C.E.O.'s Salaries

[Otispunkmeyer]

GT03ROB said:

Muzzer79 said:

I Know Nothing said:

WE can all admire the rare tallent of the CEOs in the airline industry at the moment. Cut services to the bone, pay crap wages and be surprised people don't want to work for your company, let customers down, while taking home a fat cheque and privalages

Few of us are close enough to the airline industry, at board level, to make an accurate assessment.

It’s worth pointing out though, playing devil’s advocate, that as a CEO there are sometimes only bad choices available, therefore the skill is about choosing the least bad one…..

My wife dated one of them who is CEO at one of the companies in the middle of the current debacles for about 10years many moons ago. She still talks to him occasionally. Her view was his rare talent was to be an arrogant, self centred, none too bright, South African who the spitting Image song could have been written about (yes she did dump him eventually)! I need to remind her he’s in the middle of the current mess!

"Only bad decisions to make" comments make me laugh. Unless the CEO is new and brought in to fix the problems left by some other "top talent", surely it's the CEOs own fault to find the company in a position where there are only bad decisions left to make. Ergo, they've not done a particularly bang up job worthy of huge renumeration have they.

[Otispunkmeyer]

I Know Nothing said:

Muzzer79 said:

But it wouldn’t last long without a captain.

Why not?

If we use the Costa Concordia.... It didn't last long with a captain either

Though I think he might have got his captains credentials in a box of cereal.

[mcdjl]

blueg33 said:

I Know Nothing said:

So why does the competitive market not work lower down?

Went KFC the other day which was closed, why no staff. Worked for a company not so long ago that needed 36 HGV (employed 250) drivers, arranged ten interviews, three turned up. Also needed a couple of cleaners, ran an ad, no one answered.

The answer is to pay more, but they won't!

Edited by I Know Nothing on Thursday 2nd June 16:38

It does work lower down but I guess it takes a while for the employers and the market to realise.

You also have the tension with increasing the cost of the product which could mean you lose customers

Who writes the list cheque? That's why it takes longer for the lower end to get the rises.

[67Dino]

mcdjl said:

67Dino said:

Skeptisk said:

I Know Nothing said:

blueg33 said:

As for the pay, you pay to attract talent in a competitive market, its the same thing that makes footballers, pop stars, f1 drivers etc well paid.

….
To use a comparison - a ship can sail without some of its sailors. But it wouldn’t last long without a captain.

….
The problem with equating CEOs with footballers and actors is that it is much more difficult to judge the performance of CEOs. Yes you can look at profits and share prices but even without a CEO those will vary based on many factors outside the control of the CEO eg competition, change in technology and markets, economic backdrop, currency, interest rates etc.

If we are looking for an analogy, the CEOs role might be best compared to a Football Manager’s. There are also a lot of variables there that are outside their direct control - the strength of other teams, injuries, red cards, transfer decisions, refereeing errors, etc. But the point is that a good football manager can generally get better results from being dealt the same cards than a poor one.

I'd say the opposite. A football team will miss the manager eventually. They'll miss the goalie much quicker.

They would, but if they’ve got a good manager, the goalie wouldn’t be missing…


Just being flippant, actually your point is well made: CEOs don’t fulfil an “essential” role in that sense. Rather they are an optimising role, ensuring that the resources and people of the business are achieving the best possible results. But they certainly aren’t ‘more important’ than great front line people, and good CEOs know that well.

[DanL]

Whenever these debates come up on PH, footballer’s salaries are inevitably raised as a counter-point.

I do wonder if people don’t object to footballer’s wages because at some point everyone has played football, and so can relate their skill level to that of the pros.

In my experience, those objecting to CEO salaries often don’t have experience of management at any significant level, never mind a CEO role, and so don’t have a similar yard stick to compare against…

The point I’m trying to make is that the CEO role isn’t just sitting behind a desk smoking a cigar and letting everyone else get on with the work for you, while the money rolls in.

[Skeptisk]

DanL said:

Whenever these debates come up on PH, footballer’s salaries are inevitably raised as a counter-point.

I do wonder if people don’t object to footballer’s wages because at some point everyone has played football, and so can relate their skill level to that of the pros.

In my experience, those objecting to CEO salaries often don’t have experience of management at any significant level, never mind a CEO role, and so don’t have a similar yard stick to compare against…

The point I’m trying to make is that the CEO role isn’t just sitting behind a desk smoking a cigar and letting everyone else get on with the work for you, while the money rolls in.

