5 ms·
eh? CEO pay is bound by the same thing that everyone else pay is - the market rate. As are wall street salaries (which, again, are absolutely market based).
by Ntrails 8y ago
eh? CEO pay is bound by the same thing that everyone else pay is - the market rate. As are wall street salaries (which, again, are absolutely market based).
Now - you can argue much more effectively that CEO hiring is not very objective, that comp seems to be decoupled from long term performance, and I'll freely grant that Finance doesn't add the societal value equivalent to its slice of the pie. None of these things should be conflated with the continued existence of aristocracy
- JoeAltmaier 8y agoPreposterous. There's no feedback from the bottom line to executive salaries. No 'market rate'.
- Bjartr 8y agoMarket rate, as in what people are willing to pay to have a CEO
- JoeAltmaier 8y agoOr, what the executive suite pay one another in a mutual-check-writing club
- Bjartr 8y agoThe presence of perverse incentives don't make it a non-market.
- mcguire 8y agoIf by "people", you mean other CEOs, then yes.
- Bjartr 8y agoI mean the people paying for CEOs, whoever they are, are the ones with a willingness to pay some amount, and that amount is the upper limit for CEO payment.
- JoeAltmaier 8y agoThat's boards, which is other CEOs from other companies. The mutual-check-writing club.
- notacoward 8y ago"Market rate" is not sacred. There's a ratchet effect here: the potential upside for both the CEO and the people who decide on CEO hiring is extremely large, while the downside for both parties is artificially limited by corporate structures and liability law. Worst case for them is that the CEO parachutes to another company, and the other rentiers take a slight loss quickly made up by their other bets. "Market rate" means nothing when the market is so severely distorted, and the viability of the free market itself depends on removing such distortions. As for aristocracy, where else do you think this ratchet effect leads? It leads directly to a level of inter-generational wealth disparity that is functionally indistinguishable from explicit hereditary peerage.
- mikestew 8y agoCEO pay is bound by the same thing that everyone else pay is - the market rate. Okay, there's a market rate. Why is that rate so high? I'm sure we all thought "hell, I could have run HP into the ground for half what they paid Fiorina." Yeah, except you and I aren't in the "potential CEO" club. That club is determined by wealth, birth, and connections, not what the market will bear.