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It's cheaper these days for CEOs to take $1 salaries and get stock options. Less of a tax bill.
And as I pointed out earlier, most of these CEOs don't have overly large salaries. Most make in the 1-2 million a year range. Now their total compensation (bonus and stock) is in the 10-20 million dollar range.
And as I pointed out earlier, most of these CEOs don't have overly large salaries. Most make in the 1-2 million a year range. Now their total compensation (bonus and stock) is in the 10-20 million dollar range.
That is a good point to make too! A lot of a CEO's pay is in stock options or stocks granted. The price is dependent on how good the company does. So really, its in a CEO's best interest to do well or else they will take a LARGE hit financially. If you ever read Forbes you will see that a majority of CEO's lose multi millions of dollars or gain multi millions of dollars from month to month. All of that rides on their share value.
On that same note. That form of compensation isn't liquid either. If they ever decide they don't want it, they can't just sell off in full. A major sell off like that would crash the stock and cause people to run on the stock. So a majority of the time the CEO's stock values aren't even realized until well after they have retired.
That is a good point to make too! A lot of a CEO's pay is in stock options or stocks granted. The price is dependent on how good the company does. So really, its in a CEO's best interest to do well or else they will take a LARGE hit financially. If you ever read Forbes you will see that a majority of CEO's lose multi millions of dollars or gain multi millions of dollars from month to month. All of that rides on their share value.
On that same note. That form of compensation isn't liquid either. If they ever decide they don't want it, they can't just sell off in full. A major sell off like that would crash the stock and cause people to run on the stock. So a majority of the time the CEO's stock values aren't even realized until well after they have retired.
This is the concept that the populist crowd don't seem to understand. All they do is look at the bottom line number. But when a CEO makes the bulk of his compensation is stock options then it is the ultimate in merit-based pay. If the company does well under his leadership, then he makes a mint. If it doesn't, he doesn't either.
And that's the way it should be. Personally, any CEO worth his salt would want to be compensated that way. Heck, when I owned my company, the large majority of my compensation was in year-end dividends based on net profit. On the other hand, my salary wasn't that much more than the best-compensated employee.
I think the entire problem with this thread is that cubicle dwellers really resent others who make a lot of money. They never look at their own impact on the top line or the bottom line. They never take a cold, hard look at their own strategic importance. They only make a token effort at increasing productivity, learning new skills, and whatever else. Then they get mad at the people who steadily invest in those same abilities day after day after day.
At one of my clients, there was widespread resentment against a killer sales representative who closed some huge deals. As a result, the salesman was making more than anyone in the executive suite. A new CEO came on board and guess what he did? He changed the sale compensation arrangement to SALARY ONLY, not commission, never mind that the guy was only making commission on what he was actually bringing in the door. The sales guy was out the door in a matter of hours and went to a competitor. Guess what? Within a few months, the company was losing biz to that competitor.
Absolutely. No one is worth 300x's an average employee, it's humanly impossible to do that much more work. How many companies go into the toilet, yet the CEOs continue to get paid insanely high wages or bonus packages or get golden parachutes before the company tanks.
Absolutely. No one is worth 300x's an average employee, it's humanly impossible to do that much more work. How many companies go into the toilet, yet the CEOs continue to get paid insanely high wages or bonus packages or get golden parachutes before the company tanks.
A very small amount. So few that it's insignificant.
Absolutely. No one is worth 300x's an average employee, it's humanly impossible to do that much more work. How many companies go into the toilet, yet the CEOs continue to get paid insanely high wages or bonus packages or get golden parachutes before the company tanks.
Actually they are. A CEO's measure is not units of "work" (or more acurately, time) which is basically all that most employees have to offer. Their worth has to do with strategic thinking and execution that positions a company to perform more competitively and hence, be worth more to the shareholders.
Are Cheif Execuative Officers overpaid? They get billions of dollars each year and all they do is sit around. Employees get 7.50 an hour and work 8 hours a day. Are CEOs overpaid?
Heh, the "all they do is sit around" comment is completely off base. These people's lives completely revolve around work. Their jobs are so all consuming they don't even get to raise their own kids.
Actually they are. A CEO's measure is not units of "work" (or more acurately, time) which is basically all that most employees have to offer. Their worth has to do with strategic thinking and execution that positions a company to perform more competitively and hence, be worth more to the shareholders.
Absolutely true. A few years ago, I was called into to be a placeholder executive for a company where the president had to retire early due to serious health issues while the son was being trained to take his place. It was a nice one-year gig where they needed a guy with gravitas to come in, calm some skittish customers, and keep things moving forward.
I started on the first biz day in January. The first thing I did after introducing myself to the staff of fifty was to look at the balance sheet and income statement. Literally in the first 15 minutes, I noticed that they weren't marking things up correctly. I pulled out the calculator, started tapping in numbers, and realized that they were leaving about $200,000 on the table every year. I fired the controller and brought in someone who knew what she was doing. All told, I found $500,000 in just lost money because of this idiot. But my first fifteen minutes paid a significant part of my fees for the year. That's the kind of thinking that the average wage earner doesn't really think about.
A very small amount. So few that it's insignificant.
This was a common business plan in the 80's and 90's. There were individuals at Enron who ran the company into the ground and they walked away with $100mil+ each. Thousands of pensions from actual productive employees were depleted in the process. Nothing insignificant about it.
When CEO's averaged 40x the pay of their lowest paid employee, this country thrived. Now, they're not satisfied making 400x and the US is sinking like a stone. There most certainly is a correlation.
Bill Gates, Warren Buffet, Oprah, Mark Cuban, Ted Turner, and Steven Spielberg are all exceptions. They're billionaires who make more than 400x their lowest paid employees but they're also known to be the most generous people on the planet.
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