Everyone's a "Vice-President"

MSNBC has a news video called "Title Wave - Everyone's a Vice President." The video points to a 22-year-old Japanese female and recent college graduate, who is a vice-president of HR operations at a US software company (TopCoder). Donald Trump actually says in the video that he gives away vice-president titles in lieu of salary increases to retain top talent.

When I first looked into the "facebook" of classmates of my MBA program, I was stunned to find that perhaps half or more of my classmates have VP titles or equivalent or better. I soon learned about the phenomena of title inflation, especially in the finance industry, where investment bankers two years out of college are commonly handed a VP title. The video above states that Goldman Sachs has 6,500 vice-presidents; in fairness, these junior VPs often have salaries exceeding those of genuine vice-presidents in other industries.

I always thought that the vice-president title may have some legal significance, such as indicating authority of a company officer. I know that it's important to use one's correct legal title in company documents, because the misuse of certain titles (eg, partner, CEO, member, manager, owner, proprietor) may confuse other parties and introduce personal liability in a court case where there would otherwise have been none. Many financial companies are/were limited partnerships, so actually a vice-president title is perhaps legally empty in comparison to a "partner" title.

It is easy to get a VP title by joining a startup; it's even easier to get a CEO title by filing an application for a new company. Some companies even mock the vanity of these titles by coming up with new hilarious ones like "Chief Yahoo." (Pardon me. I can't really recall any better titles, because of their infrequency and uniqueness.)

Comments

[Tom]

I was once told a story that I like to share whenever this topic comes up.

There was this company whose performance had been down for several quarters. The situation had gotten so bad that the CEO himself was staying late at night to straighten out the company and try to remedy the situation. Over the next couple months the CEO began increasingly ignoring his senior staff and executing plans that he came up with on these late nights. Sure enough the company began to turn around much to the chagrin of the senior staff who had been no part of the turnaround.

The CEO’s secret was that, during those late nights, the janitor would come in to clean his office and they’d talk about the companies woes while he cleaned. As time went on the Janitor developed more influence than the entire executive staff because he just happened to know what he was talking about.

Bottom line, there are only two positions that really matter in most companies and that is the CEO (who runs the company) and the CFO (a position that is essentially the check that balances out the CEO). Those are the only positions that really hold weight with a board of directors in a public company or with the founders in a private company.

Everything else boils down to “how much influence do you have on those two people”. Call yourself VP, Senior VP, Chief “whatever” officer or anything your imagination can make up. In the end, it’s all about influence and those people who fall for the old “Title Bump” trick probably don’t have that much of it.

[David]

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Thanks,
Dave

[nburger]

fwiw, Wu Yingying is almost certainly Chinese, not Japanese.

[George]

Another example of an irreverent CEO title is the Mozilla Corporation CEO's "Chief Lizard Wrangler" - http://www.mozilla.org/about/staff#members

[Bruce]

Yes, that's a Chinese girl, not Japanese. And to me the whole thing is just a joke.