What's the justification for the amount of pay these top guys make, in salary, bonus, and even severance packages? Are they actually worth it?
Executive pay
- Thread starter KingGheedora
- Start date
Based on what other CEOs or comparables make. Yes they are generally worth it. But a lot of times they set goals that are nearly impossible to miss.
her209
No Lifer
- Oct 11, 2000
- 56,336
- 11
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I personally like the idea of simply capping executive pay at some multiple of what the median income for the company is. That way the execs can get compensated properly, and they have an incentive to make sure everyone else in the company benefits as well. The way things are now, those at the top see their pay and benefits increasing at a much more rapid pace than the rest of the world.
Key people are paid based on their worth to their company, not by their perceived worth in the public eye.
Yep. For the most part they are worth it. That's why a good portion of their total compensation (if not majority) is in stock options and awards - if the company does good and the market like then he's doing the right thing.
The justification for their compensation is simply supply and demand and a little bit of good ole boy network.
kranky
Elite Member
- Oct 9, 1999
- 21,019
- 156
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I don't think they ARE worth it in most cases. Sometimes, yes, but not as often as they would like to think. There are plenty of talented people out there who could do just as well as many of these CEOs and executives. I've been in the workforce long enough to see how chummy things get at the highest levels. I honestly believe they fully realize they aren't massively superior to the rest of the world, but they are in the club and they aren't going to blow it.
Why is it that when times are good, they claim they need to pay a lot to reward performance, but when times are bad, they claim they need to pay a lot to keep people from leaving? There are no circumstances where they ever think a cut in executive pay is justified. How does that make sense?
They hire a new CEO and pay a huge "signing bonus", guarantee a huge severance, and guarantee a huge salary and yearly bonus and stock options. He/she hasn't even worked a day! Yet other employees have to actually perform on the job before they get increases and bonuses.
It is very rare where a CEO can make or break a company IMHO. A talented staff of managers and dedicated employees can make a lot more difference than one CEO can in almost all cases.
Why is it that when times are good, they claim they need to pay a lot to reward performance, but when times are bad, they claim they need to pay a lot to keep people from leaving? There are no circumstances where they ever think a cut in executive pay is justified. How does that make sense?
They hire a new CEO and pay a huge "signing bonus", guarantee a huge severance, and guarantee a huge salary and yearly bonus and stock options. He/she hasn't even worked a day! Yet other employees have to actually perform on the job before they get increases and bonuses.
It is very rare where a CEO can make or break a company IMHO. A talented staff of managers and dedicated employees can make a lot more difference than one CEO can in almost all cases.
Gunslinger08
Lifer
- Nov 18, 2001
- 13,234
- 2
- 81
I can bring up HP's psycho CEO as a perfect example of why a mistake here or there is noted, but the outcome is always the same - you're out. The severance is there to encourage risky behavior because risk = reward. But too many mistakes and they're out, kinda like all employment.
Let the market decide and not let jealousy cloud judgment.
And to the comments about "regular employees", officers aren't regular employees nor do regular employees have the decision making power that officers do. Point blank, the reason why they are paid so well is because that's what the market for their skills and experience and past will pay them.
*chuckle*
Of course, we all do.
But the impact of their good or bad decisions impacts a lot more than the regular employee. One of the basics of compensation that the impact of your decisions/power directly impacts your compensation.
frostedflakes
Diamond Member
- Mar 1, 2005
- 7,925
- 1
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Bullshit.
Interesting how the CEO of Toyota (and most any other Japanese corporation for that matter) makes a fraction of what American CEOs do, yet his company is eating the American automakers' lunch, so to speak. Executive compensation in this country is ridiculous.
According to The New World Order they are.
Anyone who can game the system to be excessively rewarded can gain acceptance.
Anyone who can game the system to be excessively rewarded can gain acceptance.
idiotekniQues
Platinum Member
- Jan 4, 2007
- 2,572
- 0
- 76
yep, this article is a good read:
"CEO Pay Soared in 2004 as U.S. Economy Stumbled
By MARC MCDONALD
CEO pay continues to soar into the stratosphere, while wages for the average American worker stagnate.
Forbes magazine reports that the CEOs of America's 500 biggest companies received an aggregate 54 percent pay raise last year. As a group, their total compensation totaled $5.1 billion (compared with $3.3 billion in fiscal 2003).
Conservatives, no doubt, would argue that under America's free market system, these chief executives "earned" their pay. But did they?
Forbes, a publication not exactly considered to be in the progressive camp, seems to think otherwise.
The magazine says some CEOs "did so bad they should have paid their shareholders."......
........If you want to get an idea of how out-of-control soaring CEO pay has gotten, it's important to look at the CEO pay of America's automakers. To me, Detroit sums up many of the major problems that America's economy as a whole faces these days.
Detroit's CEOs have long pocketed by far the highest compensation levels of any auto executives in the world.
This shouldn't really be surprising: American CEOs in general have long raked in vastly higher pay packages than their overseas counterparts. U.S. CEOs make, on average, 22 times what their counterparts make in Japan and 17 times what their counterparts earn in Europe."
http://www.beggarscanbechooser...004-as-us-economy.html
Yeah, and japenese cultures/companies actually have a word for working yourself to death and it happens all the time. Karoshi.
do not want. Now kaizen that into your nemiwashi mudda.
No one is going to convince me that the job one person does is worth tens or hundreds of millions of dollars. I can see a CEO making a few million a year, but that's it. Now as far as stock options go, that's different, give them stock options as an incentive to have the company do well. If the company doesn't do well, their stock options aren't worth nearly as much. American CEO's are extremely overpaid, as are professional athletes. But that's how our society is now and until something is done about it, it will continue working that way, it's all politics and who you know.
frostedflakes
Diamond Member
- Mar 1, 2005
- 7,925
- 1
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So the Japanese get paid less but work harder? Not exactly helping the argument for high executive compensation spidey. That means American CEOs should be getting paid less than the Japanese (whose average compensation is about $400k/year, I believe), not more, much less 22 times more according to the article idiotekniQues posted.
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