Mobs, Messiahs, and Markets

Corporate Heights

And there you have the explanation for one of the many sordid features of the early twenty‐first‐century public spectacle … outsize CEO salaries. They are the bright feathers of the high‐ranking male. Top business leaders have become like sports heroes, but without the talent. You need not have any real knowledge of the business you are getting into, or, as Bernie Ebbers demonstrated, any real knowledge about business of any sort. What will get you a job as a leader in the corporate world is the same thing that will get you a woman in the mating game—outsize confidence.

Human life—apart from the obvious physical aspects—is largely about what scientists call “impression management.” A man with a good line of talk and a confident air about him gets almost anything he wants, and that includes the CEO job at a major U.S. corporation. Psychologists have done studies to that effect. A man who is confident beyond his merits is much more likely to succeed than one with a modest assessment of his abilities. The modest man will, of course, usually be the better choice—his modesty is usually based on a reasonably accurate view of his skills and the challenges he faces. The immodest bluffer, on the other hand, is almost certainly a fool and likely a menace as well. He misjudges the situation in front of him and imagines himself the master of it. But shareholders—as well as voters—have no real way of knowing who will make the best leader, so they actually tend to prefer the ...