I really don't agree with this. I
feel that this is just going away from laissez faire. CEO's of company's have
the most experience and have worked very hard to make their businesses
successful. If the CEO is running a successful company, he should be able to
decide what he is paid. The government intervention in how a public business
pays shareholders is too far, and is moving away from a hands off government.
On the other hand though, I do believe that CEO's ,who make and reward
themselves high amounts of pay, should in their heart give some to middle class
shareholders. There appears to be no appreciation of the fact that there
are many middle class investors who invest their savings accumulated over many
years of service, and many of them are receiving little or no return when they
could be receiving part of the CEO's and other overpaid high office holders.
There is no doubt that the compensation system has encouraged CEO's
to find ways to increase there bonuses, but I don't think it is the governments
duty to change this. The CEO's just need to be a little more giving.
I agree with the post completely. CEO's are the owners of the company and should not be punished for the success of their company. If they have built the company to where it is today then they deserve the benefits of it as well. Shareholders do deserve the amount of compensation based on percentage of company they hold but in my opinion nothing more
ReplyDeleteI agree that Government should not put a restrain or regulation on the amount of money that a CEO receives through rewards or bonuses. Like I said in my post which completely relates to yours, is that hard work pays off and if a CEO is doing great for his company and money is flowing heavily, then why shouldn't a CEO be able to decide what he is paid. Your idea that CEO's should have the choice, in their heart to give a percentage of their pay to shareholders is a generous and great point that you made. Over all government should not restrain the amount of pay a CEO gains for himself.
ReplyDeleteIt is important to remember that this is arguably a move to strengthen the system of private ownership, even if it is done in the form of an intervention. Shareholders are the owners of a company, and an owner should have every right to set policy for a company. That it takes a regulation to ensure this is just a sign that there is no such thing as a corporation before government intervention: they are a product of laws and regulations, and setting those regulations to support owner rights is arguably something that favors a certain understanding of private ownership and free enterprise.
ReplyDeleteActually, for most companies the CEO pay, while large for an individual, would only contribute a very small amount when divided among the outstanding shares. Many companies have several 10 of millions of shares of stock, so dividing it up would mean not a lot per share. It is more a symbolic move, really, designed to lower pay on a whole and to discourage bad behavior by CEOs, who can ruin a company and retire quite nicely if they have already made millions of dollars in a short amount of time.
It's also important to remember that CEOs are not always the owners or the founders of a company, although they usually own some amount of stock.
Okay, I'm trying grasp this. So this whole issue is about shareholders not having a say on what the CEO gets paid? I know that shareholders own the company, but it doesn't really make sense because many of these people own very small amounts of stock and should not have a say in any company issues. If this is the case, I think shareholders who hold a majority of the stock should have a say, but holders with small amount of stock should not.
DeleteIt amounts to the same thing, actually. The way these things generally work is that one share is one vote. So those with large shares in practice have much more influence. Those with a controlling share (more than 50%) have total control.
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