C.E.O.'s Salaries
Discussion
valiant said:
dave_s13 said:
valiant said:
Yeah, but what about the nurses?
Surely every wage nowadays is compared to the starting salary of a nurse or is that just the RMT thread?
I get what your saying but just anchor on the gist of your reply. I work in the NHS and see the CEO and board of directors of our trust at work and got to say, I couldn't do it. The mental gymnastics, politics, next level bullsSurely every wage nowadays is compared to the starting salary of a nurse or is that just the RMT thread?
t bingo and general psyops at work must be tiresome to maintain. It's a skillset not to be taken lightly.I'd get sacked after day 2, at best.
My dig was that there’s a slight hypocrisy among some PHers that it’s perfectly fine to comment and critique one profession yet take an almost opposite view on this thread where CEOs and the like are lauded.
A bit cheeky on my behalf so apologies for the cross post derailing.
Muzzer79 said:
DanL said:
Do you have job security? Possibly - if there’s a round of redundancies the CEO is unlikely to go.
However, if there is a merger or a buyout, you are the first one in the queue for decisions if you're staying or going.
crankedup5 said:
ettore said:
crankedup5 said:
Found it in the report that I mentioned and linked to earlier, it could be a few percentage points either way but it is about correct. I am as surprised as anybody reading the report.
It’s not true though.Current FTSE100 CEO pay is just over 80 X the national average wage - its c.40 x for the FTSE 250.
crankedup5 said:
ettore said:
crankedup5 said:
Yes it is certainly hard hitting, but don’t worry because the only changes will be brought about by shareholders and whilst they being served well the merry-go-round will happily spin for a while yet.
…and who are the shareholders?We seem to be focusing on large public companies - who are the primary/institutional shareholders?
Then we have FTSE CEO who for the most part take on a fully fledged public Company owned of course by the shareholders. Are you asking me who holds the majority of shares in a FTSE because you don’t know?
crankedup5 said:
ettore said:
smifffymoto said:
Part of the problem and therefore bad image is when a CEO fails,he/she is very rarely punished.They still sail into the sunset with a golden good bye,thanks for nothing pay off,into the next highly paid position.
They don’t though.One f
k up as a CEO and you’re toast. You may get another job but it’s not the same.I actually think the delta between executive compensation and the workforce is out of kilter but there is nonsense on this thread. The CEO role - in a real, scaled business - is a serious, stressful, all encompassing thing that controls your life. It’s wonderful when you get it right and horrific when you get it wrong.
You have responsibility for people’s lives and livelihoods, your share price affects other peoples pensions and investments. You are constantly scrutinised, permanently performing and thoroughly on show.
ettore said:
crankedup5 said:
ettore said:
crankedup5 said:
Found it in the report that I mentioned and linked to earlier, it could be a few percentage points either way but it is about correct. I am as surprised as anybody reading the report.
It’s not true though.Current FTSE100 CEO pay is just over 80 X the national average wage - its c.40 x for the FTSE 250.
Looks like it depends on who you want to believe.
As always stats can be made to look like you want them to.
A500leroy said:
Yes genuine question. With me being at the bottom of the ladder, just wondered how much harder the ceo is grafting to be worth the massive salary as i have no idea what he does!
Well, looking at my CEO's calender he is booked 7am to 8pm 5 days a week & events on Saturday. The majority are back to back 30min slots. His isn't a job, it's a lifestyle dictated by the company. A series of bad decisions from him will put me & my peers out of a job... A series of good decisions could set me & my peers up for jobs for life.
He is paid 10x more then me, as he is a top 1% individual.
Edited by Andeh1 on Friday 27th May 10:56
ettore said:
crankedup5 said:
ettore said:
crankedup5 said:
Yes it is certainly hard hitting, but don’t worry because the only changes will be brought about by shareholders and whilst they being served well the merry-go-round will happily spin for a while yet.
…and who are the shareholders?We seem to be focusing on large public companies - who are the primary/institutional shareholders?
Then we have FTSE CEO who for the most part take on a fully fledged public Company owned of course by the shareholders. Are you asking me who holds the majority of shares in a FTSE because you don’t know?
ettore said:
crankedup5 said:
ettore said:
smifffymoto said:
Part of the problem and therefore bad image is when a CEO fails,he/she is very rarely punished.They still sail into the sunset with a golden good bye,thanks for nothing pay off,into the next highly paid position.
They don’t though.One f
k up as a CEO and you’re toast. You may get another job but it’s not the same.I actually think the delta between executive compensation and the workforce is out of kilter but there is nonsense on this thread. The CEO role - in a real, scaled business - is a serious, stressful, all encompassing thing that controls your life. It’s wonderful when you get it right and horrific when you get it wrong.
You have responsibility for people’s lives and livelihoods, your share price affects other peoples pensions and investments. You are constantly scrutinised, permanently performing and thoroughly on show.
Biggy Stardust said:
crankedup5 said:
Not according to CIPID, the current pay ratio for FTSE CEO to national average is standing at x119
If this is the case, why did you say x280?TBF I think OP is a postman, so considering the bloke running it was in charge of test and trace, could we say that he really has got his comeuppance?
