Re:SEC adopts rules mandating disclosure of CEO-worker pay r...
by nick-parker on Wednesday August 05, 2015 @02:57PM
(#10011990)
You shouldn't be outraged, but your justification for their pay is a little simplified.
People aren't paid based on the value they create, strictly speaking. They're paid whatever is necessary to get them to work.
The value of a good executive is, I'd argue, far higher than their pay reflects. A truly bad executive can put a company on the path to ruin, and a decent executive making bad choices can do the same. What companies are paying for in good/great executives isn't some N times multiplier on that salary in new income, they're paying for reduced chances of catastrophe.
The supply of good/great executives is small, and the potential loss from putting a dunce in charge of AAPL/GOOG is obscene, so is it any wonder the price lands where it does?
People aren't paid based on the value they create, strictly speaking. They're paid whatever is necessary to get them to work.
The value of a good executive is, I'd argue, far higher than their pay reflects. A truly bad executive can put a company on the path to ruin, and a decent executive making bad choices can do the same. What companies are paying for in good/great executives isn't some N times multiplier on that salary in new income, they're paying for reduced chances of catastrophe.
The supply of good/great executives is small, and the potential loss from putting a dunce in charge of AAPL/GOOG is obscene, so is it any wonder the price lands where it does?