Yahoo Finance reports that a Cornell University study found that giving CEOs at America’s largest companies bonuses such as cash, stock, and options, does not improve results of companies. The article was released at a time where the average S&P 500 CEO makes over two-hundred times the income of the average worker.
3 Observations That Arise From This Story
- Idiots are not going to do a better job if you give them more money. (Although they may be able to afford to dress like a smart-looking person, so we get why you may mistakenly give them a pay raise.)
- Carly Fiorina didn’t increase shareholder value at HP, and now she wants to be President of the United States. So we guess the lesson is, perhaps the high pay just encourages them to do more (stuff we don’t need them to do).
- These people are not professional athletes or entertainers who at least entertain us when they make bad multi-million dollar decisions. Justin Bieber egging the neighbors’ house? Bad decision, but entertaining. Miley Cyrus wearing whatever she wore in the monolog on SNL last night? Ditto. CEO making a bad decision that results in people losing jobs and share value going down? Not entertaining. Fortunately, you may be able to vote against their pay packages the next time CEOs fail to entertain you.
