originally posted by: JesseVentura
Did you know that in the last three decades, a CEOs salary has grown 875% versus that of the average worker
Did you know that a "CEO" is among the most volatile job positions, with near-constant scrutiny, in all of industry?
Did you know that we're currently in a free market economy where the board of directors of companies can opt to pay a high salary to a CEO, who might
be in high demand, in order to acquire the typically very rare skill set of that CEO? If the market (companies) is willing to pay the cost (salary &
perks) for a valuable commodity (experience) why is that wrong?
Was the cost of Steve Jobs worth it for Apple? I would presume the stock holders would say yes.
Is the cost of Mark Fields worth it for Ford? I think the stock holders would say yes.
Here's a real-world example. Back in the late 1990's, my team won the advertising business for a large company working hard at a turn-around…
because they were months away from complete failure.
The board fired the entire executive staff (they deserved it), and rebuilt it, beginning
with a high-profile CEO. He was very
expensive, not just because of the experience and connections he brought to the company, but because of
involved in trying to turn around a failing former giant. But because of him
at the company's head, they were able to attract
other exceptionally experienced executives to the team… he was someone other similarly experienced people wanted to work for. They were also
But it worked.
After two years, there was a phenomenal turn-around, and eventually a return to the stock's former price. Hundreds-of-thousands of stock holders and
pension funds holding the company's stock went from fearing it was worthless, to the former glory of the stock price… not to mention everyone
working there still had their jobs.
All because the company took a huge risk on insane salaries for the CEO and the executive team.
Free market. It's a good thing.
Edit to add…
Forgot another tidbit about the company mentioned above. A few years later, after I left advertising, the company was acquired for more than their
market cap, by a much bigger company, giving stock holders a huge payday. No one was laid off as there was no overlap with the acquiring company. Part
of the reason for the acquisition was… you guessed it… the quality of the executive team.
edit on 14-11-2014 by SkepticOverlord because:
(no reason given)