No one is objecting to pay negotiated in the free market between a willing employee and a willing employer.
However, if you put all your buddies on the Board of Directors, and they vote you the CEO of the year, that is a different matter. He who does that is just conspiring to transfer the output from capital the stockholders have put up into his own pocket.
I have no quarrel with guys like Blll Gates and Warren Buffet--they have spent their lifetimes creating enormous wealth.
But the guy who signs on today with a company that already has a capitalization of $10 billion, what did he do to earn a big stake? I would at least like to see a little performance first, and I mean compared to other companies in that sector.
I would at least like to see a little performance first, and I mean compared to other companies in that sector.
That's not how it works. The board decides the compensation package. If the shareholders don't like the decisions of the board they have recourse.
The day anyone besides the shareholders decides how to compensate employees is a sad day!
But isn't that the point of the article? The only thing that matters is what the Board and stockholders like to see.
What I find appalling are these guys who run a company into the ground then get paid millions just to leave.
Since going public, the company I work for has gone through CEOs at an average of 1 every 2 years. Each left the company a little worse off then when they took the job, and each walked off with a couple of million in bonus money. Thankfully, we're going private again.