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Then why are people giving them money? What makes you think that you (or some regulator or something) could do a better job of evaluating their worth. First of
by mmorris 16y ago
Then why are people giving them money? What makes you think that you (or some regulator or something) could do a better job of evaluating their worth.
First off, I don't believe that we should impose a different system for valuing people's salaries, and I didn't mean to imply that if I did. I just think that there are obvious flaws in the current system. I wish I had an answer that would fix all the issues, but, of course, it's not that simple.
Essentially, my impression is that you believe that the market which determines people's salaries is entirely rational, and I disagree. As in most (all?) marketplaces, it's not really about the value, it's about the perceived value. Some people (and they are not evenly distributed across all career paths) are better than others at convincing people they are worth a lot, so they get paid more. This is partly due to proximity to the money making process, which is one of the reasons that salespeople are paid so much (it's easier for them to make an argument based on "look how much money I've made you!").
In addition, people don't value CEOs (or anyone else for that matter) in a vacuum. They look at what other CEOs are being paid and are primed to base their valuation accordingly. If their pay was truly based on value-delivered, this wouldn't be the case.
I wholeheartedly agree with you that government involvement via tariffs and salary management is generally a bad thing. It only makes a messy situation messier. But that doesn't mean the free market is perfect, and examining and understanding its weaknesses can only benefit us.