oztech (http://www.lockergnome.com/oztech/author/oztech/) writes an article asking if CEOs or anyone else deserves a multi million dollar salary (full article at http://www.lockergnome.com/oztech/2009/05/23/do-executives-really-deserve-multi-million-dollar-salaries/).

He talks on an example of Sanjay Jha at Motorola paid 17.3 million Dollars in order to guide a struggling company (fulla article at http://www.chicagotribune.com/business/chi-sun-exec-paymay24,0,1338424.story)

On one side, my answer is “Yes”, because , in my opinion, they deserve this salaries for a couple of reason:

• They respond of their actions toward stakeholders (and mostly, among them toward equity holders, who are, at the very end, they’re bosses). Stakeholders have the power to stop this so high salaries. If thet don’t do this they’re responsible for giving money to someone that doesn’t deserve this.
• They’re salaries are mainly variable, so, theoretically speaking, “no results no money” axiom should be respected.

An this would assure some fairness in salaries.

But what makes me concern is that there’s no backup for this.

Because CEO respond to boards and “cross fertilization” among boards is widely applied, with people sitting in a board as controllers being controoled by same people in other board in a “win win” (or loose-loose, depending on the point of view ) situation.

And if company does’t perform well or files for bankruptcy, no (or less) actions are taken against people responsible for the failure.

What’s wrong are not the very high salaries: one guy that has the responsibility of a multi-billion dollar company deserves to get any money he’s worth of (and in my opinion is much much money).

What’s wrong is the system that grants to companies the escamotage to get all the same people within different companies boards.

Another point is if a salary of 20 million is more motivating of a million one or if the two CEOs performances are so different.

I think they’re both motivating, performances are similar, but resposabilities are really different. And this makes sennse for a multi million salary.

As a last point, I’m wondering why anyone is questioning on CEOs salaries that are not “ethical” for this moment of crisis.

But do football or soccer or F1, or golf players stay under different conditions or should the same people question also on this many times bigger salaries?

Or maybe the whole world is just trying to find some people to put people rage for recession on?

Thi article as a comment at http://www.lockergnome.com/oztech/2009/05/23/do-executives-really-deserve-multi-million-dollar-salaries/#comment-7655