Aaron's cc made some fascinating suggestions. Not very useful, but fascinating. The reason that they are not useful is because they misunderstand the purpose of a corporation: a corporation does not exist to employ people, but to deliver a return to their investors. If that were not the case, investors would not invest. (Putting money into a corporation that does not generate a return is not investment, but spending, and what did you buy, exactly?) And if investors do not invest, there is no corporation, or the corporation shrinks dramatically as its funds dry up.

Stock options are directly linked to performance in that realm: if the value of the stock increases (a reflection of the return to the investor increasing), the holder of the options can sell the options and make money. If the value of the stock falls, the holder of the options doesn't make any money from them.

There are two reforms, though, that could make stock options a better tool for getting good CEOs: value the stock options against an index (if S&P 500 goes up 10%, and your stock goes up 8%, you didn't do as well as the broader market and thus the value of your options should be such that you don't make the 8%; this is a way of taking inflation into account) and give out fewer stock options. The sheer amount of the stock options most companies offer their executives, combined with the special perks like pensions or health care that survive bankruptcy, so distort the corporate executives' compensation that their decision making is forced to the short term.

Is the goal, to paraphrase Aaron's cc, to have a team with 150 people on it, or a team that can win?

Baseball manager Billy Martin used to destroy teams by burning out his pitcher's arms in one season.

Is the goal to win one season or to fill the stadium for a decade with a competitive team?

How about linking stock options to layoffs and outsourcing. Fire 10% or outsource 10% and you forfeit 10% of your stock options.

Any CEO caught having illegals working under his shift ought to make the company legally constrained from laying off or outsourcing 5x the number of illegals caught for five years.

Until there are disincentives for the golden parachuted, there is no accountability.

One hypothetical that I think is interesting is: Suppose you took a well-educated, well-trained MBA, making say $200K a year. You let them make all the business decisions for a company for five years. Would the average CEO actually make better decisions? Or does the salary of a CEO not actually reflect his business skills, but rather other skills, such as social networking, political in-fighting, etc.

The instant post is a predictable exercise in fact-free rhetoric, which might merit a B+ in freshman comp. Anyone who troubles to read the newspapers (not, evidently, required reading at the Ayn Rand Institute) knows that failed CEO's typically collect the same gigapackages of $$$ that successful ones do.

Of Rand herself, one cannot improve on Dr. Johnson's putdown of an earlier fraud: "where he is interesting, he is not original, and where he is original, he is not interesting."