Comment H7PK Re: Basic Economics


CEO pay getting more ire from shareholders


Basic Economics (Score: 2, Insightful)

by on 2015-08-12 20:44 (#H74Z)

When the law changed to require executive compensation to be reported along with the other financials for publicly traded companies, we handed future CEO's an incredible amount of power. If you or I apply for a job we are often shooting in the dark when it comes to salary. We can (maybe) get information from friends, colleagues. professional associations, etc., but that information is hard to use in a negotiation (it canbe effective at bumping up yourpay if presented correctly, but that doesn't help anyone else applying for that job or similar jobs since they may not have equal access to that information). That's not the case with these guys. They go in and have hard numbers. They can point to another CEO at a comparably sized company and say, "That guy is making $1.2 mil. I need at least $1.3 + some stock options, since I am far more qualified (have more expertise, will do amazing things, etc.)!"

Soon enough, the salaries of those positions bloom beyond what is reasonable. Other benefits (golden parachutes) get tacked on that aren't available to the lower tiered worker. A company doesn't want to be known as a miserly bunch that pays its executives LESS than their competitors!

Unintended consequences.

Re: Basic Economics (Score: 1)

by on 2015-08-13 00:39 (#H7PK)

Almost every raise I've ever received (some updwards of 50%) have been because I've presented data others have collected (typically the annual survey). This type of information is readily available to various fields, and everyone that can should use it. The idea that CEO salaries have risen across the board because of laws requiring reporting sounds plausible, but without hard numbers (good luck with that) I'm not 100% sold. The people in these jobs are very much the people whose skills in negotiating financials are very much at the forefront of why they are getting hired.

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