….CEO Compensation is Obscene
1. For whatever reason, there’s a belief that CEOs are management superstars who can single-handedly make a business successful because of some mysterious, inherent gift. Look at Stelco CEO Rodney Mott, who will make $67-million after the steel maker was acquired by United States Steel Corp. earlier this week. Not bad for just over a year’s work. When asked if he expected a huge reward for doing his job, Mott said. “I expect to. I usually do.” Right.
2. The joy of stock options. Nothing like getting a bunch of cheap options to tip things in your favor. Given it doesn’t cost companies that much to offer, options are doled out like candy at a birthday party. Here, have some Mr. CEO. In fact, have some more.
3. Low or no interest loans, which allow CEOs to buy stock so shareholders can feel like the CEO is part of the gang.
4. A sense of entitlement. I’m a CEO; I’m the boss; CEOs are supposed to make millions; that’s just the way it is.
More: You have to love newly-appointed Chrysler CEO Robert Nardelli who declined to provide details about any performance-based bonuses he will collect. For those unfamiliar with Nardelli, he walked away from Home Depot in January with a $210-million severance package. As well, the Wharton School of Business offers up an article on the “Art and Science of Measuring CEO Performance”.
