A rule designed to shame CEOs into taking lower pay backfired. Instead of feeling shame, executives used the new data to compare themselves to peers, leading many who saw themselves as "above average" to demand higher compensation.
Netflix ran a decade-long experiment with open compensation for top executives to promote fairness. While it achieved some transparency goals, it ultimately failed because it fostered "petty rivalries" and became a distraction. The leadership team eventually voted to revert to a traditional, more private structure.
Trump's call to cap defense executive pay at $5M primarily targets the high cash salaries at legacy primes. Newer firms like Anduril, where founders and executives have lower salaries but significant equity, would be less impacted, potentially giving them a talent and operational advantage.
Incentive plans like Elon Musk's, requiring 10x stock growth for a payout, are culturally and practically impossible in mature industries. A CEO at a company like Target would never accept such a high-risk structure, highlighting the vastly different growth expectations between tech and traditional businesses.
The court nullified Elon Musk's Tesla pay package not because of its size, but because it was a 'conflicted transaction' that wasn't properly 'cleansed.' The board members deciding the pay were not truly independent of Musk, and shareholders weren't fully informed, leaving no impartial decision-maker in the process.
A study found that CEOs trained to prioritize shareholder value deliver short-term returns by suppressing employee pay. This practice drives away high-skilled workers and cripples the company's long-term outlook, all without evidence of actually increasing sales, productivity, or investment.
Musk's performance-based compensation sets a precedent for other CEOs to approach their boards with ambitious growth targets in exchange for significant equity increases. This challenges the traditional one-way dilution model for founders and executives.
OpenDoor's CEO takes a $1 salary with compensation tied entirely to performance-based stock. He argues this model directly combats the "scam" of executives getting rich while failing. Traditional cash salaries incentivize inaction, risk aversion, and reliance on consultants to avoid getting fired, ultimately destroying shareholder value.
Despite his reputation as a frugal, shareholder-focused operator, John Malone has a pattern of significantly overcompensating executives at his companies like Warner Bros. Discovery. This practice raises questions about his alignment with common shareholders and contrasts with his public persona of "eating his own cooking."
When confronted with a potential gender pay gap, CEO Mark Benioff went on live TV and committed to investigating, publishing, and fixing any discrepancy before his team had the data. This high-risk move created immense internal accountability and demonstrated a powerful commitment to company values.
A study of companies in the U.S. and Denmark found that while MBA-led firms achieved better short-term shareholder returns, this came at the expense of employees through suppressed wages. Critically, these leaders showed no evidence of increasing sales, productivity, or investment. The resulting wage declines led to higher-skilled employees leaving, crippling long-term company health.