How Is Electing CEO's To Corporations Different From Electing Government Officials? (Levin, solutions)
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It is the board of directors that decide the CEO, not the employees.
That said, the process for deciding presidential candidates would be more similar to how a CEO is elected. Yet the presidential elections would be as if the employees decided on a CEO out of candidates appointed by a board of directors.
CEOs are appointed to look after the economic interests of the shareholders not the not the workers. That is why they can get performance bonuses when laying off workers is best for the shareholders. Often there are competing candidates with different visions and solutions and the board must decide which direction to go. There can be much back room intrigue and the loser usually has to retire or leave (with a nice bonus). The 'hype" is from the media and shareholders watching but the process and decisions are all behind the closed doors of the board room.
The main difference is that a CEO has some idea of how to do the job, an elected official doesn't !
So true!
And even more important, if a CEO increases their company's debt too much, sometimes the company doesn't survive. The elected official, however, never has to worry about the taxpayers surviving.
The main difference is that a CEO has some idea of how to do the job, an elected official doesn't !
Actually it is more like CEOs know how to convince the Board of Directors that he/she knows how to do the job. As almost anyone who has worked in large companies are aware, many CEOs have no idea how to run a company, but get paid 204 times what their employees make. Think Gerald Levin, Carly Fiorina, Bob Nardelli, Johnathan Schwarz, Dennis Kozlowski, etc.
And even more important, if a CEO increases their company's debt too much, sometimes the company doesn't survive. The elected official, however, never has to worry about the taxpayers surviving.
But they have to worry about being reelected. CEOs get to walk away with a golden parachute after they drive the company into the ditch. CEOs usually are not punished for ruining the company--they are rewarded.
But they have to worry about being reelected. CEOs get to walk away with a golden parachute after they drive the company into the ditch. CEOs usually are not punished for ruining the company--they are rewarded.
After their political career is over, politicians can go into a nice position with the companies they supported.
That said, not all CEOs are the head of a rich company.
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