Friday Links, June 25

1. If you pay people more, they will be more productive.  Wow, who knew?

Glad to see corporate executives rediscover the power of efficiency wages (i.e., paying above-market wages with the aim of improving employee motivation and productivity), something that Henry Ford recognized back in 1914.

Commentary: Here’s why I raised my company’s minimum wage to $25 an hour

It may sound counterintuitive, but in the long run a higher minimum wage is better for our bottom line.

Fortune

For more on the significant impact that efficiency wages had on Ford's productivity and profitability, see this nice NBER paper from 1986, co-authored by Harvard economist Larry Summers:

Did Henry Ford Pay Efficiency Wages?

Founded in 1920, the NBER is a private, non-profit, non-partisan organization dedicated to conducting economic research and to disseminating research findings among academics, public policy makers, and business professionals.

NBERDaniel M.G. Raff

2. Activist investors can be a force of good.

This NY Times Magazine article about the campaign led by Engine No. 1, an activist investor fund, to land seats of Exxon Mobil's board is well told and highly instructive:  

https://www.nytimes.com/2021/06/23/magazine/exxon-mobil-engine-no-1-board.html

I also recommend reading Engine No. 1's campaign document, which is a clear inditement of corporate intertia and managerialism run amock:

It’s time to Reenergize Exxon.

The energy industry and the world are changing. To protect and enhance value for shareholders, we believe ExxonMobil must change as well.

Reenergize Exxon

3. CEO trends

The Conference Board is out with their annual report on CEO tenure and turnover. Among the more interesting findings is that CEO turnover hasn't really gotten worse in the last 20 years:

The study also shows how women representation among the CEO ranks is vanishingly small--about 6% of total.  What surprised me is the that fact the Utilities sector has the highest proportion of women CEOs, and it's not even close.

Here's the link to the report:

https://www.conference-board.org/topics/ceo-succession-practices/ceo-succession-practices-2021