I’ve reviewed an article similar to the topic that is being brought up in your posts. I do not think the right approach in viewing CEO pay is from an ethical standpoint, but instead from a perceived value approach. What is the magic number or what is the price tag to keep that one distinguished member of the team? Within the corporate world, CEO is visionary and the financial performance – company stock – net worth etc are the metrics of this individual’s report card. For a CEO of a sports team, wins and losses are the kicker for the success of individual CEO’s as they hire the right management team to develop that brilliant winning team lead by the coach and their players. The Value is sometimes easier to see in that realm. But why is it in the corporate world, that vision isn’t so clear? That’s because the team has many challenges to seek, which they aren’t concentrated around a game with rules and conditions semi predicted to which a team can prepare itself for. So we ask ourselves what are the contributors to the success or the perceived value for a given corporate performance. This all revolves around competition, economic conditions, market valuations (stock in general), corporate culture & leadership, productivity of the corporation etc. So if there was a way to just categorize a corporation’s performance as a win or a loss, then a clear cut valuation method could be placed on putting a price tag on a CEO’s pay.
"There is no particular right number. That's what's difficult for people who criticize executive pay (S. Polczer & C. Herald, 2009).”
Enjoy the article.
Regards,
Shaun
Reference:
S. Polczer & C. Herald (March 25, 2009), The Art Of Matching Pay To Performance; Petro-Canada chief earns more despite lethargic stock, retrieved on 25 April 2009, from web site http://www.calgaryherald.com/life/Suncor+trails+rival+income/1425557/story.html
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