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CEO compensation and company performance are not correlated, there's an abundance of studies about that available. If we accept the axiom that their compensatio
by bildung 5y ago
CEO compensation and company performance are not correlated, there's an abundance of studies about that available. If we accept the axiom that their compensation is based on rational decisions of market participatents, what do they decide CEO compensation on, if not company performance?
Can't we describe the reality better if we accept that the "labor market" as an analogy to e.g. a potato market or washing machine market is a faulty model?
- mjburgess 5y agoAre any salaries correlated with company performance? Salaries are determined by the market price for that labour; meaning if you want to hire Alice to be your CEO you are bidding against others who also want Alice. The price is what Alice will take to work for you, and not another company. That is essentially how all salaries are set. There is no mystery. The public steadfastly refuse to believe in anything other than a mythological-moral meaning to prices. It is absolutely bizarre. Prices arent set by anyone and have no moral significance. (All this stuff about tech "scalping" given shortages is likewise the same fallacy. )
- refurb 5y agoSince CEO compensation tends to have a very large component of equity, saying "CEO compensation and company performance are not correlated" is clearly not true.