> would be better off if they promised a $800m incentives-based / performance-based package (e.g. stock options etc.) than promising $80m if the CEO performance

> would be better off if they promised a $800m incentives-based / performance-based package (e.g. stock options etc.) than promising $80m if the CEO performance sucks. I don’t know about the relative ratios between the two but i believe you need both. From a perspective of a succesfull CEO candidate with a proven track record joining your company is risky. There might be something structurally wrong with your industry, or there might be some “ticking bomb” with your business (like some hidden technological flaw, or personality conflict, or regulatory/compliance risk, or the risk of some catastrophy hitting your factories/offices) Many of these are already present before the CEO candidate joins and there is nothing they can do about them. Basically your business might stink and “explode” in the face of the new CEO. On the other hand the CEO candidate presumably have some other options. You are usually not recruiting CEOs from the literal bread line. Let’s think through a concrete example. You tomp is a succesfull business person and you estimate you will conservatively earn $200m in the next 5 years. You have unique skills and they offer you a chance to become the CEO of Boeing today. You have what you belive is a good plan to restore Boeing to its former glory and the pay package will net you if everything goes well $800m in the same time frame. Sounds good, isn’t it? But you are worried that some gizmo in the airplanes already out of the factory might have some flaw. Maybe costs were cut and maybe some part you have never even heard about fails, kills a few thousand people a year after you joined and tanks the whole company. You don’t know what is the chance of that happening, nobody knows. What you know is that if that happens you will earn in your estimate $0. If that happens you might need to sell off your yacth, and tell your daughter she has to drop out of that lovely swiss private school she loves so much. Will you join?