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A better question is why are they paid so little. Right now that’s mostly supply and demand.
by merpnderp 7y ago
A better question is why are they paid so little. Right now that’s mostly supply and demand.
- arbitrarylimit 7y agoWhy doesn't supply and demand drive down executive income then? Surely we don't believe the supply of potential executives is so limited.
- rat9988 7y agoThere is definitely a shortage of proven executives.
- ativzzz 7y agoCan we even define what a "proven" executive is? > There is almost no persistence in CEO performance [1] Meaning that a successful performance as a CEO does not indicate that future stints will be successful. [1]: https://www.institutionalinvestor.com/article/b1db3jy3201d38/The-MBA-Myth-and-the-Cult-of-the-CEO https://www.institutionalinvestor.com/article/b1db3jy3201d38...
- AdrianB1 7y agoIn a large company where a top executive earns over a million dollars per year you have multiple levels of managers, directors, VP's. They all earn more than the lower level, from 20-30% to double that, otherwise there is no incentive go invest all that time and effort in a career for a 5% increase. That means the top executives need to be paid more than the people below them, that makes it quite a high starting point. Yes, paying executives more than 10 million a year is probably too much, but the number of such position is quite small and there is still the benchmarking: you cannot offer a CEO of a top 25 Fortune 500 company the same package as the CEOs of the bottom 25 in the same list. Running successfully a larger company should be rewarded better, at least in theory.
- drngdds 7y agoThe fact that supply and demand creates this kind of situation is a good reason not to rely too much on it.
- deleted 7y ago[deleted]