The parable of the CEO

A woman was taking a tour of a fortune 500 company to look at how the company worked.

First, she visited the basement to talk to the service and janitorial staff. The janitorial staff talked about their jobs and how they were to go around every so often and keep the place looking tidy. It wasn’t that difficult of a job for them and consistent work. She found out they were making $25,000** per year. She thought to herself, “that’s pretty good for services and janitorial staff within any company. That’s definitely fair.”

Next, she visited the secretaries. The secretaries were down for some chit chat. They told her all about their own jobs and responsibilities. They declared that the work was fairly easy for what they required to do, and they had a steady job that they were able to handle for the consistent hours. They had good vacation hours and were able to go home to their families and enjoy life. Afterward, the woman asked them how much they made and they stated they were making about $35,000** a year. That seemed fair to her for what they were doing.

Subsequently, she visited the employees that were responsible for making the products. They told her about their specific duties and how it related to the function of the company. They were tasked with figuring out solutions that the company could provide its customers to solve their problems. In the course of events one of the engineers volunteered that his salary was $65,000** a year. That could be boosted up over $100,000 per year as they progressed in expertise. The woman thought to herself, “That seems reasonable. These engineers have to go to school for 4 years to get a university degree. As they progress the company requires that they get further education. Yes, I could see that education level correlates with salary.”

As she is doing this, the CEO of the company walks by into his office. It is around 4 PM and the secretaries greet him. The woman nonchalantly asks them about his wherebouts. The secretaries tell her that he usually only comes in for a few hours a day most of the time to make sure the company is running correctly.

A bit later she eventually finds herself talking to some of the managers of the company. Each of these managers run teams of 5-10 engineers working on a project. They keep the group on task. They have consistent hours and are even paid overtime when they have to work extensively on projects that need to be finished by certain deadlines. The woman finally asks what type of salary they make and find out that they average a salary of $130,000** while some of the most experienced managers are making upwards of $160,000. She thinks to herself that seems really high, but I suppose they are more experienced than the engineers. Their expertise and leadership require that they should make more.

After she finishes talking with the project managers she looks at her watch. She gasps and discovers that it is 7 PM and the offices are mostly closed already. She thanks the project managers for their time, and packs her bags. She laments the fact that she wasn’t able to talk to the CEO today. However, as she walks out of the room she sees that the CEO of the company is still in his office. She wanders over and pokes her head in, and asks if she can talk with him real quick.

The CEO says sure he can chat real quick. The first thing she asks him is how much he makes. The CEO states “I make $12,900,000** as CEO of this company with bonuses included.” The woman gasps and starts freaking out. She quickly gives him a rundown that he makes 516x more than the janitors, 368x more than the secretaries, 198x more than the engineers, and more than 99x of the managers. “Don’t you think that’s unfair,” she proclaims. “Your company is super successful. You can make your own schedule! You only come in for a few hours a day and make so much more money compared to everyone else! You have so much power and so much money for so little work. That’s totally unfair. In fact, I’ve heard your case is like most companies. The CEO on average makes 380x** more than the average employee.”

The CEO chuckles and says, “Lady, they don’t pay me enough for this. The company does not pay me for what I do on a day to day basis. The value of a leader lies not in the power he weilds nor his salary. I am the one responsible to implement the vision of the company during conflict and stressful situations when crap hits the fan.” The woman has a confused look on her face. The CEO finishes packing up his things and thanks her for the chat. She mumbles out, “I still don’t understand… I can see that you have tons of extra responsibility but the compensation still seems unfair.”

The CEO has a faint hint of a smile and responds, “Whose fault is it if the company goes bankrupt? Whose fault is it that tens of thousands of people are out of a job? Whose fault is it if there is corruption in the company? It is my fault. I am the fall guy if things go badly. Do you want to be the fall guy with widespread public shame and embarrassment and be the cause of tens of thousands of people losing their jobs even if it isn’t totally your fault?”

** All salary numbers and averages based on real averages for positions in the industry.

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15 Responses to The parable of the CEO

  1. Pingback: The parable of the CEO |

  2. dvdivx says:

    Apparently this is the American Jesus as CEOs elsewhere do not have such lopsided salaries yet have the same responsibilities.

  3. @ dvdivx

    That misses the point. But I’m gonna remove that part of the story to leave it more ambiguous.

