The Big Bucks

Large pay packages for CEOs and othe business heavyweights always seem to upset people. But here’s an interesting perspective. Let me state it another way: extremely capable people are able to earn extremely large sums. If a company doesn’t pay enough, the extremely capable will find another way to earn those large sums. If you want these people to work for you, you have to pay them very well.

Politicians are fond of talking about capping CEO pay. Fine – the most capable CEOs will simply do something else for a living. They will be replaced by less capable CEOs or, if the salary caps are extreme, they will be replaced by much less capable CEOs. Putting the lunkheads in charge doesn’t strike me as a good idea. On the other hand, look how well it’s worked for Congress!

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