AndyDufresne wrote:thegreekdog wrote:Lootifer wrote:My wife works in the remuneration area or HR, and she assures me that almost every CEO (and especially those in the US) will be on a very high proportion of at risk or incentive based pay - similar to what you would see in comission based sales jobs.
Thats how ole Mr Simon topped the charts, obviously SPG had a very good year and his remuneration reflects that.
While I agree with TGD that the law or government shouldnt get involved; CEO pay packages are a good example of market failure.
The natural incentive is to elevate your CEO pay packages such that you attract the highest quality candidate, this results in what is a price war, with the biggest losers not being the competitors in the wars but the lackys lower down the food chain who surrport the CEOs.
Through a combination of elitism, old boys clubs, neopotism and many other wonderful components of high end corporate behaviour this price war has been sustained until such a point that CEOs get staggeringly high salaries. (this is the market failure, not the initial incentive or resulting price war)
I don't think CEO prices are necessarily market failure. The market and the economy are able to bear these high salaries. Do people complain? Yes. Do they do anything other than complain? No.
Is the fault really on the people though? I am not so sure, it seems like an easy out.
--Andy
I guess the question is what are the potential courses of action to have CEO salaries reduced:
Option 1: Corporations lower the salaries for no reason.
Option 2: Corporations lower the salaries due to pressure from the general public (through verbal pressure, protests, boycotts, etc.)
Option 3: Corporations lower the salaries because of the passage of laws, regulations, and the like by government.
Are there others? Are we relying on Option 1?