500k isn't really that much for a CEO of something as big as Royal Mail, and having dealt with senior people there in various departments, it is a fking nightmare, not a job I would want.
500k isn't really that much for a CEO of something as big as Royal Mail, and having dealt with senior people there in various departments, it is a f
king nightmare, not a job I would want. okgo said:
TBF I think OP is a postman, so considering the bloke running it was in charge of test and trace, could we say that he really has got his comeuppance?
500k isn't really that much for a CEO of something as big as Royal Mail, and having dealt with senior people there in various departments, it is a fking nightmare, not a job I would want.
I’m surprised that a takeover bid hasn’t been made already.500k isn't really that much for a CEO of something as big as Royal Mail, and having dealt with senior people there in various departments, it is a f
king nightmare, not a job I would want. crankedup5 said:
FTSE Board compensation is heavily scrutinised, of course it is. The question is who makes up these Boards? School tie and back scratching by any chance? Not so long ago we had the ‘Shareholders Spring’, plenty of scrutiny and the findings were unsavoury, hence the disquiet and protests at Annual shareholders meetings.
No, the world has moved on from the 1950’s.crankedup5 said:
Not according to CIPID, the current pay ratio for FTSE CEO to national average is standing at x119
Looks like it depends on who you want to believe.
As always stats can be made to look like you want them to.
Not really no, FTSE board compensation is public domain so the statistics are reasonably clear.Looks like it depends on who you want to believe.
As always stats can be made to look like you want them to.
gotoPzero said:
Its a bit like saying why do premiership footballers get 500k a week (or whatever it is) or F1 drivers 80M a year.
Anyone can kick a ball or drive a car fast....
They are basically top of their game and the best of the best and have a very specific skill set that 99.999% of the rest of the population don't have.
Here is the difference, for footballers and to a lesser extent F1 drivers there is an objective competition and the best people car go from the bottom to the top on skill and application alone.Anyone can kick a ball or drive a car fast....
They are basically top of their game and the best of the best and have a very specific skill set that 99.999% of the rest of the population don't have.
In the case of being a CEO the skills are not unique and as everybody who has ever worked in an organization will know luck, arse licking, personal presentation and most importantly patronage from a senior sponsor are more important than an objectively measurable work based skill set for advancing at work.
The objectively measurable skill that most CEOs have is the skill set of raising up through a corporate ladder, and most importantly there are enormous advantages one can have by luck or by background for doing this. From my own observations decision making ability or the ability to come up with a good vision does not generally correlate well with seniority in an organisation.
So to answer the original question:
1: If you objectively measured what a CEO does in terms of intellect, knowledge and unpleasantness then you would probably come up with a salary multiple 2-3 times what an experienced professional (law, engineering, accountancy) in that area would earn. That would be sufficient to motivate people with an adequate skill set to do this job because generally in most organisations many people a few tiers down could do the job and the multiple of salary associated with being on call or long hours is generally 1.5-2x the base salary of a job.
2: As to why they get paid more, fundamentally it is because they can. If you apply the legal tests of ownership (can I sell it, use it for personal benefit, direct it, break it up, they can get a dividend but only if the CEO allows it etc.) the share holders of a company don't as such "own" it, they own an interest not the company, nobody owns the company which is kind of the point. The closest person to the owner of a plc is actually the CEO or the Chairman. Ergo there is very little stopping them paying themselves more and it is normally the board collectively which decides how much it will pay itself, in the cases of most large companies the amount the board is paid is reasonably small compared to the turnover of the company so pay raises won't hit the bottom line.
3: The second reason is "bench marking", essentially we have to be paid this to "attract top talent", this obviously has the impact of forcing salaries up even though the number of CEO roles is pretty inflexible and the pool of qualified candidate is enormous. There also isn't really another sector CEOs could move to, most would suck at being in a start-up and most CEO jobs are held by a citizen or long term resident of the country the company is based in so CEOs are not as globally mobile as you might expect.
4: However in the long term the most basic reason is a bit of hoodwinking from the finance sector. As inputs and outputs in finance are quantifiable the finance sector has managed to convince society that they should be able to claim a share in profits (but rarely losses) or a cut of what they are involved with rather than just being paid for their time/intellect/knowledge/stress like everyone else. This is kind of the equivalent of a hairdresser whose excellent haircut was 5% contributory to you being able to pull your girlfriend being able to charge £5 every time you have sex. The net result of this was in the 80's and beyond various people in finance were earning huge salaries, their CEOs were then able to argue that as managers of these people they should be paid more and then other board-members of non financial companies were able to argue they should be paid more as this was the "market rate".
crankedup5 said:
CEO a pay ratios against the worker average pay has gone from x 20 in the 1960s to x280 now.
That represents quite some climb in the differential gap.
Unfortunately the worse of the excesses attract the National media attention, and rightly so. Take the case of the former CEO persimmon homes as an example.
For all those talking about risks responsibilities etc.That represents quite some climb in the differential gap.
Unfortunately the worse of the excesses attract the National media attention, and rightly so. Take the case of the former CEO persimmon homes as an example.