  4. dvdivx says:

    The problem with the CEO analogy is most CEOs are actively promoting things which are againt God at this point in history and as a group are as believable as politicians . Plus unlike the corporate model of different companies there is only one way to eternal life. The CEO model only works in “churches” that are world based when Jesus’s wealth is not measured by money or castles in the sky but eternal salvation.

  5. @ dvdivx

    The parable is about authority. Not about money, habits, or models.

  6. Looking Glass says:

    Eh, dvdivx has shown problems with addressing topics directly. The responses aren’t too surprising.

    As for the parable, it’s quite insightful, if you understand the reality that of the Fortune 100 companies, there is maybe 30 good CEOs among them. For any large company, there is maybe 5 people on the planet capable of properly running that specific company. (A Good CEO at one company will likely not work well at another, as each company is its own beast.)

    The Sword of Damocles is probably also good to reference in the comments. It’s the same concept. But because God is Holy, he is worthy of the authority. There’s a reason the phrase “to God be the glory” is so important. There is nothing else capable of granting you Salvation.

  7. Regular Guy says:

    @ DS

    The parable is a good one, despite what dvdix expresses, viewing this through his Left colored glasses. The illustration is about pointing out the moral outrage of assuming the CEO must be accountable his subordinates in regards to an company. The CEO is already accountable for their well-being and his overall responsibilities are on another level that can’t be compared with the employees.

    Besides, CEO pay is dictated by the shareholder’s willingness to remain invested for the skills and experience a CEO brings to the company. There is no greater moral claim by an outsider with no stake in the company to decide arbitrarily who is paid what.

  8. electricangel says:

    The book here to read is The Penguin and The Leviathan. Perhaps, also, Conscious Capitalism. Both make the point about ridiculous CEO pay not being market-based.

    If the CEO FOUNDED the company and makes that much money, good for Him. He likely deserves it. If he’s just one of the Pharasaical managers, into Gehenna with him.

  9. Exfernal says:

    Is there a correlation between the pay of a CEO and the success of his company? 🙂

  10. electricangel says:

    Yes. It’s random or, the more you pay the CEO, the worse they perform. I wonder how much of corporate underperformance is a result of executives skimming off corporate profits, and how much is due to demoralization and destruction of the economic incentive of the rest of the workers.

    Owner-operated corporations do not suffer from the same penalty.

  11. Don’t miss the point of the story. It’s not about money.

  12. electricangel says:

    I find it a horrendous slander on a guy I’m rather fond of to compare His authority to that of a CEO. Jesus is the Owner-Operator of the Bride of Christ, and he acts as an Owner, or a loving husband to His wife. Your garden-variety CEO would whore out the Bride to serve whatever purpose, so long as his power and income were unharmed (for as long as he was CEO, too. Apres moi, le deluge, and all that.)

    A good book on exceptional CEOs is The Outsiders. Most of those guys were owner-operators as well. As to the question in the story: Do you want to be the fall guy with widespread public shame and embarrassment and be the cause of tens of thousands of people losing their jobs even if it isn’t totally your fault?

    For $12,000,000 a year, I doubt you’d find many people who would turn that down. The parable fails.

  13. The parable is about “authority” not Jesus Christ specifically. Although they can be related.

    It’s not about what particular baggage is thought of about CEOs and how they are ineffective or misuse power. That’s coloring authority with fallible humanity.

  14. electricangel says:

    Then it doesn’t work as a parable. When Jesus tells the story of the Vineyard Owner whose servants, and later Son, is killed by the evil crew figuring to take over his vineyard, (Matthew 21), it doesn’t cause confusion in the audience. The ones not swift enough to get that it is about the Pharisees at least see a reasonable story about justice: man takes vengeance on those what done him wrong, and all that.

    Now, the parable about the owner who hires hands throughout the day, and pays them the same amount at the end of the day, is a bit more confusing. It strikes many people as unfair, but it actually upholds a lot of things that make society livable, like sanctity of contract, and the rights of a property owner to do with his property as he wishes.

    As I pointed out, I doubt you’d find many who wouldn’t take on the pay of a CEO in return for the relatively light stresses of a CEO; the parable breaks down there. Would anyone take on the guilt for all sins for all time, with all the suffering and being put to death? So far, we’ve had only one Volunteer; it’s a FAR less attractive proposition.

    It has at least given me cause to think. I think I’ll go work in a Vineyard now.

  15. @ electricangel

    The point is pretty clear:

    People like the money and authority that a position may confer, but they don’t think about (or don’t like) the amount of responsibility that comes with it.

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