C.E.O. Pay Is Rising in Effort to Spite the 99%

I was sent a article from the NY Times about how CEO pay is skyrocketing in spite of efforts of the "occupy" movement to raise awareness of the disparity between CEO pay and rank and file workers. This article made me wonder "How often do CEOs jump ship for larger pay?"

Shouldn't CEO's get paid every cent they're worth? That's a vague statement, as a quote from the article stuck out from front line workers "Why should I kill myself to get a 2 percent raise if the C.E.O. is going to get a 20 percent raise?"

The main justification for the huge pay increases is that it keeps CEOs in place and prevents them from jumping ship. This may be true in some cases, but shouldn't there be a published study about the topic before corporate boards make wild assertions that glorify huge packages for CEOs and imply a level of worthlessness to the average worker? 

A study of this topic should answer a few questions:
1) How often do CEOs jump ship for larger pay?
2) How successful are the companies who land CEOs who repeated jump for higher pay?
3) When CEOs jump ship for higher pay, does the industry matter or do they jump anywhere to make more money
4) Do CEOs jump to go to a better company or a chance to make more money?
5) What is value creation equation when setting pay for CEOs? 
6) When is it financially prudent to let a CEO jump since the pay required no longer makes sense?

My guess is that there will never be such a study, as there is no accountability for the people setting the pay package. When there's a bad hire, it's easy to say "we didn't pay enough for the right talent" than to answer some harder questions.

That said, a brief thought experiment is in order.  What if CEO pay was capped at $5M or even $1M/year plus unlimited discretionary options for long term restricted stock? You could have the potential for unlimited pay, but remove the incentive for jumping ship. Would you still see CEOs jumping around? Would you see longer tenures when the shorter term incentives are reduced? 

Facebook Stock Beat-down a Mark on Social Media?

Experts continue to provide their opinions on why Facebook's IPO was a failure and what it means for social media and engagement. I was taken aback by one analysis in particular on AdAge.

The argument is basically this: Facebook is all about engagement, so the the stock drubbing is a sign that the market does not believe in engagement.

The author cites examples of limited engagmement success metrics as well as the transition to modern marketing where consumers have more choices to engagement. The article author seems to believe that a weakness in the engagement model translates to a direct distaste for the stock.

I have a more simple way to look at the stock drubbing. The price is too high. If there was no market for Facebook's services, it wouldn't have somewhere near 900M users. There is clearly some value provided by the company, but with all stock, the question is perceived value - one of the cornerstones of branding and marketing. Stocks have no inherent value - a share is a proxy of the perceived value of a fraction of the company that can be bought and sold. If people believe that a company has less value than the summed value of it's shares, people sell the stock and drive the price down. If you believe that a company has more value than the price of the stock, you tend to buy. In both cases, the buyer or seller is betting on market value of the stock, not necessarily the value of the products or services from the company.

To clarify this perspective, another article that states the issue directly. Facebooks Price-to-earnings (P/E) ratio was over 100 when it was priced at $38, compared to Apple with a P/E ration of 13.6 and Google at 18.2 as stated in a CBSNews article. In this comparison, Facebook stock looks way overpriced, regardless of the actual value delivered to users. At a P/E ratio at least 5x of some other popular high flying brands, Facebook will have a hard time supporting a multiple that high in the long term.

I can see the value of Facebook as a service as it helped foster new and past friendships as well as introduced me to new products and services. I have seen it enhance brand engagement for local businesses and major retailers and product providers. I have also not yet found a way to justify a 5x multiple over Apple and Google. The stock drubbing is not a social media condemnation, but simply a reflection on price.

3 Keys to Content that Matters, or Boost Your Emotional Intelligence

Is your content worth sharing? Maybe that's the wrong question.

In a recent AdAge article, the CEO of Buzzfeed discussed that it takes more than smart people in a room to work out a good content strategy - it takes emotional intelligence.

While the article touches a good topic, this particular discuss is more valuable because of the comments. Paul Dunay, added some simple keys that people often forget:

To make sure your content is seen it must succeed in three primary areas: 1. Provocative enough to "grab" attention and 2. Compelling enough to "hold" attention and 3. Relevant enough to "share". 

That would make the article valuable by itself. The only concept still missing from this discussion the distribution strategy, but alas, creating content and distributing it are two different animals.