Those risks and responsibilities used to exist 50 or 100 years ago yet CEO pay was much lower in comparison, was decision making any worse back then accounting for hindsight and much lower levels of information to board level employees?
There is no other field for those who would be CEOs to jump into, ergo if salaries were 1/10th what they are now most likely the same people would be in leadership positions.
Edited by Talksteer on Friday 27th May 12:48
67Dino said:
The CEO role is a tremendous privilege and hugely satisfying aswell as financially rewarding. However, it is far from a piece of cake, and quite a shock to the system the first time you do it.
Here’s a few things no one tells you before you become a CEO:
- Firms rarely hire a new CEO when things are going well. The day you land you are likely to be standing on a ship that is sinking faster than you thought, with everyone looking at you to stop it going under.
- Your senior team are smart, capable, driven people who have battled to the point of being Directors. Not all of them are thrilled you’ve arrived and not all are going to be helpful. Your first job is going to be fire the ones that aren’t, and find the people who will be.
- All the most difficult issues in the firm will land on your desk. That’s because anything remotely solvable would have been handled lower down the organisation, so all you get are the worst problems to solve. There is no easy work on your To Do list.
- You will have to cover a wide range of specialities and be expected to be good at all of them. In one morning you may have meetings with Finance, Tech, Marketing, HR and Operations, and they expect you to be up to date and able to add value on all of them.
- You will have an almost infinite amount of work to do, since literally every issue in the company is your responsibility. Since you cannot do it all you constantly have to choose which fires can be left burning whilst you sort out the biggest ones. This does not make you popular.
- You are not just always under pressure (since the whole firm depends on your decisions) but also always under scrutiny: the whole firm is watching you. So you cannot show stress, doubts, worries, nothing. You are permanently on show. If a CEO looks like it’s easy doing this they are just doing a good job of hiding the stress.
- If you’re blessed with a good Board it can be a help. A lot of them simply add another burden to the CEO, and another group of people to keep happy.
- Finally, you will be completely, utterly, on your own. You cannot fully confide in anyone, so every major threat, grim decision, and choice of direction is ultimately down to you and you alone.
To be clear, I’m not moaning here, I personally think it’s the best job in the world. It brings more challenge, variety, freedom, opportunity, learning, self-expression and reward than any other role I know of (I won’t comment on whether it’s overpaid, as rather think that depends on the situation). Is it easy though? Absolutely not.
That is a good postHere’s a few things no one tells you before you become a CEO:
- Firms rarely hire a new CEO when things are going well. The day you land you are likely to be standing on a ship that is sinking faster than you thought, with everyone looking at you to stop it going under.
- Your senior team are smart, capable, driven people who have battled to the point of being Directors. Not all of them are thrilled you’ve arrived and not all are going to be helpful. Your first job is going to be fire the ones that aren’t, and find the people who will be.
- All the most difficult issues in the firm will land on your desk. That’s because anything remotely solvable would have been handled lower down the organisation, so all you get are the worst problems to solve. There is no easy work on your To Do list.
- You will have to cover a wide range of specialities and be expected to be good at all of them. In one morning you may have meetings with Finance, Tech, Marketing, HR and Operations, and they expect you to be up to date and able to add value on all of them.
- You will have an almost infinite amount of work to do, since literally every issue in the company is your responsibility. Since you cannot do it all you constantly have to choose which fires can be left burning whilst you sort out the biggest ones. This does not make you popular.
- You are not just always under pressure (since the whole firm depends on your decisions) but also always under scrutiny: the whole firm is watching you. So you cannot show stress, doubts, worries, nothing. You are permanently on show. If a CEO looks like it’s easy doing this they are just doing a good job of hiding the stress.
- If you’re blessed with a good Board it can be a help. A lot of them simply add another burden to the CEO, and another group of people to keep happy.
- Finally, you will be completely, utterly, on your own. You cannot fully confide in anyone, so every major threat, grim decision, and choice of direction is ultimately down to you and you alone.
To be clear, I’m not moaning here, I personally think it’s the best job in the world. It brings more challenge, variety, freedom, opportunity, learning, self-expression and reward than any other role I know of (I won’t comment on whether it’s overpaid, as rather think that depends on the situation). Is it easy though? Absolutely not.
Edited by 67Dino on Thursday 26th May 20:03
I know a chap who has appointed to a CEO role that he takes up in September. Whilst he is not having to save a failing company, he is going to have to drive significant growth in an emerging sector. He is actually pretty scared. Having been a Board Director for 20 years since his early 30's he has a feel for what a CEO has to do. He has held MD roles, but both he and I think these are nothing compared to the CEO in terms of scope and responsibility. He will have a factory with 100's of staff and 100's of millions of investment in plant, offices in several parts of the country.
He openly admits that he is bricking it, but is excited by the opportunity and the ability to allow him to fully test his theories and methods with the intent of creating profit for shareholders and the best pay and conditions for the staff that he can. It will be a journey and as the post above suggests, some of it will be hard.
Its not a multinational company, so no mega salary, but a very comfortable one with extremely attractive incentives.
Gassing Station | News, Politics & Economics | Top of Page | What's New | My Stuff