CEOs are responsible for 45% of a company’s performance, according to McKinsey and Company, but do they live up to their roles and earn their hefty pay packages? CEOs have access and control over an entire company and its decisions. Unlike most regular employees, CEOs are paid in the tens of millions annually, further emphasizing the inequality problem that has grown since the 1980s.
CEOs, no matter their track record, often have the backing of their corporate boards, too often resulting in irresponsible and irrational leaders who are rarely, if ever at all, questioned and punished for their mistakes.
In 2023, Google’s parent company, Alphabet, fired 12,000 employees, citing “restructuring” as the reason; however, Sundar Pichai, the company’s CEO, took home $280 million in 2019 and $226 million in 2022. This “restructuring” may not have been due to an actual company downturn, but was meant to reclaim capital to make up for Pichai’s previous losses.
In several lawsuits and antitrust cases, Google lost over $4 billion to the EU. The EU imposed multiple penalties, including a $2.7 billion one for illegally giving its own shopping recommendations an advantage compared to its competitors.
Pichai told the press that he would take “full responsibility for the decisions that led us here,” neglecting to mention the billions of dollars lost in lawsuits and antitrust fines that led to the mass firing. The “decisions” are a blanket statement for his mistakes, the countless fines Google faces under his reign.
Along with these fines, a 2024 German study found that Google’s search engine has been progressively getting worse. Google has been cluttered with affiliate marketing and AI-generated content — all while failing to provide what the consumer actually searches for.
Google is too dependent on Search Engine Optimization (SEO), a way people put as many keywords in their website to manipulate what best matches the maximum number of searches. This leads to a muddled search when users are looking for something specific, because a legitimate website’s SEO score is lower than another random site that puts as many keywords as possible in their website.
The legitimate site with just the keywords of “tree” would fall short of the site that put “tree,” “forest,” and more. Google has additionally become increasingly greedy, constantly spamming users with affiliate marketing to entice consumers into buying a product, trying to become more profitable.
Many other companies are facing similar situations. Facebook, Shopify, Paypal, Salesforce, Amazon and hundreds of other tech companies are following suit, firing hundreds of employees hired without thinking of long-term effects. Combined, the number of employees who suddenly lost their jobs from January to August 2024 in the tech industry is over 100,000. To further compound this statistic, almost half a million Americans lost their jobs between 2022 and 2023.
As with all cases, there are exceptions — cases where under-performing CEOs were replaced rather than employees laid off. A Forbes article found that 622 American CEOs left their posts in 2023. Starbucks had an entire company restructuring, and after announcing the leave of former CEO Laxman Narasimhan, they saw a 24% increase in the company’s stock value.
The restructuring was mainly caused by investors who wanted to push stock prices higher. To accomplish this goal, they brought on a highly decorated CEO named Brian Niccol. When they sent out news of the new leadership, many people rushed to invest in Starbucks, buying stocks and driving up the price.
Former interim CEO Howard Schultz, who held the position before Narasimhan, also highlighted a lack of accountability among the top levels of management. Although he stepped down in 2023 following three consecutive terms, he was given the title of “lifelong chairman emeritus.” This title fails to reveal the countless number of labor-related issues that occurred under his leadership.
An example was highlighted in 2022 when Schultz broke federal labor laws by telling baristas looking at unionization: “If you’re not happy at Starbucks, you can go work for another company.” This is further compounded by numerous cases of Schultz attempting to stop unionization. His policies have landed Starbucks in hot water multiple times, leaving the company facing hundreds of labor disputes over union-busting activity and even more lawsuits and civil matters. In other words, by all appearances, he wasn’t a top-notch CEO.
With Pichai not being fired for his numerous blunders, Narasimham only being replaced in light of higher stock prices and Schultz not receiving any punishment for breaking multiple labor laws, it’s obvious there is a lack of accountability for CEOs when they make decisions without considering the rank-and-file workers they are responsible for. These CEOs know they are unlikely to face consequences for their mistakes and can continue to enjoy their money-making tenure, only stepping down when board members finally are looking to drive up stock prices.
Are CEOs all bad? No, but they hold immense power and must use it more responsibly. To protect their workers, they must consider the decisions they make and be held accountable for their mistakes. Normal workers face firing at any moment for their errors and shortcomings. CEOs should be held to that same standard.
