“Was the richest person in the world overpaid?”
Was the richest person in the world overpaid? This is a quote from a publication directed to board members.
Immediately this is a logic fallacy; as a board, this statement would introduce color, or bias, into the equation.
As always, we should use a lean approach, introducing as few factors as possible then measuring them. Adding more factors one by one, measuring each time. At the end of this exercise, a clear picture is formed. This principle also applies to Succession Planning and Competency requirement and measurement.
Beyond the apparent fallacy, I also find it interesting when the statement “well most do x", or in this case "most make x". Are we stating status quo for the sake of it? To use a schoolyard analogy, are we following status quo to conform, or is there a hard rule in place?
Is this more psychology at play?
Without any elaboration (the article provides none), I must conclude it is. The facts fit.
PDA, NACD, and others still publish about the need for increased CEO salary oversight. Maybe this is the first time it has happened? Again, based on the data available, it is difficult to believe.
Disclaimer: I do not have the time to vet the details, however:
I read Elon would be paid $2.2B if Tesla’s market cap increase by $50 billion. This was considered a moonshot. Let’s be honest, If you, or I, pitched every company on this strategy, they would all sign asap. In fact, we would all agree $2.2B seems low if that return is year after year. Remember, we are to challenge assumptions. What if the details outline a monumental global success, placing Tesla at the forefront ahead of competitors? Is status quo still the solution? Perhaps the board expertise resides less in entrepreneurship and more in corporate governance?
Note: I am not a Tesla fan, nor drink the Koolaid ™ of Elon.
Simply food for thought.
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