I think many on here object to footballer’s current wages because we are old enough to remember when they weren’t paid hundreds of thousands per game. I don’t recall watching football or following teams being any less fun in the 70s when pay was more restrained.

[Talksteer]

I Know Nothing said:

Muzzer79 said:

But it wouldn’t last long without a captain.

Why not?

That metaphor is probably only true on a pleasure boat.

Ships that operate away from land are 24/7 enterprises with numerous qualified officers of the watch who are capable of handling the ship.

In a naval context the captain has an XO who is equally qualified to run the ship and may even be rank equal with the Captain. On larger ships it's likely that the XO has even captained smaller vessels.

[Muzzer79]

Talksteer said:

I Know Nothing said:

Muzzer79 said:

But it wouldn’t last long without a captain.

Why not?

That metaphor is probably only true on a pleasure boat.

Ships that operate away from land are 24/7 enterprises with numerous qualified officers of the watch who are capable of handling the ship.

In a naval context the captain has an XO who is equally qualified to run the ship and may even be rank equal with the Captain. On larger ships it's likely that the XO has even captained smaller vessels.

If what you say is correct, why does a ship have a captain then?

[blueg33]

Muzzer79 said:

Talksteer said:

I Know Nothing said:

Muzzer79 said:

But it wouldn’t last long without a captain.

Why not?

That metaphor is probably only true on a pleasure boat.

Ships that operate away from land are 24/7 enterprises with numerous qualified officers of the watch who are capable of handling the ship.

In a naval context the captain has an XO who is equally qualified to run the ship and may even be rank equal with the Captain. On larger ships it's likely that the XO has even captained smaller vessels.

If what you say is correct, why does a ship have a captain then?

Because someone has to have ultimate responsibility.

[crankedup5]

blueg33 said:

Muzzer79 said:

Talksteer said:

I Know Nothing said:

Muzzer79 said:

But it wouldn’t last long without a captain.

Why not?

That metaphor is probably only true on a pleasure boat.

Ships that operate away from land are 24/7 enterprises with numerous qualified officers of the watch who are capable of handling the ship.

In a naval context the captain has an XO who is equally qualified to run the ship and may even be rank equal with the Captain. On larger ships it's likely that the XO has even captained smaller vessels.

If what you say is correct, why does a ship have a captain then?

Because someone has to have ultimate responsibility.

But will almost certainly not be subjected to any sanctions in the event of failure, may even be offered a ‘golden parachute’. Whereas a ships Captain would be accountable, big differences.

[blueg33]

crankedup5 said:

blueg33 said:

Muzzer79 said:

Talksteer said:

I Know Nothing said:

Muzzer79 said:

But it wouldn’t last long without a captain.

Why not?

That metaphor is probably only true on a pleasure boat.

Ships that operate away from land are 24/7 enterprises with numerous qualified officers of the watch who are capable of handling the ship.

In a naval context the captain has an XO who is equally qualified to run the ship and may even be rank equal with the Captain. On larger ships it's likely that the XO has even captained smaller vessels.

If what you say is correct, why does a ship have a captain then?

Because someone has to have ultimate responsibility.

But will almost certainly not be subjected to any sanctions in the event of failure, may even be offered a ‘golden parachute’. Whereas a ships Captain would be accountable, big differences.

There are sanctions where the law has been broken particularly where bribery and corruption are concerned, and the systems and procedures were not fit for purpose or management has been negligent.

A ships captain is similarly prosecuted if he has been negligent etc.

Its a clear parallel

[LukeBrown66]

I think the problem most people have with this is not the salary part, it is things like bonuses, especially when a company has not performed, that seems to happen far too often and it seems once you get to a certain level, it doesn't mater what you do, you make millions with or without success, and keep moving elsewhere for huge sign on fees and even more bonuses.

it is the market, like footballers, they do not put the price on their head, the clubs, media, agents do it, it is the same with anything, even as punters if we all decided to NOT pay 100 quid for a Madonna ticket and everyone did that, that industry would start to change.

If we all just said, I am sock of the rising fuel costs, we are all going on strike until something is done, something would be done.

The companies here are responsible as are agencies, they are driving this I am sure companies do not WANT to spend this much on a salary!

[blueg33]

In recent years bonuses have been much better linked to business performance

[otolith]

Skeptisk said:

Many CEOs are on bonus plans and so short term improvement in profit, even if detrimental to the long term success of the company, are preferred to plans that give better but deferred benefits.

If the CEO’s benefits are not aligned with the interests of the shareholders, that’s the board’s fault, not his.

