There has been significant discussion about CEO's and their salaries so I wanted to weigh in on this and put my thoughts onto proverbial paper
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Don't look at it as "education, responsibility and hours invested." Look at it as supply and demand; that's the basic tenet of the free market, not effort or education or work ethic. The free market is not equal to a meritocracy.
A top NHL player can supply something for which there's an enormous market, and an extremely small supply. In essence, he's selling his product to his team, which then packages it and sells it to their fans.
So no, I don't agree that a CEO should necessarily make more than an NHL player, assuming that free market reigns. I assume that whoever has the best and rarest personal product, with the largest potential market, should make more money.
In the many cases (and with many shitty CEOs), that person is going to be the NHL player. In other cases, it'll be the CEO.
Most CEOs do not run multi-billion companies; most CEOs are running smaller or moderately-sized companies, for which there is a large pool of people with their particular skillset, and a smaller market (the company's assets) for their skills; so yes, they'll get paid less than an NHL player who generates millions for his team, and the league as a whole, with his name and talents alone.
It would appear if anything, CEOs are more often insulated from the free market than an NHL player; if a player sucks balls and fails to deliver anything, most often he'll find himself cut or traded. By contrast, one doesn't need to look far these days to find CEOs that have performed at truly shocking levels of fail, and yet retained enormous compensations.
I'm not getting all anti-CEO up in here. I just don't think CEOs should necessarily be paid more than sports stars. It's all based on what you can offer, and who's out there to buy it.
Some very good points, I thank you for your eloquent reply to my ramblings.
How much guidance/assistance the CEO really provides is a solid question. I assume you have read some Scott Adams who has some interesting perspective into CEO's.
I think the only real issue with CEO compensation is something you touched on.
No CEO faces the consequences of failure the way other people do.
I fail at my job, I lose it. NHL player fails, they get traded or sent down to the minors. A CEO fails, they often linger until shareholders and the board stage a revolt and oust said CEO. After which point, the CEO gets another lucrative position at another company. In some cases, they destroy the company then find a new one to run.
My favourite example of this is the ex CEO of Home Depot who has made a successful career out of spectacular failure.
NHL player fails, they get traded or sent down to the minors. A CEO fails, they often linger until shareholders and the board stage a revolt and oust said CEO. After which point, the CEO gets another lucrative position at another company.
I was thinking of that exact thing on the way to work this morning.
A top NHL player can supply something for which there's an enormous market, and an extremely small supply. In essence, he's selling his product to his team, which then packages it and sells it to their fans.
So no, I don't agree that a CEO should necessarily make more than an NHL player, assuming that free market reigns. I assume that whoever has the best and rarest personal product, with the largest potential market, should make more money.
In the many cases (and with many shitty CEOs), that person is going to be the NHL player. In other cases, it'll be the CEO.
Most CEOs do not run multi-billion companies; most CEOs are running smaller or moderately-sized companies, for which there is a large pool of people with their particular skillset, and a smaller market (the company's assets) for their skills; so yes, they'll get paid less than an NHL player who generates millions for his team, and the league as a whole, with his name and talents alone.
It would appear if anything, CEOs are more often insulated from the free market than an NHL player; if a player sucks balls and fails to deliver anything, most often he'll find himself cut or traded. By contrast, one doesn't need to look far these days to find CEOs that have performed at truly shocking levels of fail, and yet retained enormous compensations.
I'm not getting all anti-CEO up in here. I just don't think CEOs should necessarily be paid more than sports stars. It's all based on what you can offer, and who's out there to buy it.
Reply
How much guidance/assistance the CEO really provides is a solid question. I assume you have read some Scott Adams who has some interesting perspective into CEO's.
Reply
No CEO faces the consequences of failure the way other people do.
I fail at my job, I lose it. NHL player fails, they get traded or sent down to the minors. A CEO fails, they often linger until shareholders and the board stage a revolt and oust said CEO. After which point, the CEO gets another lucrative position at another company. In some cases, they destroy the company then find a new one to run.
My favourite example of this is the ex CEO of Home Depot who has made a successful career out of spectacular failure.
Reply
I was thinking of that exact thing on the way to work this morning.
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