"The average CEO makes over 280 times what their company's line worker earns. This is more than 10 times the ratio observed in the 1970s. Looking just at the salaries and bonuses of Fortune 500 CEOs, financial executives, top university presidents, and even some directors of the larger non-profit organizations, you would think that these leaders are performing at high levels-at least levels high enough to justify their huge compensation. Unfortunately, that's not often the case."
"Many executives are paid huge salaries and severance compensation even when their performance is dismal (and brief). About half of these leaders will be out of the job in less than three years. So, if we are not rewarding leaders for their performance, what are we rewarding them for? They often receive their enormous compensation merely because they made it to the top. CEO salaries have been on a meteoric rise for decades, and they are often independent of the leaders' or the companies' performance."
CEO pay has risen dramatically, leaving average CEOs earning over 280 times line workers, a ratio far above 1970s levels. Large salaries and bonuses at Fortune 500 firms, universities, and nonprofits often appear unjustified by actual results. Many executives still receive huge pay and severance despite dismal or brief performance, with about half leaving within three years. Excessive compensation often stems from elevating CEOs to celebrity status and over-attributing organizational success to individual leaders. Leadership evaluation biases and the growing independence of pay from performance drive unequal and outsized top-leader compensation.
Read at Psychology Today
Unable to calculate read time
Collection
[
|
...
]