Now it's either this folk deserve their huge paycheck or they don't, and to be sincere I don't know which of the above option is right or if they even apply in this scenario.
On why I'm not sure if they deserve it or not, well they do make their individual companies run (make the though decisions) on one hand and on the other hand they are earning an average of 140x their average worker's salary ( go CAPITALISM).
So there it goes, which do you guys think is true.
As much as people like to complain about this, there's a very important reason why CEOs get paid so much - it's because the CEO (and other decision makers) need incentive packages that significantly outweigh their other assets so that the only thing they care about financially is how to make the company more money.
That, combined with the fact that people qualified to become CEOs generally have high assets, means you have to pay them exorbitant incentive packages. Otherwise the owners are at risk of having their executives wanting to spend their time on things that are financially more important to them.
So, for example, suppose you find someone near the top of the company who seems to be qualified to become CEO. If their net worth is already $50 million (well-diversified), imagine what you have to do to get them to focus entirely on your company?
Interesting point. So what does this suggest about some of the highest paid CEO's being in industries with business models that are already quite stressed, like cable tv? And how did they get their assets in the first place?
5 comments
[ 4.2 ms ] story [ 13.1 ms ] threadThat, combined with the fact that people qualified to become CEOs generally have high assets, means you have to pay them exorbitant incentive packages. Otherwise the owners are at risk of having their executives wanting to spend their time on things that are financially more important to them.
So, for example, suppose you find someone near the top of the company who seems to be qualified to become CEO. If their net worth is already $50 million (well-diversified), imagine what you have to do to get them to focus entirely on your company?