>>Whether they came through the ranks or from outside, it's still the case that for large companies, in general, the CEO isn't someone who took a financial risk to create the company.
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>OK, now there's qualification in the assertion - it's not risk in general, but that risk wasn't taken to create the company.
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>So what? This sounds a bit like the "you didn't build that" assertion we heard from a certain leader about two years ago. :)
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>Food for thought - how would you feel if someone decided to cap how much revenue you (or anyone else) was allowed to make on FoxPro work over the years - since (by your logic) you didn't take a financial risk to create FoxPro? :)
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>Of course, I'm being facetious.
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>According to Forbes, roughly 75% of CEOs from the top companies were internal appointments where the individual knows the company culture, its operations and financial environment, the key stakeholders, board members and the rest of the executive team. In about half the CEO appointments, the individual held director positions within the company.
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>And yes, there are also success stories where CEOs come from other organizations and bring their successes (and lessons learned).
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>Of course there are failures - and there are also scenarios where corporations get special assistance/protection from the government, something I generally don't agree with.
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>But I fail to understand the argument that a CEO who didn't build the company from the ground up should receive less compensation.
Bill pretty much answered this, but I'll point out that I was responding to Marcia's assertion that CEOs deserve enormous pay because they've taken the risks to build the business. I disagree with her assertion. The CEOs who are earning those outrageous salaries, for the most part, are not the ones who took risks to create the business in the first place.
The key point to me is the one made by the graphs in these articles:
http://www.huffingtonpost.com/2012/06/08/income-inequality-has-ris_n_1581897.htmlhttp://www.theatlantic.com/business/archive/2012/06/are-unions-necessary/258356/Lower union membership tracks with more income inequality. To a great extent, unions built the American middle class.
Tamar
