There has been significant discussion about CEO's and their salaries so I wanted to weigh in on this and put my thoughts onto proverbial paper
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Don't look at it as "education, responsibility and hours invested." Look at it as supply and demand; that's the basic tenet of the free market, not effort or education or work ethic. The free market is not equal to a meritocracy
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Some very good points, I thank you for your eloquent reply to my ramblings.
How much guidance/assistance the CEO really provides is a solid question. I assume you have read some Scott Adams who has some interesting perspective into CEO's.
I think the only real issue with CEO compensation is something you touched on.
No CEO faces the consequences of failure the way other people do.
I fail at my job, I lose it. NHL player fails, they get traded or sent down to the minors. A CEO fails, they often linger until shareholders and the board stage a revolt and oust said CEO. After which point, the CEO gets another lucrative position at another company. In some cases, they destroy the company then find a new one to run.
My favourite example of this is the ex CEO of Home Depot who has made a successful career out of spectacular failure.
NHL player fails, they get traded or sent down to the minors. A CEO fails, they often linger until shareholders and the board stage a revolt and oust said CEO. After which point, the CEO gets another lucrative position at another company.
I was thinking of that exact thing on the way to work this morning.
Hockey players make too much money.. that's ridiculous..
okay.. sports in general though.
WPG lost it's hockey team OVER money... it's been depressing for hard-core hockey fans in Winnipeg... it's ridiculous to think that if people just accepted less money... we could pay less for games.. and keep teams in their hometowns. It's a game isn't it?.. for fun?.. f*ck it.. I hate this topic so much.
Therefore... the original argument about CEO's making too much money is now brought down farther. Sports people should make at the most a few hundred thousand a year... and CEO's should remain under a million.. maybe a few million in some exceptional circumstances.
The fact that ANYONE makes over 50 million/year in personal income is ridiculous.
It makes you wonder about an absolute threshold for salaries....I think a million a year seems pretty reasonable.
Athletes do draw in millions of dollars in revenue and also put their health and body on the line so I don't mind them being compensated well..a million even....
I have heard that professional athletes need to score big deals early in their career as their bodies get worn out by the sport within 10 years or so. They need to stockpile the money to support themselves after they can no longer play. I'm not saying this in any way justifies the outrages paycheques, but it does make some sense from their perspective. A hockey player can only be at the top of his game for so long, while a CEO can run a company until he's 70.
I think part of the problem with the large salaries that CEOs get is that in many cases, they're essentially being paid to sacrifice their own values in order increase profit for their company. Perhaps if they weren't paid so much, CEOs wouldn't be so easily persuaded to act in ways that harm many of the company's stakeholders, like its employees, customers, and society in general.
A big part of why CEOs get paid so much is that going to the office to run a company is a boring pain in the ass.
David Halberstam once gave a commencement speech where he asked the graduating class to consider that the most successful students had been offered jobs as consultants. The jobs carried large salaries because the position of "consultant" was not one to which a twenty-year-old would normally aspire unless he were bribed - there was nothing instrinsically interesting in such a job, so it HAD to be attended by a large paycheck. It was not the sort of thing that a young, energetic person would occupy herself with unless bribed.
So CEOs do what the rest of us can't really be arsed to do. I don't know if that justifies their salaries or not. I think if we kept their salaries down, it would weed out all the hacks who only want to make money and leave behind the brilliant ones who are driven by the need to innovate, to face challenges and who derive enjoyment from the work itself, not from the paycheck. These people exist.
I think a lot of companies believe that by offering large salaries they will attract "the best". Really I think they just end up attracting the most greedy.
there is some irony here as CEO's used to make less...but then a law was passed to make CEO's salaries transparent...and the opposite happened where all their salaries sky rocketed to catchup with a few exceptions.
Have you read that book by John Ralston Saul that talks a bit about social structure and people who make money for "nonproductive" work? It's a tough read (for me), I've never made it through, but it might have some things you find interesting in it. I think it's called Unconscious Civilizations. Lots of controversial stuff, and lots of logic.
Though he quotes Adams (and others), so maybe you've gone closer to the sources of his ideas anyway if you've read all that.
The answer you liked above is very good, but it excludes morality from the market, which seemed to be the theme of your post - should the market be moral?
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How much guidance/assistance the CEO really provides is a solid question. I assume you have read some Scott Adams who has some interesting perspective into CEO's.
Reply
No CEO faces the consequences of failure the way other people do.
I fail at my job, I lose it. NHL player fails, they get traded or sent down to the minors. A CEO fails, they often linger until shareholders and the board stage a revolt and oust said CEO. After which point, the CEO gets another lucrative position at another company. In some cases, they destroy the company then find a new one to run.
My favourite example of this is the ex CEO of Home Depot who has made a successful career out of spectacular failure.
Reply
I was thinking of that exact thing on the way to work this morning.
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okay.. sports in general though.
WPG lost it's hockey team OVER money... it's been depressing for hard-core hockey fans in Winnipeg... it's ridiculous to think that if people just accepted less money... we could pay less for games.. and keep teams in their hometowns. It's a game isn't it?.. for fun?.. f*ck it.. I hate this topic so much.
Therefore... the original argument about CEO's making too much money is now brought down farther. Sports people should make at the most a few hundred thousand a year... and CEO's should remain under a million.. maybe a few million in some exceptional circumstances.
The fact that ANYONE makes over 50 million/year in personal income is ridiculous.
Reply
Athletes do draw in millions of dollars in revenue and also put their health and body on the line so I don't mind them being compensated well..a million even....
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David Halberstam once gave a commencement speech where he asked the graduating class to consider that the most successful students had been offered jobs as consultants. The jobs carried large salaries because the position of "consultant" was not one to which a twenty-year-old would normally aspire unless he were bribed - there was nothing instrinsically interesting in such a job, so it HAD to be attended by a large paycheck. It was not the sort of thing that a young, energetic person would occupy herself with unless bribed.
So CEOs do what the rest of us can't really be arsed to do. I don't know if that justifies their salaries or not. I think if we kept their salaries down, it would weed out all the hacks who only want to make money and leave behind the brilliant ones who are driven by the need to innovate, to face challenges and who derive enjoyment from the work itself, not from the paycheck. These people exist.
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The answer you liked above is very good, but it excludes morality from the market, which seemed to be the theme of your post - should the market be moral?
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