Comments on: The solution to CEO pay? Charge people to be CEO.

By: Decidedly: You know your company is in major trouble: Part 2

Decidedly: You know your company is in major trouble: Part 2 — Mon, 21 Apr 2008 22:41:21 +0000

[...] No surprise why the shareholders are irate. Stever Robbins has an interesting alternative: “Charge people to be CEO”. Or at least ensure that they have the same priorities as the shareholders. - Greg Glockner, [...]

By: Enginerd

Enginerd — Mon, 21 Apr 2008 01:33:41 +0000

Money is a status symbol, and I think that’s what CEOs care about most. They are already wealthy. If you force people to pay, they’ll just stay as VP or something.

I’m relatively certain that being a good CEO is difficult. So the fact that there are only 4,000 or so positions isn’t the whole story; how many qualified, driven, people are out there?

Rewarding a CEO with stock seems like a good idea, maybe you could work this idea in. If you forced a CEO to buy stock at market price over
their first month or so, you’d have a CEO with a significant financial investment in the company. By giving them stock, you guarantee they’ll just sell it as soon as they can.

By: Michael Purpura

Michael Purpura — Sat, 19 Apr 2008 22:33:17 +0000

Why not just give them the same pay as the lowest paid member of the company?

Then, because they’re getting the same pay and benefits as the lowest paid member of the company they’re more likely to extend better pay and better benefits to the whole workforce.

What think you?

By: Stever

Stever — Sat, 19 Apr 2008 00:06:06 +0000

I look to Warren Buffet. His companies, totalling hundreds of billions in annual revenue, are all headed by CEOs who are independently wealthy and choose to remain at their job for love of the job. Buffett regularly points out that none of them have to show up and put in a stellar performance; they do it because they want to.

We’ve managed to convince ourselves that people only work for the money. That may be true if you flip burgers at Burger King, but anyone shooting for a CEO position who only cares about the money isn’t someone I want having that kind of control over the employees and communities where they operate.

I also suspect most CEOs (remember, I’m talking of large public companies, here) are already millionaires by the time they hit that level. If not, well then, they have to decide if they want the job enough to go into debt. I’d rather that system than the current system, which simply transfers millions from shareholders & employees to the CEO’s bank account.

Check out Buffett on how options, for instance, let CEOs enrich themselves without the company even having to maintain status quo! http://articles.wallstraits.net/articles/1372

By: Laurent Duperval

Laurent Duperval — Fri, 18 Apr 2008 14:17:25 +0000

Interesting concept. However, I disagree with Gary: I think the largest egos would want to be the first to do it, for bragging rights. It’d be intersting to see the dynamics once the novelty wears off.

It does bring to mind a few issues though:

- How do you make sure the CEO doesn’t get distracted by financial issues du to lack of income? Or are you saying that a CEO should be like a president/prime minister: independently wealthy? Note that in those cases, world leaders sometimes choose not to take their salary, but I’m not sure anyone ever paid to be the leader of a country.

- How to you keep the motivation going? Does the motivation remain the same without compensation?

There are studies that show that compensation is a good stimulant. Others show that it is a good deterrent. How do you balance the two?

It would be interesting to find some studies showing the link between job-related stress, motivation and incentives.

By: Gary

Gary — Fri, 18 Apr 2008 02:22:39 +0000

What a novel idea! Given the limited number of CEO roles and the egos such roles attract, I would think there would be many candidates. But how to make the transition from highly paid to paying for the privilege? No large ego would want to be first. They would make the cover of “Business Week” for the wrong reason.