3 ms·

More responsibility. CEOs will be responsible for decisions that could make or break the company. Regular employees generally don't have to worry that something

by imgabe 3y ago

More responsibility. CEOs will be responsible for decisions that could make or break the company. Regular employees generally don't have to worry that something they do might cause the entire company to go out of business and lose everyone's jobs. If the company screws up and causes a scandal of some sort, the rank and file employees are not going to be called to testify before Congress about what went wrong and have the entire media shitting on them for weeks afterwards. The board of directors is willing to pay more for someone who will first, hopefully avoid such screw-ups and second, be able to deal with them if they happen.

wkat4242 3y ago
But these board members and CEOs rarely get to face real consequences. At worst a golden handshake that sets them up for their retirement.
- imgabe 3y ago
  Having the leverage to negotiate high compensation means you also have the leverage to negotiate limited downside. If they were the kind of person who wasn't savvy enough to negotiate well for themselves, would you want them negotiating on behalf of the company?
  - wkat4242 3y ago
    There's a difference between negotiating well and being extremely greedy. The latter is not something you'd want at a company with a respectable image.
    - imgabe 3y ago
      Nobody cares about being "extremely greedy" if the company succeeds. If the "extremely greedy" CEO negotiates hard on the company's behalf and gets price concessions from vendors and drives high profits, nobody is going to be lamenting about how it's not "respectable" when they're cashing their fat bonus checks. On the other hand if the CEO leaves money on the table and doesn't negotiate hard because he's afraid randos on the Internet will call him "greedy" and subsequently profits fall and the company has to lay off thousands of people, nobody is going to pat him on the back and commend him on being "not greedy" and "respectable".

by imgabe 3y ago

wkat4242 3y ago

But these board members and CEOs rarely get to face real consequences. At worst a golden handshake that sets them up for their retirement.

imgabe 3y ago
Having the leverage to negotiate high compensation means you also have the leverage to negotiate limited downside. If they were the kind of person who wasn't savvy enough to negotiate well for themselves, would you want them negotiating on behalf of the company?
- wkat4242 3y ago
  There's a difference between negotiating well and being extremely greedy. The latter is not something you'd want at a company with a respectable image.
  - imgabe 3y ago
    Nobody cares about being "extremely greedy" if the company succeeds. If the "extremely greedy" CEO negotiates hard on the company's behalf and gets price concessions from vendors and drives high profits, nobody is going to be lamenting about how it's not "respectable" when they're cashing their fat bonus checks. On the other hand if the CEO leaves money on the table and doesn't negotiate hard because he's afraid randos on the Internet will call him "greedy" and subsequently profits fall and the company has to lay off thousands of people, nobody is going to pat him on the back and commend him on being "not greedy" and "respectable".