Bulldozer00's Blog

In contrast to yesterday’s post on CEO humility, this post about the opposite – CEO (and board of directors) hubris.

In the usatoday.com article, “CEOs reap huge payouts in 2011, corporate filings show“, the following stats are printed:

U.S. workers averaged $46,742 in 2010, up 2.6% from 2009. A June GovernanceMetrics analysis found average compensation among S&P 500 CEOs rose to $12 million in 2010, up 18% from 2009 — and that’s not counting the potential multimillion-dollar value of stock or stock options, which are granted at set prices and provide holders profits as stock values rise.

So, let’s see. The average “Board Of Directors” thinks that the average CEO is worth $12M/$47K = 255 DICs. Oh well. Who am I to judge what “Boards of Direlectors” decide they pay CEOs? Nevertheless, others do pass judgment:

“It’s insane,” says the Value Alliance’s Eleanor Bloxham. “Corporate boards have bought into the idea that they have to pay up for performance. There’ll be more of the same until institutional investors decide CEOs aren’t worth what they’re being paid.”

Alas, I don’t see the day arriving soon where “institutional investors decide CEOs aren’t worth what they’re being paid“. Do you?