikimcbee]

I work for a non-profit company. Our CEO gets $1,100,000 per year in salary and "compensation".

What kind of "company" is it? I can understand if you don't mention it by name, so what line of work is it?

[CCIP]

Like I said, a lot of these things are "in theory". But I think it's more important to look at this case-by case and consider the culture of different companies and different lines of work here. Yeah, there's a lot of famously bad CEOs, and yes, there is a problem with corporate culture in America when it comes to executives. But that doesn't discredit the role itself, which is still an important one if you want a company to work. For every terrible CEO, there's bound to be at least another good one - or else the entire corporate world would collapse in short order.

A lot of what I see here is generalization and stereotyping, which doesn't necessarily reflect what the position is supposed to be.

[Buddahaid]

It did and we all bailed them out because they were too big to fail.

I have almost no respect for CEO's anymore based on experience. Sure about 20% were actually good for business, but the rest were short term and only motivated by they're bonuses. No real interest in building for a brighter future for anyone but themselves.