Tuesday, 5 January 2016

Adam Smith Institute: Seven reasons not to care about high pay

Adam Smith Institute: Seven reasons not to care about high pay

When bad CEOs are sacked or new CEOs who are expected to be good are hired, the firm they work for can become a lot more valuable. Apple lost 5% of its value after Steve Jobs died, about $17.5bn. Microsoft became 8% more valuable after Steve Balmer resigned in 2013 – he represented more than $20bn worth of losses to Microsoft. Angela Arendt’s departure from Burberry in 2013 wiped £536m off the firm’s value; Tesco became £220m more valuable when its CEO merely announced that he would take an active role in managing the firm. Why? Because CEOs make really important decisions that can make or break the firm.

It does get tedious reading complaints about the high salaries of chief executives. Chief executives don't earn this money just because shareholders are feeling generous...

No comments:

Post a Comment