Why Can’t Top CEOs Be Happy With a Million or Two a Year

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made $24.2 million, on average — 351 times more than a typical worker. Back in 1978, it was only 31 times the lowest paid worker. In 1989, it was 61 times. (end of article excerpt)</p></blockquote><h2 id="1706">Is one person worth that much money?</h2><p id="e133">CEOs are supposed to be the people who are the driving force of a company. It is their vision that brings profits to the company through various plans. Many times they are getting plans and future paths to take from their underlings and they decide what ideas they want to pursue.</p><p id="0865">It seems the first plan from a new CEO is to cut the salary budget. This makes the profit increase, but it lays off workers which is the worst thing to do. There is no “great plan” devised by the CEO. In many cases, there are other divisions or other companies owned by the corporation that they may decide to eliminate. So far, that is not doing anything spectacular.</p><h2 id="5818">Profit out of their control</h2><p id="7e82">What has happened at times is the government creates tax breaks during a year. The corporation makes a greater profit that year, and guess who gets the credit for the profit increase? A division run by a divi

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sion head may have a banner year due to the hard work and great ideas of the division head. Guess who gets the credit?</p><p id="ec67">So now the board of directors will give an increase to the CEO compensation package because he is doing a wonderful job.</p><h2 id="cf1b">What if they do a bad job?</h2><p id="2e82">Most of the CEOs have a “Golden Parachute” clause in their contract. If for any reason a CEO is dismissed, they receive a severance package, which is usually worth millions. Then they get hired as a CEO for another corporation. If you as an employee do a bad job you are fired with no compensation.</p><h2 id="e08a">Could prices be lower if less were paid</h2><p id="1884">I always wondered how much lower prices would be if the CEO salaries were not as much as they are now. A lot of the corporation’s profit will go to the CEO salary, but we cannot forget the lower executives which will also have high salaries and bonuses. Would products made by the company be half the current price? Would services be two-thirds the current price?</p><p id="1509">I would love to have the answers to those questions given to me in real life by cutting the CEO compensations.</p></article></body>

The statistics below are an excerpt from a CNBC article.

The average CEO of the top corporations are paid 351 times the lowest paid in the company. The Economic Policy Institute (EPI) estimates that CEO compensation has grown 1,322% since 1978, while typical worker compensation has risen just 18%. In 2020, CEOs of the top 350 firms in the U.S. made $24.2 million, on average — 351 times more than a typical worker. Back in 1978, it was only 31 times the lowest paid worker. In 1989, it was 61 times. (end of article excerpt)

Is one person worth that much money?

CEOs are supposed to be the people who are the driving force of a company. It is their vision that brings profits to the company through various plans. Many times they are getting plans and future paths to take from their underlings and they decide what ideas they want to pursue.

It seems the first plan from a new CEO is to cut the salary budget. This makes the profit increase, but it lays off workers which is the worst thing to do. There is no “great plan” devised by the CEO. In many cases, there are other divisions or other companies owned by the corporation that they may decide to eliminate. So far, that is not doing anything spectacular.

Profit out of their control

What has happened at times is the government creates tax breaks during a year. The corporation makes a greater profit that year, and guess who gets the credit for the profit increase? A division run by a division head may have a banner year due to the hard work and great ideas of the division head. Guess who gets the credit?

So now the board of directors will give an increase to the CEO compensation package because he is doing a wonderful job.

What if they do a bad job?

Most of the CEOs have a “Golden Parachute” clause in their contract. If for any reason a CEO is dismissed, they receive a severance package, which is usually worth millions. Then they get hired as a CEO for another corporation. If you as an employee do a bad job you are fired with no compensation.

Could prices be lower if less were paid

I always wondered how much lower prices would be if the CEO salaries were not as much as they are now. A lot of the corporation’s profit will go to the CEO salary, but we cannot forget the lower executives which will also have high salaries and bonuses. Would products made by the company be half the current price? Would services be two-thirds the current price?

I would love to have the answers to those questions given to me in real life by cutting the CEO compensations.