Comments on: When I Grow Up I Want To Be CEO Of A Bad Company

By: dong

dong — Sun, 08 Apr 2007 14:30:22 +0000

I’m with Ben on this. Truly outlandish pay needs to tied to the long term performance of the company. That’s what stock grants and options are intended to do. However it often seems that the higher ups end up abusing the system. The board of directors of at public companies are not effective at defending the interests of the shareholders as they are usually more chummy with the management. That said many shareholders have short term interests as well. Couple management that thinks long term with shareholders who think longterm, and you have a well run company.

Mulllay even if he’s a brilliant CEO has made gaffe already with his pay package. He should’ve have reconginized that an structured it in way that only ensureed him a big payout if he succeeded. It’s hard to inspire your workers when you get a huge payout when they are getting laid off.

By: Ben

Ben — Sun, 08 Apr 2007 04:00:36 +0000

How about paying the CEO a reasonable base salary then tying the rest of their income to the long-term performance of the company.

By: Shadox

Shadox — Sat, 07 Apr 2007 07:57:41 +0000

Jim, I am with Jesse on this one. Altough I agree that the CEO alone cannot turn a company around, a great CEO can make a huge difference to a company. Huge. In fact, my own division has seen an amazing transformation in the past year, all because of we got a new President. The workforce remained unchanged. A good CEO can make decisions that will completely change the direction of the company, dramatically boost morale, and inject momentum into the organization.

Having said that, $28M for 4 months of horrible work is hardly what I would call fair compensation…

There certainly is a problem when CEO pay is not tied to shareholder value, given that the shareholders are the true owners of the company.

By: jim

jim — Sat, 07 Apr 2007 02:25:47 +0000

A company can survive with a mediocre CEO and an excellent workforce, it cannot survive with an excellent CEO and a mediocre workforce. Now, while you may argue that’s a mere numbers game (and I would agree), the compensation disparity is too alarming to be ignored.

By: Jesse

Jesse — Sat, 07 Apr 2007 01:32:59 +0000

I’d be careful about saying the front line workers do the “real work” — what do you mean by real work? I agree this is absurd, but wouldn’t want to downplay the absolutely massive amount of time and energy that the typical CEO pours into the company.

By: eROCK

eROCK — Fri, 06 Apr 2007 16:17:43 +0000

Stock seems unaffected by the news.

Personally, moves like this would make me sell. When a company is in trouble, the last thing they should be doing is devoting a large amount of money to someone that has done very little.

By: CK

CK — Fri, 06 Apr 2007 15:11:33 +0000

Jim
Just get direct deposit.
Conscience problem solved.

By: dong

dong — Fri, 06 Apr 2007 14:56:46 +0000

I’m actually very sympathetic to the Ford management in this sitution. It’s the CEOs who’ve been on the job that get paid ludicrous amount of money when they’ve done a terrible job. I don’t know what the market for CEOs is like, but I imagine hiring proving talent takes alot of money. That said, I think a number of “less qualified” candidated would’ve taken the job for alot less given the challenge and opportunity that turning around Ford represents, however large companies like Ford are by nature risk adverse and unwilling to hire an unproven talent.