8 CEOs Who are Overpaid Based on Performance, via MSNBC
October 23, 2011
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I have mixed emotions about the level of compensation paid to CEOs of some of the largest and most successful American companies. On the one hand, based on the level of responsibility they take on, the number of hours they work, and other factors, I definitely think they should be compensated well above the average worker. Let them get their cash, options, limos, and other perks.
However, that understanding gets put on pause if the company that exec is running is underperforming, or just plain out sucking wind.
A new piece on MSNBC.com has a list of 8 CEOs that earn a high level of compensation, but run companies that had a negative performance on the stock market in 2010. The stock prices of the companies these men helm dropped between 3% and 31.4%, yet they still continued to earn over $18 million in pay and perks (no breakdown of how much is cash, options, or the dollar value of non-cash perks). Now, one could say that even though the stock price went down, in some cases revenues were flat or increased. But the writer points out something I’ve believed for a while as well, that the high compensation can be blamed on the stockholders, since “shareholders who cannot effectively vote to have management removed are saddled not only with those ineffectual executives, but also with their pay packages.”
You can read the article here.