Hacker News Reader

Comment by burkaman | Hacker News Reader

I always thought this was a weird definition of "rational". If you're already rich, which I assume most hired CEOs are, why is prioritizing money over people a more rational decision? Is that money going to change their life in any meaningful way? Is it any less correct to say it's in their best interest to stop working as soon as they have enough money to live comfortably for the rest of their life, to minimize stress and maximize lifetime?

I understand that it's rational behavior for someone driven exclusively by money, but that's an important qualification. Most people are not money robots, so they aren't given these jobs.

View on HN

It's the corporate structure. The CEO either grows the year over year profits or he gets punished/fired by the board. Boards pick CEOs based on a history of delivering growth at any cost (this is one of the irrational decisions, they should prioritize long term growth over short term, but they rarely do). This in turn provides a strong incentive to CEOs to make bad long term decisions if it means short term gains, because they either won't be around to see the eventual collapse (having moved on to another CEO position) or else they take the long term plan and get fired by the board for not providing enough growth (or worse, reduction).

> strong incentive

But it shouldn't be a strong incentive, right? Getting fired from a CEO position is fine, you're almost certainly set for life. I understand this is sort of a circular argument, because anyone who doesn't buy into this incentive structure won't be hired as CEO, but my point is that somebody who is willing to go along with this system isn't really behaving rationally in the normal sense of the word.

> If you're already rich, which I assume most hired CEOs are, why is prioritizing money over people a more rational decision?

Generally, a non-founder CEO is a ferociously competitive person--probably to the point of being pathological. They often "play poker" in situations where there is very little upside to doing so.

Great salespeople are often the same way, they simply can't turn it off.

You are asking a leopard to change his spots after he has started eating the antelope.

> pathological

That was precisely the parent comment's point.

I understand, I just don't think we should describe that behavior as "rational". In casual conversation, the word means "sensible, logic-driven decisions that any person with good judgement would take". Here we're describing behavior driven by a particular niche, unnatural rationale, and pretty much any behavior can be explained that way.

Reply on news.ycombinator.com