The Eminent CEO

About the Money

‘Why am I not rich?’

‘How do I earn more money?’

‘Who do I have to be around?’

‘What do I have to do?’

After recycling through these questions over and over again, spinning the mental cogs and getting nowhere, I eventually stumbled upon a new question, a reframe.

‘How much value am I producing?’

My engineering brain then went into overdrive.

The structure of full time work, backtracking from a $90K/year position:

• Expected (after 30% tax cut) income per week: $1200.
• 40 — 52 hours a week.
• This makes for a rate of $23–$30 per hour of productive output.

Is that all I am capable of?

What would it look like, to raise the top number from $90K to $200K, towards the realm of a senior leadership / Chief Executive Officer (CEO) position?

• Expected (after 35% tax cut) income per week: $2500.

Okay, this looks better.

• 40–52 hours a week

Hmm, this is very likely to increase, not decrease, as one goes up the stack.

• This makes for a rate of $48–$62 per hour of productive output.

How does one even quantify the additional stress and responsibilities that inevitably come packaged with such a role?

Perhaps, I am too naive, perhaps I have not seen enough of the world to understand, but I suspect that the many unseen professionals who are out there putting out good work, the ones who genuinely thrive within such senior leadership roles are not doing it just for the money.

Beyond the Money

Let us consider a CEO, who is responsible for a company that employs 200 people. Although a CEO role typically sits at the very pinnacle of a typical corporate organisational chart, I believe that the CEO resides at the roots of the tree.

The CEO plays the role of the enabler, the facilitator, that lets everyone on the rest of the tree to do their best work.

Let us consider again, the hourly rate that the CEO gets rewarded with, for being at the core foundations of the tree.

A typical non-manager employee might earn $90K, while having nobody else to be accountable for.

The CEO gets rewarded $200K, while having 200 people to be accountable for.

This is insane.

In proportion to the mental energy he spent, the man who creates a new invention receives but a small percentage of his value in terms of material payment, no matter what fortune he makes, no matter what millions he earns.

But the man who works as a janitor in the factory producing that invention receives an enormous payment in proportion to the mental effort that his job requires of him. And the same is true of all men, between on all levels of ambition and ability.

The man at the top of the intellectual pyramid contributes the most to all those below him, but gets nothing except his material payment, receiving no intellectual bonus from others to add to the value of his time.

The man at the bottom who, left to himself, would starve in his hopeless ineptitude, contributes nothing to those above him, but receives the bonus of all of their brains. Such is the nature of the ‘competition’ between the strong and the weak of the intellect.

- from Atlas Shrugged by Ayn Rand

The next question to ask then, is this:

‘Is $200K enough to pay for a CEO’s productive output?’

Imagine a world without the CEO working, producing and creating, what would that look like?

‘Enough’ — to what standard?

Perhaps, a corporate salary might never do complete justice to an eminent CEO, which brings us back to the idea that people in such positions look for qualities beyond just money.

Set an Aspirational Hourly Rate

No one is going to value you more than you value you. Set a high personal hourly rate, and stick to it…

Factor your time into every decision. Say you value your time at $100 an hour. If you decide to spend an hour driving across town to get something, you’re effectively throwing away $100. Are you going to do that?…

Keep in mind that you will have less time for work, including mentally high-output work. Do you want to use that time running errands and solving little problems? Or do you want to save it for the big stuff?

- from Naval Ravikant

Being a highly competent CEO is, in most cases, not a bad position to be in. The specific knowledge, the networks, the field tested character traits — the core drivers of value creation — are already well developed, just laying dormant for a more efficient money machine.

The idea that the CEO’s production of value is already so high, that now the task ahead is to capture more of that creative output for himself.

Not to get what he deserves or needs, but to receive more of what is originally his.

Become a Producer

Money is the byproduct of value creation, not the other way around.

The next time the question of ‘Why do I not have enough money?’ arises, ask instead the question of:

‘How might I create more value?’