CEO salaries and company performance

SLUSK

Is there really a proper link between companies performance and the level of salary you pay the CEO:s? According to a study Swedish CEO:s make less than half than their other European counterparts. Swedish companies don't have a reputations as very unsuccesfull...
http://www.thelocal.se/23868/20091215/

They say, pay peanuts and you get monkeys. In this case this does not seem to be true...

pearcider

Not too surprising to me. Check this interesting vid out.

https://www.youtube.com/watch?v=rrkrvAUbU9Y

It's all about the culture we live in...and our culture is greedy.

*eats cake* :pac:

Time Magazine

SLUSK wrote: »

Is there really a proper link between companies performance and the level of salary you pay the CEO:s?

Sort of. Discussed here.

According to a study Swedish CEO:s make less than half than their other European counterparts. Swedish companies don't have a reputations as very unsuccesfull...
http://www.thelocal.se/23868/20091215/

Competition is an issue.

InReality

have a google for malcom gladwell . he writes a lot about stuff like this.
The people who claim there is a link normally would have some sort of benefit if there was a link so I'd be a bit suspicous.
Plus its pretty much the orthodoxy in the biz world so I'd think its a bit suspect for that reason.

Def I think its seldom CEO's suffer a large loss to their overall package if the companies performance collapses.
Or if they are fired find new jobs surprisingly easy given their "past track record".

Time Magazine

InReality wrote: »

have a google for malcom gladwell . he writes a lot about stuff like this.

I like Gladwell as a social commentator but he's not an economist. The best way to figure out if higher pay is beneficial or not is with data and he's not trained to do that.

nesf

SLUSK wrote: »

Is there really a proper link between companies performance and the level of salary you pay the CEO:s? According to a study Swedish CEO:s make less than half than their other European counterparts. Swedish companies don't have a reputations as very unsuccesfull...
http://www.thelocal.se/23868/20091215/

They say, pay peanuts and you get monkeys. In this case this does not seem to be true...

Cross border salary comparisons can be very misleading. Corporate culture can be drastically different between countries never mind when you start to take in PPP aspects of pay.

e.g.

In simple Euro conversion terms, UK "dole" looks very very draconian compared to the Irish dole. When you convert it into buying power however a very different picture emerges. This is a very different example to executive pay obviously but the problems of simple cross-border comparisons are clear in its simplicity.

InReality

freakeconomics website and marginal revolution do analysis of this sort of stuff too.

ED 209

Don't buy shares or sell them in a company that you think is paying their CEO too much. I agree with performance related bonuses. Would you want a guy who negotiates a meager salary for himself running your company? I think not.