Quote:
Originally Posted by loquitur
Pan, how do you feel about baseball players making huge salaries? Movie stars?
You don't see that the market for different kinds of talent works more or less the same, and that really good CEOs (or those who are expected to be really good CEOs) get huge compensation? If you pay a ballplayer a big hump of money and he has a bad year, or you pay an actress a huge payday for what turns out to be a flop, what do you think should be done about it? What is done about it is that they keep the payday and then they are tainted goods for the next job they try to get - which is approximately what happens to CEOs who don't deliver. They get fired and then have some problems getting a comparable job next time around.
Why is this such a mystery? Why are people so hung up on the fact that some people make a lot of money?
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What bothers me is that I'm very often seeing articles and studies that show that CEO compensation is at a much higher level than it has ever been before, and that CEO compensation is rising at a rate far higher than 'normal people'. I don't think it's a healthy system. And especially concerning is that rising corporate profits don't seem to have any effect on worker salary. Also that CEO's actual performance (in terms of corporate profits) don't seem to have any relationship to their compensation - we've all heard of the 'golden parachute', where even if a CEO is kicked out for utter incompetence he or she gets lavishly compensated.
For instance:
Executive Pay: CEO Pay Up 298%, Average Worker's? 4.3% (1995-2005)
So, if that article is correct, since 1990, corporate profits have doubled, CEO pay is up about 300%, and the average worker is making...4.3% more.
Why?