One of the companies I used to work for made an interesting change a few years ago: it’s now an employee-owned company.  As it was explained to me, this provided two advantages that have helped keep it profitable during some rough years:

  • The considerable expense of the former CEO’s salary is gone. 
  • There are tax benefits to being employee-owned.

Some of you sickly corporations out there might want to try it: buy out the VC guys, fire the CEO, profit!!!

One may reasonably ask, if this is such a bright idea, why don’t more companies do it?  Perhaps there’s a good economic reason for this; if so, it certainly didn’t apply to my former company.  I’ll wager that the answer is mostly social: the decision maker at most companies is the CEO, the very person who loses his job in this scenario. 

Do companies really need rock-star CEOs?  The last few years should have shown that they’re as likely to drive their companies into the ground as to make them fly.  Personally I suspect that in a century or less, people will look back at the CEO era with amused disdain, as we look back at the age of kings and empires.

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