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Originally Posted by aceventura3
Pretty interesting. Some how I get the feeling that there is a view that a CEO or executive can not be worth the money they get paid. In sports, if you have a star performer it is easy to see how and why they can demand the highest compensation, but the same is true in business. There is also a risk. In some cases a corporation might pay too much for a person that under achieves. If this is the case, I suggest that we let the market punish the corporation for the mistake.
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If a corporation of, say, 50,000 employees decides to give their CEO $10,000,000/year (and by this, I mean the Board of Directors decides), and that CEO fails, you suggest that the market should punish the corporation for the mistake. Isn't the end result of such "punishment" a round of low-level employee layoffs and a comfy severance package for the outgoing CEO? In other words, why support a system that punishes the lower level workers for the mistakes of the executives?