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CEO salaries are not infinite; they are huge but not infinite. If Tim cook continues to ask for more and more and more eventually he will lose his job. But CEO
by Karishma1234 8y ago
CEO salaries are not infinite; they are huge but not infinite. If Tim cook continues to ask for more and more and more eventually he will lose his job.
But CEO salary has nothing to do with the `Talent`. Tim Cook, Sundar Pichai, Satya Nadella all replaced their predecessors pretty well and will be replaced by someone better in future too.
The real reason for high CEO salaries is mostly about risk associated with replacement. Sundar Pichai got paid $100M in years 2015. Which looks high but when you realise there are 20M shares of Google it is merely $5 per share.
If you are a Google shareholder would you risk Google's steady growth for a $5 dividend per year ? Will you waste your time saving $100M or rather focus on empowering Sundar to find next $10B market to disrupt ?
CEO salaries are high and they will soar with time too as corporations become large and government regulations increase. As regulations and size of corporations increase a person friends with Ajit Pai would matter more than a person willing to take a pay cut.
As a free market person I have no problem understanding it. Whether it is desirable, good or bad those are value judgements but there is no magic or hidden conspiracies at play here.
P.S. : I think Sundar is getting paid really pennies. Justin Bieber made $80 Millions in year 2016. He is just a singer (and a bad one at it). Sundar on other hand is spearheading a company that forms the brain of our civilisational progress at the moment, responsible for employing millions across the globe and saving billions for entire humanity.
- petra 8y agoAre corporations better managed today, than a few decades ago, when CEO's earned much less ?
- Karishma1234 8y agoWhy do you think that there should be any correlation between how better they are managed and CEO salary ? There may be there may not be it is irrelevant.
- maxxxxx 8y agoI thought the quality of management is the way productivity of a CEO is managed. So there should be a connection between that and his pay.
- Karishma1234 8y agoNo. Pay is always based on what it would cost to replace you. It never depends on what you actually do. (What you are willing to pay for X always depends on what is the cost of replacing X with the alternative).
- deleted 8y ago[deleted]
- fjsolwmv 8y agoHow can you write one comment that says both "CEO is not talent, they are replaceable cogs" and "CEO is key to both preserving the current value and creating the future growth of the company"?
- Karishma1234 8y agoCEOs are replaceable but there is a risk in that replacement. The high salaries of CEO mostly reflects that risk. You have not understood my beef with the use of word "infinite".