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by tententwenty
5406 days ago
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In companies with stock exchange listings one thing that he likely does is to sit on the remuneration committees for other CEOs. Who better to judge another CEO's worth you might think. However as the criteria used to set pay include the level of remuneration of other CEOs it has led to a situation where CEOs as a group set their own pay. Unsurprisingly the remuneration of CEOs and other executives has risen far faster than for employees as a whole.
You'd think shareholders would object to this, but major shareholders in public listed companies tend to be entities such as pension funds who in turn have CEOs (you get the picture) |
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I think it's more that the amount a CEO makes is insignificant compared to the company's other costs. Supposedly GE has 304,000 employees worldwide. If the shareholders decided to pay the CEO $10m less they could afford to give every other employee an extra $0.63 a week. Whoopie.
And yet the CEO can mean billions of dollars made or lost depending on the quality of his decision making. As a shareholder if you think you're actually getting your money's worth you're not going to quibble over ten or twenty million for the chief executive when the company's market cap is over a hundred billion dollars.
Do the shareholders get their money's worth? I don't think there's any possibility you could answer this question objectively.