Why do CEO's make so much money?

Question

i think it is unfair that big heads of corporations make so much money while the average American works like 5 times harder then any of them and we get paid squat. please share your opinions.

Answer 1

"The average American works 5 times harder than any of them" Are you quite sure about that?

CEO's also take on a lot off responsibility for the company, if something goes wrong they can take the blame for it. They also have to make a lot of decisions regarding the entire company.  

Answer 2

I think a CEO has to work for the stakeholders, especially the stockholders. That is hard.

It takes a long process of learning, working. It requires a lot of difficult decisions to be made. If an average worker is given such tasks, who guarantee they can tolerate the stress and not buckle?

Answer 3

First off, the average American does not work as hard as a CEO of a major corporation.  CEO's frequently work 80 hours a week, and often work 7 days a week.  The pressure a CEO is under is far beyond what the average worker can understand.  Imagine being responsible for 100,000 employees, and the performance of a stock held by millions of investors.  Most people cannot handle the long work hours, or the pressure that a CEO is under, and most people do not have the education, experience, or intelligence to be a CEO.  I will agree that some of their compensation packages are out of hand, but they are the all stars of the business world just like a pro athlete or a movie star.  Nobody complains if George Clooney makes $20 million for a single film.  How much work did he actually put into making that $20 million?  Far less work than a CEO does in a similar time period.

It is hard to think about one individual making $20 million per year, but they are leading companies making  billions. James McNerney the CEO of Boeing made about $14 million in 2007. http://www.forbes.com/lists/2007/12/lead...

Boeing made $4 billion.  http://finance.yahoo.com/q/is?s=BA&annua... His compensation is .35% of overall profits.

George Clooney got paid $20,000,000 for Ocean's 11.  http://www.imdb.com/name/nm0000123/bio The movie grossed $444 million.  http://www.imdb.com/boxoffice/alltimegro... He was paid 4.5% of the gross, not profits.  McNerney on the other hand was paid .02% of Boeings gross and worked a lot harder for it.  Which would you deam unfair?

  

    

Answer 4

CEO's earn more because they are in charge of everything pertaining to keeping the business profitable and on top of every aspect of a smooth (or not so smooth) running organization.

I do agree that many are just plain greedy when it comes to their salaries however.  Need I mention the ENRON scandal.

As long as you work for someone else, they will continue to be the money makers and the workers always get the scraps.  

Therefore I suggest starting your own part-time or home business and start working toward a business of your own you can grow while you work.  Learn as much as you can before you make the leap into a business of your own first however.

Answer 5

There are a variety of reasons that CEO's make the big bucks.

1 Nobody just becomes CEO. The people that make it that far have fought their way to the top of the ladder and they almost never did it by working 40 hour weeks.

2 CEOs accept a huge amount of responsibility. You wouldn't want a minimum wage guy piloting your airplane, why would you want them running your company.

3 Time at the top is fairly limited. Most CEOs are in and out in under 10 years unless their company founders.  

Answer 6

Sounds like you have no idea what a CEO actually does.  

Answer 7

It's just the open market.  Supply and demand.  If there is someone who is willing to pay, there is always someone who is willing to accept it.

Nothing prevents you from becoming a CEO - you can work one-fifth of an average worker and make a ton of money./

Answer 8

Ambition.  It is difficult to tell who actually deserve what you have described.  One who does not deserve works for Walmart and the one at Sam's Club.  

Also female CEO's do not last since men are envious of them.  Carla Dunn and Carly Fiorina of Hewlett-Packard when creatively terminated.

Your question exposes the dark side of corporations, private market, and free market.  Anyone who whistle-blows are creatively terminated/fired with 2 poweful tools legally available: At-Will Employment and the Right-to-Work Doctrines.  Do a Yahoo search: Sam's Club 6625+Whistle-blowers