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mcgeedo · 10-07-2008, 09:43 AM

It seems to be a common theme in this forum(admittedly largely Liberal) that people who make a lot of money, e.g. CEOs and others in executive positions, don't deserve it. They are inherently evil and live off the labors of "real" people. They should make less money and pay more taxes, and they certainly don't deserve any respect.

I happen to agree that those who cause a company to do poorly or fail should NOT reap huge rewards for their (failed) efforts. But for those who do well, and increase their shareholders' value (shares that may be in your 401(k)), and who create jobs and contribute to this country's economy, I feel that they do deserve a reward for their efforts.

Executive compensation is most often determined by a compensation board working for the company's Board of Directors. These folks decide, for example, that a talented CEO will likely increase the annual profit of a company by much more than what they pay said executive. It's a fairly simple business decision. They are not in the business of giving away a company's money without expecting something in return. Again, their judgement is sometimes faulty, and they make a deal with what turns out to be a loser, but in the majority of cases, the person they choose and pay well usually comes through with business decisions and plans that are profitable.

If this wasn't the case, they wouldn't do it. It's all about profit and if this paradigm wasn't profitable, it would become extinct.

So, the discussion point: Is it inherently evil to pay large amounts of money to someone who will, through their efforts (mainly decisions and plans) return the favor to the company? Do you see a better way to run companies without paying large sums to attract the best business talent as leadership? If your idea is better, why aren't companies adopting your ideas right and left?

Keep in mind, as you respond, that CEOs aren't onipotent. They work for the Board, and ultimately for the shareholders. They can be, and often are fired if they don't make the company more profitable.

A little thought experiment: If someone came to you and said "You are more knowledgeable about ______ than anyone I know and you have a history of succeeding at whatever you do. Would you run our company for $10 million/year?" Would you take it, or would you turn it down rather than join the ranks of _______ (whatever your personal politics and beliefs are of such a person?

10-07-2008, 09:43 AM	#1 (permalink)
mcgeedo Crazy	Why do executives make so much money? It seems to be a common theme in this forum(admittedly largely Liberal) that people who make a lot of money, e.g. CEOs and others in executive positions, don't deserve it. They are inherently evil and live off the labors of "real" people. They should make less money and pay more taxes, and they certainly don't deserve any respect. I happen to agree that those who cause a company to do poorly or fail should NOT reap huge rewards for their (failed) efforts. But for those who do well, and increase their shareholders' value (shares that may be in your 401(k)), and who create jobs and contribute to this country's economy, I feel that they do deserve a reward for their efforts. Executive compensation is most often determined by a compensation board working for the company's Board of Directors. These folks decide, for example, that a talented CEO will likely increase the annual profit of a company by much more than what they pay said executive. It's a fairly simple business decision. They are not in the business of giving away a company's money without expecting something in return. Again, their judgement is sometimes faulty, and they make a deal with what turns out to be a loser, but in the majority of cases, the person they choose and pay well usually comes through with business decisions and plans that are profitable. If this wasn't the case, they wouldn't do it. It's all about profit and if this paradigm wasn't profitable, it would become extinct. So, the discussion point: Is it inherently evil to pay large amounts of money to someone who will, through their efforts (mainly decisions and plans) return the favor to the company? Do you see a better way to run companies without paying large sums to attract the best business talent as leadership? If your idea is better, why aren't companies adopting your ideas right and left? Keep in mind, as you respond, that CEOs aren't onipotent. They work for the Board, and ultimately for the shareholders. They can be, and often are fired if they don't make the company more profitable. A little thought experiment: If someone came to you and said "You are more knowledgeable about ______ than anyone I know and you have a history of succeeding at whatever you do. Would you run our company for $10 million/year?" Would you take it, or would you turn it down rather than join the ranks of _______ (whatever your personal politics and beliefs are of such a person?