4 ms·

Correct. They get paid what they do because they set their own compensation. Performance has nothing to do with it, unless things get so bad they are removed.

• briandear 8y ago
  CEOs of publicly traded companies don’t set their comp, the board does.
  • pishpash 8y ago
    The board and the CEO are people who have known each other for years. On the other hand, I don't think that is the only source of problem. Companies have gotten way too big and the experience of running global conglomerates is simply not common. Add risk aversion to it and the same people, whether succeeding or failing, end up getting hired over and over. It's a lack of supply and lack of competition.
  • lordnacho 8y ago
    Board members have a portfolio of firms they are on, so they are less exposed to any single firm than staff. They are also part of the group that might be named CEO if a new one is needed, so it's in their interest to keep compensation high.
  • dade_ 8y ago
    The board approves the plan and I usually let my friends have what they want.
• manigandham 8y ago
  CEO's dont set their own comp unless it's a small private company, and those are unlikely to be paying millions.
  • jonathankoren 8y ago
    True, but also a myopic understanding of what actually goes on. Who do you think actually serve on the boards? The answer is other executives. And so there's the all too common situation where pay raises and golden parachutes are essentially quid pro quos.
    • manigandham 8y ago
      That situation would require 2 people to have alternate roles at the same companies which is incredibly rare, if not already prevented in the corporate bylaws. Many board members are in entirely different industries and sectors and some only serve exclusively on boards. Many others are investors whose money is being used to pay those executives. There's also a layer of shareholders above the board and voting is required for all major decisions. It's not as simple as you make it out to be.