Monday, April 24, 2006

CEO Pay

Many corporations are starting to run afoul of their publics due to what many call the excessive salary and benefits granted their CEOs. The average raise of CEOs for the S&P 500, for example is now 430 times more than the average workers' pay [AP].

I haven't seen much of a response from these companies. But maybe CEO pay is commensurate with CEO pain.

A CEO of a publically traded company may experience unique physical and mental stresses. They may be thrown in jail, for something they did not knowingly condone. They may have their name besmirched simply because someone doesn't like the way they are handling a division of a company. They may have to suffer personal attacks on their character. They may attain the rarified air of CEO only once in their lifetime, and because there are relatively few CEO jobs avaliable, may never have the opportunity to be CEO again. All jobs may seem of secondary interest and/or importance to them from then on.

Maybe the real problem with CEO pay is not that they get paid so much. Maybe the challenge is figure out how to adequately articulate why a CEO is actually getting paid what she's worth.

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