Worst Tech CEOs Earn the Most Money 313
tappytibbins writes to tell us Baseline is reporting that in a recent look at the 100 largest tech companies they found that there was a striking correlation between the highest paid CEOs and the lowest returns. From the article: "The one-third highest performing companies paid their chief executives an average of $7.12 million--while the bottom third paid their CEOs $9.29 million. The study compared direct compensation, which includes base salary, bonus and value of stock grants. Why the disconnect? Jack Dolmat-Connell, founder and president of the firm, cites the phenomenon of 'chasing the median': Companies benchmark their executive compensation figures on peers instead of looking at factors related to performance."
In pursuit of excellence? (Score:5, Interesting)
Why the disconnect? Jack Dolmat-Connell, founder and president of the firm, cites the phenomenon of 'chasing the median': Companies benchmark their executive compensation figures on peers instead of looking at factors related to performance.
How about the former CIO where I worked? You could swear his primary motivation was to get himself more money, however he did it, by making his performance look good, the long-term problem is determining if that appearance of 'good performance' really was as good as it looked on paper and how it enabled the business the grow or trim costs effectively.
"If I make all those guys putting in 16 hour days wear suits and ties, we'll look more professional and I'll get compliments on what a tight ship I run! That should get me $100,000 more per year."
Modify the numbers (Score:3, Insightful)
Since none of the management ever checked the chart, they didn't realize the real numbers were lower than the last guy. Since they didn't check the numbers, they gave him a huge raise.
Nice.
Re:Modify the numbers (Score:2, Interesting)
We had a guy who took a job, changed the numbers on a report to show his predecessor sucked, and then faked his numbers to look good.
Yeah, Lies, damn lies and statistics. Without oversight it's amazing what you can make metrics say. Don't like what one measure says? Come up with one that does!
"Hmm. The department costs too much in overtime, but we can't cut it or work won't get done and people will notice more problems since I took over. I know I'll show how much in Fringe Benefits we are saving b
"nice" (Score:2, Funny)
Re:Modify the numbers (Score:5, Insightful)
Stock Holders!!!!! Listen up you should try being a capitalist insted of watching all the silly nonsense. Capitalism means you get paid. Check out those dividend checks. If they are not there you probably bought a pig in a poke. Quit paying attention to annual report con games and start looking at the most basic axiom of capitalist reality. Capital gets paid!
A few convenient signs that capitalists should look for. If a company is outsourcing its product, the management has decided for reasons that may or may not be obvious to investors, that the company is obsolete and is no longer functional. You are going out of business and dividends will not be coming your way any time soon. If your CEO has given himself a raise and fired your employees you know this is a fact.
Another sign is pretty simple. Check the turns of your busines. Walmart for example and it is one of the better US examples, it turns its inventory about 90 to 100 times a year. That is for a retailer very fantastic. They have conned the towns into building their stores under Industrial Development Bonds so they don't even own the stores. Their inventory is largely consignment or on 60 day payment terms. This means they are turning an inventory with at least 5% per turn net income 90 times a year (Net income per year is now 90 Times 5 = 450% per year on gross value) Since they don't even own the gross value the calculation fails to go high enough. It means in plain terms they should be paying dividends well in excess of 500% a year. If you were a capitalist, you would wake up to this and demand your check or fire the CEO. Failure to demand your dividend check is to see the CEO steal your income as his paycheck.
For those idiots in the moderation group who don't see that this is capitalism, I suggest you get a dictionary and forget your mod points. It is time for capitalism to return and Faschism to go away.
Re:Modify the numbers (Score:3, Insightful)
Re:Modify the numbers (Score:3, Insightful)
Problem with pay-for-performance (Score:5, Insightful)
Re:Problem with pay-for-performance (Score:5, Insightful)
Re:Problem with pay-for-performance (Score:5, Funny)
Comment removed (Score:4, Insightful)
Re:Problem with pay-for-performance (Score:3, Interesting)
Good point - and I've got the obvious example. Some years back I did a few months work at a steel mill which measured performance in tonnes of steel per employee. The manager did the obvious dirty trick and employed contractors at a higher rate so there would be less company employees on site and the numbers would look better.
Re:Problem with pay-for-performance (Score:3, Insightful)
I'd call it "Money is the solution to everything -- including cluelessness."
We all know politicians do this, but it's common enough in business too.
Supposing you're on the board of a company. You don't really understand what the company does or needs to do. You don't understand the business well enough to know whether that bright, affordable, but rather dull candidate knows what he's talking about. But Mr. S
A big misunderstanding of why CEOs get paid (Score:5, Insightful)
Performance has little to do with it.
