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The Highest-Paid CEOs Are The Worst Performers, New Study Says

The Highest-Paid CEOs Are The Worst Performers, New Study Says | It Comes Undone-Think About It | Scoop.it

Across the board, the more CEOs get paid, the worse their companies do over the next three years, according to extensive new research. This is true whether they’re CEOs at the highest end of the pay spectrum or the lowest. “The more CEOs are paid, the worse the firm does over the next three years, as far as stock performance and even accounting performance,” says one of the authors of the study, Michael Cooper of the University of Utah’s David Eccles School of Business.


Via jean lievens
Eli Levine's insight:

Interesting.

 

It's been known that, in fields of work that require cognition, being paid higher amounts actually decreases production and overall performance.  The conclusion that was reached in the study (which was done in Harvard and replicated in India) is that you pay people in top, cognitive positions enough money to make it not be a concern for them in order to maximize productivity.  The same study also found that, for menial tasks, being paid more increased productivity and performance.

 

If you want to figure out how to configure compensation packages in your company to maximize performance, here is the data to show you the general principles of what needs to be done.  Minimum wages are good, but too high of a minimum wage will kill small companies and start ups.  Once you have a solid revenue stream established, it makes sense, based on the research, to divvy up the funds equitably amongst the white collar and blue collar employees, such that the white collar folks, especially on top, get paid a smaller ratio in proportion to the blue collar workers.  After all, you can only have so much wealth and derive so much well being from that wealth.  What's the point of spoiling productivity in your own company for the sake of it, let alone, for the sake of the whole economy that will benefit from having wealth be significantly more equitably distributed to all of those who produce the wealth?

 

It's not like a McDonalds or Starbucks job is actually all that easy a job to do.  Those who think otherwise clearly never worked or have forgotten what it was like to work in cramped, hot, fast paced environments dealing with the general public.

 

The science is there.  Whether anyone will listen to it without some coercion is another issue.

 

Think about it.

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Economist receives rock star treatment

Economist receives rock star treatment | It Comes Undone-Think About It | Scoop.it
The reception for his “Capital in the 21st Century” has led the French economist Thomas Piketty to Washington’s halls of power and New York’s media outlets.

Via Willy De Backer
Eli Levine's insight:

The one who points out a possible theory of function is hailed as a hero and villain for the public to see.

But the one who points out the impending collapse of civilization, based on evidence gathered from history, is left in obscurity.

 

I'm young, I get it.

 

But that doesn't make what I've said any less valuable or accurate.

 

But will anyone listen to me, even though I've basically got the essence of how to get out of this mess, from which either party could capitalize considerably from for generations to come?

Of course not.

 

I'm just a "kid" after all.

 

And these adults with so much negative experience are just going to keep doing what their brains have programmed themselves to do.

 

Think about it.

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Willy De Backer's curator insight, April 19, 2014 4:18 AM

More praise for Thomas Piketty in the NY Times

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The Rise of Anti-Capitalism

The Rise of Anti-Capitalism | It Comes Undone-Think About It | Scoop.it

"A formidable new technology infrastructure — the Internet of Things — is emerging with the potential to push much of economic life to near zero marginal cost over the course of the next two decades."


Via Willy De Backer
Eli Levine's insight:

Perhaps this era of free manufacture will break the current economic system (assuming that the businesses don't attempt to break it).

 

It still won't change the attitude with regards to money, society and the environment that's proving so caustic to our whole world.

 

This will be interesting to watch.

 

Think about it.

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Willy De Backer's curator insight, March 16, 2014 4:47 AM

As always, super-optimist Rifkin is great at analysing new trends in the global economy, but totally misjudges the negative implications. This is the guy who predicted the age of the "European Dream". Look where Europe is now! So by all means, read this NY Times article but put off your rosy glasses.

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Bank of England governor: capitalism doomed if ethics vanish

Bank of England governor: capitalism doomed if ethics vanish | It Comes Undone-Think About It | Scoop.it

Capitalism is at risk of destroying itself unless bankers realise they have an obligation to create a fairer society, the Bank of England governor has warned.


Via jean lievens
Eli Levine's insight:

He's right.

 

But will they listen?

 

I doubt that his American colleagues are going to be thrilled about having to do something for other people.

 

Petty, petulant, childish, the American banker is not interested in fulfilling his social and economic role culturally, from what we've seen.

 

And, thus, Capitalism collapses, either through social or environmental collapse.

 

Warnings unheeded.

 

Think about it.

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Kapital for the Twenty-First Century? | Dissent Magazine

Kapital for the Twenty-First Century? | Dissent Magazine | It Comes Undone-Think About It | Scoop.it

"Despite having made some disparaging remarks early on about the savagery of the United States, it turns out that Thomas Piketty is a garden-variety social welfare democrat in the mold, largely, of the American New Deal."


Via Willy De Backer
Eli Levine's insight:

All economics is political, because all wealth is political.  Be it a controlling influence in our media, energy sources, food resources or home goods, etc, all ownership entails a certain amount of responsibility on the part of the owners and yields considerable effects upon our world through their influence in the political/gubernatorial levels of our world.  To that end, concentration of wealth and true economic capital (the actual stuff that produces and is produced) leads to a form of dictatorship that is as fragile and corruptible as any dictatorship.  It's not good for the polity to leave economic wealth so concentrated at the "top" levels of our society, because it leaves the system prone to collapses, revolutions and uprisings that cannot reliably be put down through military force of arms or deceitful tactics.  The rebels will just keep coming, until the perceived injustice is perceived to be over.

 

What this means, is that in order to realize a less centralized, more organic and more stable polity, the members of our government must throw themselves on the mercy of the general public and reverse the policies which have encouraged the economic system to act as a cancerous parasite on the rest of society, rather than as a benevolent and necessary tool to satisfying human needs first, and human wants second.  The centralized polity under the centralized economic system is already eroding in the streets.  If the government's members are going to save their own hides, at the very least, they might as well reverse the changes of principle and goal that was enacted in the 1980's under the Reagan administration and return government's function and role to those principles and goals that was under the Roosevelt administration (even if we don't do everything the same way that they do).

 

This cancerous tendency in American society has got to be ended.  Yet the only way that it is truly going to be ended, is if those who exhibit these kinds of self-destructive economic behaviors are removed from office, researched and then never allowed back into those places again by the rest of society.

 

Sadly, I don't see humans taking up arms to put these bankers, financiers, executives, lobbyists and politicians into the straight jackets in which they belong in time to save themselves.  A sad state of affair.

 

Think about it.

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Willy De Backer's curator insight, April 6, 2014 3:10 AM

Brilliant critical analysis by James Galbraith of the new book of Thomas Piketty. A must-read.