2007-11-20 00:32:16 · 5 answers · asked by Milton A 1 in Business & Finance ➔ Corporations
It's the Board of Directors who set the CEO's pay. But the Board is usually made up of other CEOs selected by the company's CEO. Many CEOs serve on each others' boards and it becomes a game of "you scratch my back and I'll scratch your's." Greed tends to take over.
2007-11-20 00:46:08 · answer #1 · answered by Edward G 6 · 1⤊ 0⤋
the supply of likely to be good CEOs is short, thus even weak candidates have plenty of bargaining leverage before they are hired.
in many cases, the probability that things will turn out well for the soon to be CEO is uncertain or even poor, thus she or he wants guaranteed financial incentives to take on what looks like a dicey job. Why leave a safe and comfortable niche as the number three guy/gal at a successful company for a shot at being number one at a questionable company?
If things do not work out for the new CEO, she or he may well be unemployed for the next several years -- with no income, continuing high living expenses, and high job search costs added on.
Not to mention that the job of CEO at many companies is enormous -- the new person [Rubin] at CitiGroup, for example, may well be looking at 80 hour weeks just to find out where all the problems are and how big they really are.
Would you want 80 hour weeks when your grandchildren are growing up?
2007-11-20 08:46:06 · answer #2 · answered by Spock (rhp) 7 · 0⤊ 0⤋
Market force of supply and demand in each country. When hiring each of them, we don't know that some of them may mess up and make wrong decisions. But there are many unsung successful ceo's that are not well highlighted except for people like Jack Welch.
In UK, they are paid with far less and not many golden parachutes upon being sacked or retired. This is due to the UK conditions.
2007-11-20 10:26:15 · answer #3 · answered by labare 2 · 0⤊ 0⤋
Because the CEO gets to determine the pay of the CEO!
2007-11-20 12:14:49 · answer #4 · answered by Feeling Mutual 7 · 0⤊ 0⤋
Unfortunately it's because they're all crooks now. Back in the day, good CEOs probably were worth their weight in gold. Now...pshhhh....none of them are any more trustworthy than a snake.
2007-11-20 08:38:41 · answer #5 · answered by Tom C 3 · 0⤊ 1⤋