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That’s not how public companies work. CEO compensation is determined by the board and the board is elected by the shareholders. If a CEO makes a lot of money, i
by mruts 8y ago
That’s not how public companies work. CEO compensation is determined by the board and the board is elected by the shareholders. If a CEO makes a lot of money, it’s because the owners of the company think it’s worth the money.
I work in finance and your buddy buddy old boys club isn’t true. Shareholders want as much money as possible and the relationship between them and management is often antagonist: many a CEO are laid out to dry every year by investors.
As such, there’s only one reason why Bob Iger gets paid so much: because he’s generated tremendous value for shareholders over the years and the shareholders want to incentize him to keep generated value.
- JoeAltmaier 8y agoYet in the last couple decades we've seen this jump up an order of magnitude. Don't think those board members aren't writing checks to one another, in that company or a different one. Generating value for the shareholders is a job, and can pay like any other job. The reasons compensation for that has jumped up an order of magnitude has more to do with tulips.
- zaccus 8y agoWhen's the last time a CEO was "laid out to dry" by investors? Are there really enough activist investors to do that? Most people just sell their shares if they aren't happy with results.