I have long wondered whether the upper echelon of business could really be modeled as a competitive market. There are so few buyers and sellers and a really high degree of firm specific assets. Making matters worse, everything is done by committee at the top. This revelation by Jack Welch published by the Economist only reinforces those suspicions.
This columnist once heard Mr Welch tell a chief executives’ boot-camp that the key was to have the compensation committee chaired by someone older and richer than you, who would not be threatened by the idea of your getting rich too. Under no circumstances, he said (the very thought clearly evoking feelings of disgust), should the committee be chaired by “anyone from the public sector or a professor”.