Paternity Leave and CEO Worth

While it’s behind a paywall, there’s a very good Pando article about Mark Zuckerberg’s return from paternity leave. It touches on a lot of good points: it’s important that Zuckerberg took leave, is Zuckerberg getting ‘extra credit’ because he’s a man, and so on. But there was something else in the article that was very interesting (boldface mine):

Facebook is a large company with many managers. If the CEO stepping away for two months would have much impact at all, shareholders would have a far bigger key-man concern….

The fact that the company performed so well in a horrific year during that leave hopefully silences the lone critics who said it was irresponsible.

There’s no doubt Zuckerberg massively increased the wealth of Facebook (essentially starting from zero). But at this point, a significant amount of the wealth creation at Facebook is coming from many other people, yet Zuckerberg is still getting a lion’s share of the wealth the company generates. After all, he was basically gone, and the company didn’t just survive, it did very well.

In other words, much of his current wealth generation results from past work: to a considerable extent, he is currently getting paid for past performance. When people much farther down on the totem pole do the same thing–seniority rules–this is seen as a horrible thing. But for CEOs, not so much, I suppose.

This entry was posted in Economics. Bookmark the permalink.

1 Response to Paternity Leave and CEO Worth

  1. I agree most CEOs are overrated and overpaid, but Zuckerberg may not be a good example.

    AIUI, Zuckerberg’s wealth doesn’t primarily come from *managing* Facebook, it comes from *owning* it. I imagine he draws a large salary as CEO, but it’s secondary to his stock holdings, which are of course a reward for his past achievements in founding the company.

    The general strategic direction of Facebook probably didn’t change much in a couple of months. Zuckerberg could delegate routine decision-making, come back after nine weeks, and pick up where he left off. If he was away for longer (say, six months or a year), his absence might make more of a difference. (Then again it might not, we don’t know either way.)

Comments are closed.