On Sun, 25 Nov 2007 03:59:50 -0500, Eisboch wrote:

wrote in message
...
On Sat, 24 Nov 2007 22:37:06 -0500, HK wrote:


CEO pay and bonus should never be more than a reasonable multiple of
the average worker's salary at the company or corporation. Reasonable
is NOT 500 times.

Philosophically, I tend to agree, but it is supply and demand run amok.
A HR guy once told me, his job wasn't to hire the right guy, it was to
make sure he didn't hire the wrong guy. Meaning, he would always make
the low risk choice. I tend to think the supply of CEO capable people
far outpaces the demand, but if you want to make the low risk choice,
you have to pay big bucks for the handful of candidates with a proven
track record.

If you want to cut costs, CEO pay is a good place to start. CEO pay
has been exploding.

http://www.epinet.org/content.cfm/we...shots_20060621


CEO's aren't hired by HR departments.

Of course they're not, but the same constraints hold true. The HR guy
hired the low risk candidate because he didn't want his boss coming at
him for hiring, in hindsight, the wrong guy. The Board uses the same
conservative thinking. That's one of the reasons many CEOs are
retreads.

They are usually recruited and
hired by the company's Board of Directors.
The Board of Directors are responsible to the shareholders. The
shareholders demand performance, growth and increased stock value. A
candidate for CEO must have qualifications and potential benefit to the
company (in terms of raising stock value or dividends) that are
consistant with the will of the shareholders. For that, you pay ... in
salary, perks and options.

Eisboch

Yeah, but if you want to look at performance, there really isn't much
correlation between high compensation and high performance. For a
multimillion dollar CEO, they aren't driven by the money, it's the ego or
sense of accomplishment. An example, Bob Nardelli took Home Depot's $210
million, and is now running Chrysler for $1 per year (plus some potential
bonuses). I'll say again, cost cutting could start at the CEO level, and
without much of a performance hit.