[bitchstewie]

LukeBrown66 said:

I think the problem most people have with this is not the salary part, it is things like bonuses, especially when a company has not performed, that seems to happen far too often and it seems once you get to a certain level, it doesn't mater what you do, you make millions with or without success, and keep moving elsewhere for huge sign on fees and even more bonuses.

That would be my view on it.

I get that some people simply find it obscene that a CEO is paid 40x the average worker or whatever it might be but if they're performing well and doing the job personally I don't have a problem with that.

Where I do have a problem is when you see people rewarded for failure.

There was a guy in the financial crisis who I think was CEO of HBOS and we all know how that went and he popped up at Boots and I believe is now at Ladbrokes.

Some people always seem to come out of things OK regardless of the trail they leave behind them.

[98elise]

I Know Nothing said:

blueg33 said:

As for the pay, you pay to attract talent in a competitive market, its the same thing that makes footballers, pop stars, f1 drivers etc well paid.

So why does the competitive market not work lower down?

Went KFC the other day which was closed, why no staff. Worked for a company not so long ago that needed 36 HGV (employed 250) drivers, arranged ten interviews, three turned up. Also needed a couple of cleaners, ran an ad, no one answered.

The answer is to pay more, but they won't!

Edited by I Know Nothing on Thursday 2nd June 16:38

It is working lower down. Somebody is paying them more, that's why your company was struggling to recruit anyone. The press has been full of stories about driving jobs paying significantly more now due to a lack of drivers.

https://www.bbc.co.uk/news/uk-england-coventry-war...

My son works in a supermarket. They are struggling to recruit, and retain staff. They recent upped wages across the board to deal with it.

If there is a shortage of labour, how else you you entice people to leave their current employer and work for you?

[anonymous-user]

The poor performance of a CEO can also invite the attentions of corporate raiders who look for companies valued at less than their assets to either strip them, break them up or saddle them with huge debts while they walk off into to the night with all the money.

I know back in the 90's, George Soros starting buying shares in the company I worked at, forced new directors onto the board. This really woke management up and old George ended making a tidy sum by forcing the company to change and do better.

[Randy Winkman]

Skeptisk said:

DanL said:

Whenever these debates come up on PH, footballer’s salaries are inevitably raised as a counter-point.

I do wonder if people don’t object to footballer’s wages because at some point everyone has played football, and so can relate their skill level to that of the pros.

In my experience, those objecting to CEO salaries often don’t have experience of management at any significant level, never mind a CEO role, and so don’t have a similar yard stick to compare against…

The point I’m trying to make is that the CEO role isn’t just sitting behind a desk smoking a cigar and letting everyone else get on with the work for you, while the money rolls in.

I think many on here object to footballer’s current wages because we are old enough to remember when they weren’t paid hundreds of thousands per game. I don’t recall watching football or following teams being any less fun in the 70s when pay was more restrained.

Football was less fun for the many millions of people now watching it on TV that couldn't in the old days. Hence all of the money.

By the way, I say that as someone that has a soft spot for 70s/80s football and has now lost interest because of the money.

[Muzzer79]

blueg33 said:

Muzzer79 said:

Talksteer said:

I Know Nothing said:

Muzzer79 said:

But it wouldn’t last long without a captain.

Why not?

That metaphor is probably only true on a pleasure boat.

Ships that operate away from land are 24/7 enterprises with numerous qualified officers of the watch who are capable of handling the ship.

In a naval context the captain has an XO who is equally qualified to run the ship and may even be rank equal with the Captain. On larger ships it's likely that the XO has even captained smaller vessels.

If what you say is correct, why does a ship have a captain then?

Because someone has to have ultimate responsibility.

Exactly.

If there is no captain, one of the senior officers assumes the role of captain.

But there’s always a captain.

Same in business. Someone needs to have an ultimate say and responsibility.

[crankedup5]

blueg33 said:

Muzzer79 said:

Talksteer said:

I Know Nothing said:

Muzzer79 said:

But it wouldn’t last long without a captain.

Why not?

That metaphor is probably only true on a pleasure boat.

Ships that operate away from land are 24/7 enterprises with numerous qualified officers of the watch who are capable of handling the ship.

In a naval context the captain has an XO who is equally qualified to run the ship and may even be rank equal with the Captain. On larger ships it's likely that the XO has even captained smaller vessels.

If what you say is correct, why does a ship have a captain then?

Because someone has to have ultimate responsibility.

But will almost certainly not be subjected to any sanctions in the event of failure, may even be offered a ‘golden parachute’. Whereas a ships Captain would be accountable, big differences.