Overpaid and underworked CEO's.

"Employment is like the National Lottery. You have a 1 in 300,000
chance of becoming very rich. Or you may end up with a miserable pension and a paper round at 70."

Joe's socialist instincts were twitched by this BBC article about executive pay. It explains why bosses are overpaid and underworked.

It boils down to what economists call "tournament theory". Consider tennis. Roger Federer is paid for winning not for trying. His huge pay packet is a reward for past victories not for hours worked on court.

Similarly, your boss is being rewarded for past victories. His pay packet is not intended to motivate him, but to motivate you. Tournament theory explains office politics. Either you can strive to win, or you can strive to make your colleagues lose. Alternatively you can choose not to play.

Joe thinks this third way is the most rational and the least ugly. Employment is like the National Lottery. You have a 1 in 300,000 chance of becoming very rich. Or you may end up with a miserable pension and a paper round at 70.

Joe thinks it's better to diversify our 'employment' risk. We could:

• Work less hard for our employer.
• Set up some ventures off the side.
• Subvert company resources to help our own businesses.
• Forget any mad notions of corporate loyalty.

An investor would call this a balanced portfolio of opportunities with diversification benefits.