Re:A big misunderstanding of why CEOs get paid (Score:3, Insightful)
CIO's have a short lifespan at a company (Score:3, Informative)
Hire me! I can save you $5,000,000 (Score:5, Interesting)
I am sure that together we can make just as good of decisions as your precious CEO.
Actually, I think the problem here is the Lake Wobegon Effect - no company is will to admit that it would dare hire a below average CEO. Therefore, of course theirs deserves pay greater than the average...
Re:In pursuit of excellence? (Score:3, Funny)
Re:In pursuit of excellence? (Score:2)
Wow. Don't know much about radio, do you? I think these days, they can only get illegal immigrants to take morning DJ jobs, which might be why the quality seems to be improving.
Re:In pursuit of excellence? (Score:2)
Step 1. Leave conscience at the door.
Done, and done!
Now, what's step 2?
Re:In pursuit of excellence? (Score:2)
Anyone remember Ashton-Tate and Wordstar? (Score:2)
Re:Anyone remember Ashton-Tate and Wordstar? (Score:4, Informative)
Their CEOs made a lot of money while their companies went down the drain.
Ashton-Tate when down the toilet because Dbase 4 was a pile of crap and all they put their money into was suing their competition.
Re:Anyone remember Ashton-Tate and Wordstar? (Score:5, Funny)
Re:Anyone remember Ashton-Tate and Wordstar? (Score:5, Funny)
Re:Anyone remember Ashton-Tate and Wordstar? (Score:3, Interesting)
Sort of true, but not the complete picture. dBase IV was indeed the quality showpiece you describe (funny how yesterday's gods become today's devils) but more to the point the code was acquired by -- you guessed it -- Microsoft, who turned it into everyone's favorite mockery of a database, MS Access. When you can't compete, sue to cover your failures -- SCO didn't invent the technique.
Look up the story of Tom Rettig some time, one of the main
Re:Anyone remember Ashton-Tate and Wordstar? (Score:3, Informative)
Microsoft acquired Fox,
and Access was out well before MS bought Fox.
Re:Anyone remember Ashton-Tate and Wordstar? (Score:2)
Or... (Score:5, Insightful)
Or those companies whose management is there for love of the business tend to do better.
Or a company desperately in need of help is likely to dump huge sums of money on acquiring the most expensive CEO they can, in the hope of a turnaround.
Re:Or... (Score:5, Insightful)
This would be my first guess. Companies dumping money on CEOs may work in businesses where CEOs are rock stars, but in the tech industry it makes sense that a CEO would not be of much help if they don't have a solid technological base. It's not like other industries where good CEO-sense can take you a long way. If a tech CEO doesn't have people underneath that can tell him what the problem is, he isn't likely going to be able to figure it out intuitively.
Re:Or... (Score:4, Interesting)
Aside from corruption from having special friends in the government, there is little evidence that good "CEO-sense" (whatever that means) has much to do with success. In fact, the only way we have of evaluating good "CEO-sense" is by looking backwards, which makes every CEO lucky enough to inherit a good market position "good" by tautology.
But as a predictor, as they always say in the buz, "past performance is not a guide to future performance".
Re:Or... (Score:3, Insightful)
True. Remember Carly?
Re:Or... (Score:3, Funny)
Trying to forget.
Re:Or... (Score:5, Interesting)
My S.O. _is_ an executive recruiter, and I know this happens.
Re:Or... (Score:5, Insightful)
Of course, I'll go to my grave not understanding why someone who makes more in a year than my whole family will see in my lifetime gives a shit about his resume. Isn't there such thing as "enough"? Give me a $7M golden parachute and I'll spend the rest of my days snorting coke out of supermodels' cleavage on my private island, wiping my ass with however many copies of my resume I still have around.
Seriously, it's disgusting that someone who's basically holding the wheel of a sinking ship gets paid that much. I'm pretty sure I could drive the final nails into a dying company's coffin with the skills and training I have now. I could also plow a stock car into Turn 1 at Daytona. Where's my seven mil?
Re:Or... (Score:4, Insightful)
Hell, some of them repeatedly run ventures into bankruptcy and are still able to secure financing for their next abomination. Donald Trump comes to mind in this regard.
Re: (Score:3, Funny)
Re:Or... (Score:3, Informative)
If you invest it with a 10% return, and taxes only take a third of that, you'll make less than half a million a year. Certainly enough for comfortable living, definitely enough for a bigger house and a second car and not having to work anymore. Definitely not enough for supermodels, coke, yachts or private islands.
