Au contraire. Most executives will justify their pay packages by saying they shoulder all of the risk.
Well, what risk? Losing their jobs? When you make in a year what most people make in an entire career, that's not a risk. Losing their wealth? See the prior statement, but take into account that they have money managers who are paid to do nothing but diversify holdings and manage risk. They can't be held liable in a civil suit as individuals; that's the entire point of incorporation.
Either they have risk to justify their compensation or they don't. They don't. So we need to find some risk.
When you look for another way to assign risk to increase the quality of the decisions made by c-suites, Leavenworth starts to look like a fairly attractive option.
And it would be for the convicted, when you consider that the crimes actually happened in Indonesia and Ethiopia.
As the CEO you're in a unique position to ask for more controls, more safety, more audit. So unless you went above and beyond and things were truly out of your control, then yes, you should be held responsible when disaster strikes. If you think this is too much risk, then you're free to walk from the job (and the 8 figures pay package).
We should not accept large organizations, bureaucracy and lack of visibility as a deference.
In that framework a CEO putting "safety first" will not have to worry in case a black swan events happen, it's the CEO who decided to do some "cost optimization" that will have to answer if the company routinely kills or injures people.
Feels like a strawman, or at least a misunderstanding of what "responsibility" is. Shareholders are willing to pay dearly for executives not because they need a fall guy in case something go wrong, they do so because someone in that position can easily fuck up the business, and therefore it's worth paying extra to get someone more qualified (at least in theory), so that doesn't happen. It's not any different than you not picking the cheapest guy on cragislist to housesit when you're on vacation. The premium isn't because you want a fall guy to sue in case your house burns down, it's so you don't end up with a guy who fucks up your house while you're away.
For further evidence, see how the market reacted to the murder of United Healthcare's CEO yesterday. The stock barely moved when the news broke and is still up for the month as of about half-an-hour ago. That's not the behavior of a market that sees the CEO as a watchful guardian of assets and a risk-bearer of corporate decisions; it's the behavior of a market that sees everyone as utterly disposable.
The only reason they're down today is because speculators are beginning to worry that they'll run out of executives to refuse to enter into the marketplace of sane solutions to America's healthcare cost crisis.
Activist investors and private equity are a counter to this. If it's really true that companies are ineptly run that all it takes is for someone who cares to turn it around, it should be easy to make a bunch of money by buying a company, exercising the tiniest of shareholder pressure over management, and then selling it after the company's turned around. Moreover, this strategy working would mean it's possible to get above average returns, which all institutional investors would be interested in. The board of Harvard isn't going to be very happy with their investment manager if Stanford is getting 1.5x returns by exercising good corporate governance. That's not to say corporate governance is prefect for all companies. The fact that activist investors exist at all suggests some companies at least are performing below average, but the claim that "Shareholders couldn't care less if someone fucks up the house" is delusional.
>For further evidence, see how the market reacted to the murder of United Healthcare's CEO yesterday. The stock barely moved when the news broke and is still up for the month as of about half-an-hour ago. That's not the behavior of a market that sees the CEO as a watchful guardian of assets and a risk-bearer of corporate decisions; it's the behavior of a market that sees everyone as utterly disposable.
counterpoint: https://www.bloomberg.com/news/articles/2024-08-13/new-starb...
That's literally what happened at my last company. Actually they didn't even have to turn it around. They just destroyed employee morale with layoffs and got Oracle to buy the place, and they've gutted the company further.
Which isn't good when you consider that it's EMR software, but, hey. It's been a profitable gutting, meaning that it's good for everyone from shareholders to doctors to patients.
I wasn't making a normative claim, only disagreeing with OP's characterization that executives' pay packages are justified by the threat of going to jail.
>If you're rewarded for your good decisions, it seems normal to also be punished for the bad ones, in a proportional manner.
FAANG engineers are paid pretty well. Should they go to jail (or even fined 5-6 figure sums) for bugs they're responsible for?
Software bugs caused 900 miscarriages of justice and "at least four suicides"[1]. The Crowdstirke bug caused millions of machines to go down and bililons in damage[2]. Sure, that might not compare to crashing 2 planes, but it feels entirely arbitrary to exclude those two cases.
[1] https://en.wikipedia.org/wiki/British_Post_Office_scandal
[2] https://www.cio.com/article/3478068/counting-the-cost-of-cro...
>FAANG engineers have little impact on the org individually
Sounds like the "Responsibility will turn out to be so diffuse that no individuals will be found to be liable" excuse a few comments up. FAANG engineers are 100% responsible for memory corruption bugs that they introduce.
The diffuse nature of the after effects of faang engineers actions make them harder to prosecute, but potentially much more devastating than even the tragedy of two airline crashes.
When there is no justice, vigilantes and lynch mobs materialise.