eye2thelongrun

Brent Wheeler has used economic analysis to drive successful investment and governance in the public and private sector for the last 29 years. Typically with an ........ eye2thelongrun

Valuing a CEO

10th March 2020

There are many who seem to be forever bemoaning the value of CE remuneration. A question for them is whether, based on the following measure, they add the value some highly paid CEs do:

Some, even many, CEOs are overpaid. It is especially galling to see CEOs that lead companies badly still getting paid huge amounts of money.

But some CEOs are very very good. They add value to a company well in excess of their salary. Some people claim once a company is big, then it doesn't matter who the CEO is. But this is clearly not true - look at Steve Jobs with Apple.

Another is Bob Iger at Disney. He become CEO in 2005. The Disney share price since then has gone from $23.80 to $150. It has employed an additional 70,000 people also.

Iger's salary is a staggering $66 million a year. That is around 0.1% of the company's turnover.

But the best way to see how valuable the market sees a CEO is the change in share price when they leave. Iger's resignation saw it drop 2.5%. The net worth is $220 billion so that is $5.5 billion Iger was valued at.

So paying $66 million a year for someone whose value to the company is $5.5 billion seems a pretty good deal.

Hat tip David Farrar, Kiwiblog.

We don’t have money to burn on green mania

27th February 2020

Bjorn Lomborg throws some sense into the pot in this February 2020 article from the Australian.

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Words of Wisdom from Thomas Sowell

26th February 2020

There’s no point blaming the tragedies of socialism on the flaws or corruption of particular leaders. Any system which allows some people to exercise unbridled power over others is an open invitation to abuse, whether that system is called slavery or socialism or something else.

— Thomas Sowell (@ThomasSowell) February 22, 2020

Does This Investment Make Me Look Good?

25th February 2020

There is more than a larrup of this in semi liberal social democracies such as NZ as far as can be readily seen.  Good reasons to stop poncing and start thinking. 

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Potentially Useful Governance

7th February 2020

It is popular to “demand” better governance. What does that mean? Here are some unpopular hints.

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