Here’s a topical question. Do CEO ‘s deserve to be paid so well?
An organisation, a company or even a country see their fortunes turn when the leaders change.
The question is if all the company’s activities and processes stay more or less the constant, why do fortunes change at such at rapid pace when the leader changes?
Let’s look at a simple example. The moment you decide to travel from London to Glasgow you face a barrage of choices; fly, train, car, coach, etc. Within these alternatives you have to add the some more localised decisions – e.g. which airport? airline? slow or fast train? which car? which route? And so on.
The final decision will be based on your specific needs and preferences at the time, however, what determines a successful outcome of reaching your destination, or not, is based on the route you choose.
You can have the fastest, high performance car or a luxury private jet but what determines reaching the destination is the navigation.
Similarly, with all the resources at your disposal you are not necessarily guaranteed success.
Whereas, if the direction is correct you ARE almost guaranteed success. Maybe faster with proper resources or slower with poorer resources – but reaching your destination is almost a certainty!
It is the CEO’s of a company that set the direction, albeit with the help of his/her team (of navigators), that determines success and not necessarily how much resources you have at your disposal.
The CEO is highly paid and rightly so as they have the sole responsibility of setting the all important direction.
How they are rewarded is a different question altogether. Some CEO’s, like the late Steve Jobs of Apple, chose to pay himself only a couple of dollars a year however he exercised his options based on the performance of the company – that way he added personal liability to the company’s success.