Yogi -
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In general, and over time, people tend to be paid the value of what they produce.
<<Of course this rule does not apply to many CEO's, especially in this country, as they are the priviledged class and the rules of the game for the rest of us do not apply to them, unless they Chainsaw Al themselves out of their royal and pampered surroundings.
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People are paid what they are projected to produce not because a cold calculation is done, but because competition requires it.
As far as CEOs go, there is no question that the vast majority are paid far above what they in retrospect deserve.
However, that is not the point. The fact is that the financial performance of a public company and its stock is so ultrasensitive to the choice of the CEO, that choosing the second best one available over the best one for salary and compensation reasons alone simply makes no financial sense. The difference in market value of a stock that results from choosing between the best and second best CEO will often far exceed the compensation of all but the greediest CEOs. Of course, the entire process plays out in an uncertain future and most decisions will suffer in hindsight.
Regards, Don
PS - I agree with your view of the drug war. It has already corrupted most of our legal and justice systems. |