Re:Or... (Score:3, Insightful)
Destroying his local economy...
Re:Or... (Score:3, Insightful)
A poorly performing company with little future will only be able to hire and retain top management by throwing money at them. No savvy CxO wants a sunk ship on his resume.
So why not go into the trenches and grab someone normal who has company spirit, a good track record in business results and not gamble on a professional self centered CEO that is so full of BS. People near the bottom are used to getting results and not having to BS it up. If you grabbed a senior underpaid tech that invests in the stock
Re:Or... (Score:5, Interesting)
I think that the "study" basically says that bigger companies pay their CEOs more, which is not exactly insightful. IBM pays their CEO more than Adobe's? Really?
To get real data, they should have taken the top hundred companies from *last* year and seen how they did this year. They also might want to consider doing something like dividing CEO salary by last year's revenues. That would better control for the differences in size between companies like IBM and Adobe.
IBM: $12 million salary out of $96 billion revenue = 1/8000
Adobe: $1.9 million salary out of $1.9 billion revenue = 1/1000
Note: revenue numbers may not be from last year; too lazy to find details in google links.
It looks like Chizen is actually paid better per dollar of revenue than Palmisano is.
P2P Compensation. (Score:2, Interesting)
Isn't that how most pay is determined? By what others are paid in your profession/industry?
this is not completely new (Score:5, Interesting)
Re:this is not completely new (Score:5, Informative)
He has written a follow-up book titled "From Good to Great" which does another analysis concerning what it takes for a company to really elevate itself above its competitors. This book was written as a prequel to "Built to Last". It also highlights the same ideals, in that money is not necessarily THE PRIMARY motivator in a company that can become very successful. Successful being that its stock price displays gains of more than 3.2 points above the market consistantly across 15 years.
correlation vs. causality (Score:4, Insightful)
not a conclusive study (Score:3, Insightful)
I'd like to see executive compensation tracked across executives (not companies!) over time in a fixed-effects regression. Then we would know conclusively whether CEOs were being rewarded for poor performance or not, and it would be as easy to do as the cited study.
My tech company.. (Score:5, Funny)
Re:My tech company.. (Score:5, Funny)
Comment removed (Score:5, Insightful)
um, what risk? (Score:3, Insightful)
Re:um, what risk? (Score:2)
Re:um, what risk? (Score:5, Insightful)
Suppose Kenneth Lay faked his death - even with the money they lawyers will squeeze back from his estate, he'll never have to work again and can live rather well anyplace on earth, because he almost assuredly has some packed away somewhere safe.
Meanwhile, the thousands of people he screwed out of jobs and pensions plans while playing funny money games may have to take jobs at Walmart to keep from eating cat food in their "retirement" - or, if Social Security is privatized, becoming homeless due to yet more Ken Lays robbing the private funds set up in its place.
A lawyer I know who has represented white collar criminals confirms that many of them truly think "if I do five years in jail and come out set for life, good for me." Meanwhile, minor pot dealers fill our prisons for a "crime" that hurts no one.
Excuse me for thinking it's time to bring back the guillotine and right the scales of justice.
Re:um, what risk? (Score:3, Insightful)
If he is on a beach somewhere enjoying his money, I do hope his conscience won't let him. Unfortunately, I doubt he has one. Jails are for people like that. Or public floggings when he is f
Re:um, what risk? (Score:2)
Re:um, what risk? (Score:3, Insightful)
If you want to compare someone with 7 million dollars to someone who makes 40k a year, then why not compare the 40k/yr joe sixpack with an average Somolian.
The GNP per capita of Somolia is about $600 (compared to $41800 in the US). This means that this 40k/yr American probably makes more in one year than a Somolian does his entire life. Very similar to the difference between a CEO and lower middle class A
Re:um, what risk? (Score:4, Insightful)
But then, you know all about hanging around under a bridge, don't you...
Re:um, what risk? (Score:4, Insightful)
Just because they are rich doesnt mean that they dont take risks. If they have moved up to a point where they are able to take such a job (whether it is from their own merits or their family/friends), then they probably live a much richer lifestyle than your average American. To them, making $200,000 a year would not be very much money. That may seam strange to most people, but that is the world they live in. If they take a job at a company that could fail, they could be hurting their future earnings by millions of dollars.
