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Doesn't the board of directors usually set the CEO's compensation, not the CEO him/herself? Also, I don't think the stock is a "fig leaf" -- it actually is in
by elihu 9y ago
Doesn't the board of directors usually set the CEO's compensation, not the CEO him/herself?
Also, I don't think the stock is a "fig leaf" -- it actually is in the shareholder's interests that CEOs hold a lot of stock. I can't think of any other explanation why the compensation of (non-founder) CEOs is so high. I suspect that if a CEO were to refuse to accept stock it would make shareholders uncomfortable. The stock is what incentivizes the CEO to act in the interest of shareholders when those are contrary to the interests of employees or customers.
- mcny 9y ago> Doesn't the board of directors usually set the CEO's compensation, not the CEO him/herself? My understanding is that the board is just other executives and CxO from peer companies. Think Eric Schmidt on the Apple Board or the disgraced Citi CEO John Thank on Uber's board. Neither of them represent our desire to minimize executive pay.
- michaelt 9y agoit actually is in the shareholder's interests that CEOs hold a lot of stock Absolutely. So why do they let him sell it?
- elihu 9y agoBecause stock often makes up most of a CEOs compensation. Most people wouldn't want to have their pay locked up for long periods of time somewhere they can't spend it. So, companies like Intel can set up some agreement that says they can sell some of it as long as they keep some minimum amount.
- ForHackernews 9y ago> I can't think of any other explanation why the compensation of (non-founder) CEOs is so high. Really? Have you tried? As a thought experiment, imagine (just hypothetically, of course) that companies were mostly run by grasping plutocrats, and members of the same group of greedy plutocrats sat on the boards of their friends' companies, and set their compensation.