So you would suggest that total compensation is a more important factor than value?
Don't assume that I'm suggesting that all CEOs are paid accordingly. There are probably many who are overpaid and by quite a bit. But what about those all-star CEOs who are captaining companies making record profits? What about those CEOs who are providing so much value that the boards of directors under pressure from key shareholders are pushing more money onto the all-star CEOs to ensure they're retained instead of hired away from competitors or even companies in unrelated industries?
Also, salary caps merely mask the reflection of CEO value from a market prospective. Without caps, much of what we see regarding salaries is a reflection of value, and probably not much of a reflection of corruption or anything. Like I suggested, you will likely see similar compensation/profit ratios among smaller companies with CEOs making less than $100,000.
We could also look at the professional athlete as a comparison. The top athletes provide value in terms of helping win games and selling tickets. Salary caps amongst teams merely mask the true market value of the top players. But what this does is make it easier for teams with less money to compete for talent. Is that what happens with CEOs in places like Japan and Germany?
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Knowing that death is certain and that the time of death is uncertain, what's the most important thing?
—Bhikkhuni Pema Chödrön
Humankind cannot bear very much reality.
—From "Burnt Norton," Four Quartets (1936), T. S. Eliot
Last edited by Baraka_Guru; 06-29-2011 at 12:27 PM..
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