Use the USA as an example. We have a GNP of about $12 trillion. If the President and Congress made decisions over 4 years that dropped the GNP to $4 trillion, that would be a disaster for the American public. No one would say that our government does not take risks with our population. But even if this happened, our GNP per capita would still be more than 70% of the other countries in this world.
People on slashdot would be complaining if President Bush screwed up and cut our GNP in half. But by your logic they would have nothing to compain about, because we would still be a very wealthy country.
Just because someone is more rich than you are doesnt mean that they do not take risks.
--
Anti-business bias (Score:5, Interesting)
So there are a couple of valid interpretations of this data, and the article (wisely, probably) makes no attempt to jump from correltation to causation. Too bad so many people -- even slashdotters -- have such a hard time resisting the instinct to see the two as being the same.
Unfortunately, I don't think this is a coincidence. There's no way Slashdotters would have so grossly misinterpreted a study correlating, say, video games and violence -- because the party line around here is that video games are a Good Thing. A lot of geeks, however, have complete disdain for the "suits" and "pointy haired bosses" in management. "Why do the 'clueless' managers make so much money, when I'm obviously so much smarter? Why do I have less job security when I'm the one working 100 hour weeks, fueled by Mountain Dew and fear of downsizing?" It's true that there are bad managers out there, but much of this attitude is just scapegoating for one's own job dissatisfaction
It also shows a profound misunderstanding of business. To the disgruntled coder, it may seem like the business world is stupid and arbitrary -- where people make more money the "dumber" they are -- because they don't understand it. But really, it's little different than if the CEO said: "I don't understand your C++ code; it just looks like a bunch of random characters you threw together. Therefore, it's stupid." Like it or not, there is such a thing as skill in business -- and oftentimes, it's rarer and less replaceable than technical skill. Just take a look at the career of Steve Wozniak, with and without Steve Jobs. Now look at the career of Steve Jobs, with and without Steve Wozniak.
Cheers,
IT
Re:Anti-business bias (Score:3, Interesting)
These are legitimate questions, and you sneer at the people asking them without providing any real answer.
But really, it's little different than if the CEO said: "I don't understand your C++ code; it just looks like a bunch of random characters you threw together. Therefore, it's stupid."
Whether the per
Two letters.... (Score:2, Insightful)
I wonder where Carly was on that list.
Best CEOs Earn the Least Money (Score:5, Interesting)
Re:Best CEOs Earn the Least Money (Score:2)
Re:Best CEOs Earn the Least Money (Score:5, Interesting)
and let me clarify, it doesn't require greed to want to get compensated for your money, time, and the value you add. He led apple through an amazing turn around and was at the helm during 4 major occurances: the Ipod, switch to Unix OS, Intel Chips, and streamlining of computer production. But I'd bet he feels he has well earned those gifts just as much as he would probably ask for a very hefty salary for his incredible performance.
Re:Best CEOs Earn the Least Money (Score:2)
Celebrity executives are not the best executives (Score:3, Interesting)
Re:Celebrity executives are not the best executive (Score:2)
Granted, I've never heard much about the genius of the management team at the other companies. But I do step to the defense of Enron when it was a legitimate business. And oddly enough, Ken Lay supposedly had
There's a Problem Here (Score:5, Insightful)
There is a problem with this study: it measures shareholder return as a percentage, but compensation as a dollar value. If a CEO grows a $10B company by 1%, he generates $100M for shareholders. If a CEO grows a $100M company by 10%, he generates only $10M for shareholders. The study implies that the second CEO deserves to be paid more, because his company had a larger percentage return. But one could certainly make a good argument that the first CEO deserves to be paid more, because he generated a larger absolute return to shareholders.
In fact, given the general trend that smaller companies tend to grow faster than large onces, you would expect the data to look like this even if there is no intrinsic correlation between CEO pay and corporate performance.
I don't write this because I believe that the market for CEO pay works. I write this only because this particular study doesn't prove that the market for CEO pay doesn't work.
Re:There's a Problem Here (Score:2)
I think that's a big part of it, and doing the analysis in a boom year like 2005 compounds your point.
Re:There's a Problem Here (Score:2)
1) All $10,000 in one bank account that pays $100 interest at the end of the year.
2) Put $100 into 100 bank accounts that each pay $50 interest at the end of each year.
Although the absolute return of option 1 looks superior I think you'd still choose option 2.
Rational inventors want relative return, not absolute return.
Re:There's a Problem Here (Score:3, Insightful)
Although the absolute return of option 1 looks superior I think you'd still choose option 2.
