If a corporation hires a CEO, and it is easy to see he has done a poor job. Should he recieve any bonuses?
2006-07-09 10:11:13 · 4 answers · asked by DAVID T 3 in Business & Finance ➔ Corporations
I agree that his compensation should be based on his performance. However, most of the top executives will not join a firm unless they have a "golden parachute;" a package of benefits written into the contract which will enable them to live in the style to which he has become accustomed for a considerable period of time after being terminated or retired. This is the reason the popular job-seekers' manual is called "What Color is Your Parachute?"
2006-07-09 10:17:39 · answer #1 · answered by auntb93again 7 · 1⤊ 0⤋
Yes. First, big salaries or bonuses at the CEO level encourage high effort at the lower managerial levels. The fact that a CEO is paid a large multiple of the compensation of VPs or senior managers induces these latter individuals to 'stay in the game'. Second, big salaries or bonuses are supposed to 'insure' CEO's from investing in acquiring knowledge that is going to be much less useful in other firms. In other words, the knowledge they acquire on the job is highly firm-specific.
2006-07-09 17:24:46 · answer #2 · answered by wubus 2 · 0⤊ 0⤋
Does he has a performance clause in his contract,thats the only way you are going to get rid of him.
2006-07-09 17:19:02 · answer #3 · answered by howaboutit99@sbcglobal.net 2 · 0⤊ 0⤋
no they should never get good pay.
2006-07-09 17:14:45 · answer #4 · answered by The ones you fear 2 · 0⤊ 0⤋