Quote:
Originally Posted by Platapus
What I don't understand is how we can have CEO's make massively poor business decisions, bring their company to the brink of ruin and the CEO quits and gets this fantastic "going away" package worth millions.
Hell, I can run a business to the ground all by myself and I would be happy with 1 million dollars. 
CEO's should have a salary of $1.00 per year and a percentage of the profits. Company does well, CEO gets money, company does poorly, CEO eats Raman like the rest of the employees.
The key is that if the CEOs have golden parachutes, they are not incentivized to help the company as they can always punch out and be taken care of. |
But it won't work like that in a free market. A CEO who is looking at a two jobs isn't going to take the purely profit sharing one, he's going to take the profit sharing one that also has a nice annual salary. It's only the idealist (Musk and other famous CEO's come to mind) that will willingly take only profit sharing. Those guys are out there to make a statement, the average CEO is only in it for the cash.
It's just like in sports, the players (CEO's) see what a company is capable of paying, and they demand it. They may or may not be worth that amount, but that's what they will be paid.