Actually, option 2 looks nice - $5000 is pretty good. The problem is that 90 of those accounts will disappear at the end of the year, but one will grow to $20,000 (if you pick wisely).
Re:There's a Problem Here (Score:4, Insightful)
All you are saying is that it is better to get a 10% return than a 1% return on your money, and I certainly don't disagree with that. But you will notice that your example has absolutely nothing to do with the CEO pay. You would want the invesment that returns 10% no matter what the CEO was paid, wouldn't you?
So let's introduce CEO pay into the equation. If you invest $10K an earn $100, a 1% return, you probably wouldn't be too happy, but you would accept that the person managing that money deserved something for his trouble, so perhaps you're willing to pay him $5. If you invest $10K and earn $1K, a 10% return, you're probably much happier; let's say you're willing to pay the person managing that investiment $50. If guy that returns 1% manages a $10B pool of $10K investments and each one pays him the same $5 fee, he earns $5M. If the guy that returned 10% was managing a $100M pool of $10K investiments and each one payed him $50, he only earns $500K. Notice that everyone here pays and gets payed in proportion to what he produces, but the guy who earned a lower percentage returns still earned more, because he managed more money. See how that works?
Count me in! (Score:4, Funny)
Where can I sign up to be a CEO?
I'll be the worst CEO you can imagine.
Re:Count me in! (Score:2)
Duh (Score:2)
CEOs of companies whose stock price is rising are happy with their stock options, and don't care whether their salary is $1 or $1000000. Of those, the smart ones opt for the low salary because it's good for employee and shareholder morale.
Re:Duh (Score:2)
Three things to consider (Score:3, Informative)
2. The major problem is that shareowners - that is to say, the capitalists - are even less able to correct excesses of tech firms, as more shares of such firms have been looted - um, pardon me, given as stock options - to the senior execs and CEO/CFO/COO and thus have even fewer checks on such overpaid employees.
3. Many people fail to understand that most US firms do not permit shareowners to:
CEOs (Score:4, Interesting)
Re:CEOs (Score:2)
Re:CEOs (Score:5, Interesting)
Anyway, a few months later we hear news from Bangkok (of all places) of a stock scam. Guys in a "boiler room" had been selling a bunch of stocks in various companies. They would deliberately pick companies that were heading for bankruptcy (or could be pushed in that direction) and make press releases about the amazing stuff they were doing and produce nice glossy brochures. They'd then use this material to hard sell the stocks by phone. When the companies failed they'd then run off with the money paid for stocks knowing that they'd never have to pay out. (I don't fully understand the mechanics of this despite reading an article in Time about this exact scam.) Anyway, on the list of companies being traded, there was our company!
The key staff (who actually did work) at the company jumped ship. Almost everyone else followed. But bizarrely the company didn't need any staff to continue its scamming. They carried on making press releases describing their (imaginary) work and I remember reading a news story in which I myself was quoted talking about my work there, long after I left! On the basis of this they managed to get multi-million dollar grants from a US city famous for its Mafia connections and presumably, with few staff to pay, the CEO could pay himself very handsomely.
One day I want to write a book about our company. (I did start a Wikipedia entry which hasn't been deleted yet.) Sadly I think of it as 'ours' because a bunch of us worked hard to make it a world-class company that competitors looked up to. Unfortunately, due to the large number of Italian names of the people involved, and the aforementioned reputation of the city that was involved, I might wait a few years.
Re:CEOs (Score:4, Interesting)
Re: (Score:2)
Re:It's basic economics (Score:2)
Re:It's basic economics (Score:2)
They forgot something (Score:2)
libertarianists (Score:4, Interesting)
Thus we have an example of the wealth of the many being transfered to the few (in a manner not based on merit, but rather, groupthink), and why a _totally_ free market is a terrible thing, and not in the interests of the majority.
Re:libertarianists (Score:3, Insightful)
Is it really? How do you quantify value? How do you choose it? Is it equally ludicrous that we have "argued" (which is a strange verb to use for a free market) that a set amount of protons, neutrons, and electrons, conviently in the form of an ounce of gold is equal to about 650$, whereas roughly the same number of protons, neutrons, and electrons in the form of an
Re:libertarianists (Score:3, Insightful)
And?... cause I do all these items as well. The difference between a good manager and a crappy manager is a big one, and it applies all the way up the chain of command in a company, but CEO's dont magically create jobs or grow companies. There is no excuse to pay someone over a million dollars in SALARY. In fact, I would think anything more than a half mil wou
Circle-jerkonomics? (Score:2)
Easy money (Score:3, Insightful)
One of the worst aspects of the governance of publicly held American companies is excessive, non-competative compansation of corporate officers. It grew to an extreme in the dot com bust of 2000. Many elements of corporate governance since been improved. For example with Sarbanes-Oxley it is more difficult to manipulate earnings. But the process by which corporate directors are elected and CXO's are paid lacks transparency. Conflicts of interest and cronyism abound. Small shareholders have little real recourse. For corporations that seek efficiency for maximum rate of return for shareholders, curbing excessive compensation is easy money.
