When it comes to lying, big company CEOs are a breed apart. They not only trot out the 8 lies that bosses tell and the 9 lies that corporations tell, but they’ve got 7 huge lies all of their very own. And that’s the subject of this post.Please note that, in this post, I’m talking about CEOs in big, publicly-held companies, not the small fry who put “CEO” on their business cards because it looks impressive.
LIE #1: “My Compensation is Performance-Based”
Many CEOs are hired with the distinct understanding that they’ll be well-compensated, regardless of whether the company performs well. In other cases, the performance standards are skewed so that they can be easily manipulated, often to the long-term detriment of the company. The easiest way to prove that CEO compensation isn’t really performance-based is to compare average CEO pay to the growth of the economy. If performance-based compensation were real, they’d track roughly parallel. In fact CEO pay in the U.S. has increased several orders of magnitude more rapidly than the U.S. economy, especially over the past three years.
LIE #2: “I am Being Paid What I’m Worth”
50 years ago, CEOs were paid 26 times that of their average worker. Today, CEOs in large companies are paid anywhere from 300 to 500 times as much. CEOs claim that the higher pay is justified because their job has become more difficult over time. However, the skill set required to head a company in the 1960s was arguably just as complex (and possibly more complex) than it is today. More importantly, the “26 times” figure is in the ballpark of how much Army generals are paid compared to Army privates. Obviously, the decision-making skills involved in warfare is far more taxing than running any company, making the CEO’s “I’m worth the money” protests into absurd nonsense.
LIE #3: “I Will Marry You After I Get Divorced”
Male CEOs are justly notorious for having affairs with female staffers. However, when a CEO tells a comely underling that he’ll marry her after he divorces his wife, he’s almost always lying. A study of successful men (including top executives) found that very few who have affairs divorce their wife and marry their girlfriends. In fact, only a measly three per cent (!!!) of 4,100 successful men surveyed eventually married their lovers. So rest assured, ladies, if you’re sleeping with the CEO, to him you’re just another perk of the job.
LIE #4: “My Board of Directors is Independent”
Corporate boards are supposed to provide a check on the CEO and to make sure that the interests of the investors are represented. However, in many cases, boards of directors are stacked with the CEO’s cronies, even when not actually headed by the CEO (doubling as Chairman). Furthermore, directors are often CEOs (of other firms) or CEO wannabes. As such, they have a vested interest in making sure that CEO pay continues to increase and that, even when CEOs fail miserably, they still get a golden parachute. Under these circumstances, independence is impossible, which is why boards of directors are most a collection of rubber stamps and check-signers.
LIE #5: “I am Running this Company”
The importance of the CEO inside large corporations has been wildly exaggerated. What big company CEOs REALLY do is manage 10 to 15 executives, most of whom are highly skilled and need very little direction. What’s more, those executives are operating inside a corporate culture that already “knows” how to get things done. Sure, there are tough decisions to be made, but usually those involve mediating between the needs of different groups. CEOs – even those reputed to be powerful – can almost never implement massive changes in direction that run contrary to desires and beliefs of the culture. Much of the time, the CEOs are unaware of what’s actually going on, a fact that they typically only admit when their company does something phenomenally stupid (e.g. Enron, BP, News Corp., etc.)
LIE #6: “I Support Republican/Democratic Causes”
Many CEOs pretend to be in favour for one political party or the other. However, the difference between the two major parties, when it comes big business, is virtually indistinguishable. Both parties are addicted to campaign contributions from large corporations and politicians from both parties tend to view big business as the career path for when they leave office. As a result, trade policy and government regulations are constantly skewed to favour big business, regardless of which party is in office. As such, every CEO is actually supporting the same party — the big business party — regardless of whether that support is channeled through the Republican branch or the Democratic branch.
LIE #7: “I Truly Respect my Employees”
For years, academic researchers have noted that an extraordinary number of CEOs are highly narcissistic. In fact, that narcissism may actually be an integral part of why they’re successful at the job. Narcissists, by definition, are not capable of truly respecting anybody, because they don’t see other people as entirely real. Thus, while CEOs may become quite articulate about how much they appreciate the contribution of their employees, it’s likely that, in their heart of hearts, they simply think of workers as “things” that are temporarily useful.
NOW WATCH: Ideas videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.