This is prefectly acceptable (Score:2, Funny)
"Dilbert, will you stop embarrassing yourself, if you read Dogbert's book you would know that a fast growing company always looses money while it's expanding"
"were not a fast growing company!"
"and we never will be if we don't loose more money!"
what ever happened to passion? (Score:2)
You can have all the passion you want as long as it doesn't hurt the CEO's stock options.
Entitlement society (Score:4, Insightful)
It reminds me of my occasional impression that at least portions of (U.S., at least) society are becoming an "entitlement" society. If you have the right background, you're effectively entitled to certain compensation. Fancy degree, prior "experience" in the right kinds of roles.
Back in olden days, it might have been a formal family title. But with the increasingly disparate prices of various "classes" of education, the elimination of the so-called "death tax", and the like, family assets are certainly an element of the equation.
Ivy League degree. Connections to secure "fast track" positions. Moving on before the damage catches up.
Actually, many who might fit this description may well be competent. But I also see signs of the scenario I describe. Reminds me of a previous job, and the rotating executives at the company who seemed to be staying in position just long enough to gain a step onto the next rung of whatever ladder.
Wrong subject - should be Old Boy's Network (Score:3, Informative)
In the Old Boys Network, sure, a lot is who you know, but you still have to go through the motions and jump through the hoops.
Let's see, that's four cliches in once sentence!
Compensation should be on the proxy (Score:3, Interesting)
The total compensation (including fringe benefits) for each of the top five employees of a publicly held company has to be reported to the SEC.
The shareholders should set that amount. You put a number on the proxy, and the share-weighted median of those values is the limit on total compensation for the top five. Management should be allowed to suggest an amount on the proxy, but that shouldn't be the default for unreturned votes.
Now that would make management more responsive.
For mutual funds and retirement plans, the right to set that value has to pass through to the beneficial owners. For a mutual fund, you'd specify a number on the fund's proxy, and the fund's managers would be allowed to specify the compensation limit for each company, but those choices would have to add up in some weighted way to the median of the value set by the real owners, the fundholders.
Agents, Lawyers and Contracts (Score:3, Insightful)
Think about your current job. If you are like most of us in the USA, you were offered a position, then they told you how much it paid, and after a few days on the job, you found out what you'd be doing. All of this was decided by a professional human resources person. Hopefully they had some idea what you are worth (doubtful), and if your skills matched up with the position (unlikely, but you're flexable). Most people really don't know how to barter in the US. Part of HR's job is to make you feel like they are doing you a favor by "giving" you a job, so you'll be happy right off the bat. And since most HR folks are shielded from the work, they have to fall back to personalities (which weigh huge), training (which is useless in most positions, white or blue), and how soon you can be available (so they can stop dealing with filling this opening).
May be, (Score:3, Interesting)
integrity correlates with skill but not salary (Score:4, Interesting)
Those of you who discount this study, look around at the real world a bit before you do it. This study makes a lot of sense. Now how to fix it, that is the problem for us as a society....
Well, Duh ... (Score:3, Insightful)
It's elementary. Every extra $million added to the CEO's salary takes a $million from the bottom line.
There was a nice example 2 years ago. Grasso, the chairman of the New York Stock Exchange, paid himself a salary which (including bonuses) entirely wiped out the total profits of the preceding 3 years.
In my opinion a CEO who pays himself more than, say, 40 times the median full-time salary in the company he/she heads should be jailed for theft. And don't give me any BS about "salaries are set by the Board". The people sitting on the boards of directors are almost entirely CEOs, recent ex-CEOs, or cronies of CEOs. They'll agree to the salary of the CEO of company X, because the CEO of company X sits on (or will soon sit on) the boards which have to agree their salaries.
Man (Score:2, Insightful)
Re:What this study really shows... (Score:3, Insightful)
Also, does the article think that the CEO of some small company should make more then the CEO of IBM just because it had a higher percent return. How about complexity and degree of difficulty of the job as