Who is getting ripped off by CEO pay? Not RDQ😎

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AUTHOR: R Quinn on 7/04/2024

CEO pay is a hot topic. Actually we mostly use the term CEO incorrectly because the controversy is about some of the CEOs in the largest 500 companies, not the universe of CEOs. There is a big difference.

I read often that CEO pay drives health insurance premiums. That CEO pay raises the cost of a hamburger, that CEO pay takes from workers pay. 

I find the perceptions people hold of the relationship between CEO compensation and prices and people amazing. Of course the big numbers are easy targets for critics. 

Two things to consider. Most (60% or so) CEO compensation is not cash but stock awards often at risk, actually paid for by shareholders. 

Second, do some math as I have. Divide the CEO’s compensation by insurance policy holders, hamburgers sold or number of employees and you will see a negligible impact on each unit – and that assumes the CEO receives no compensation. 

Are all CEOs worth their pay? I’m inclined to say no, but that is a problem for company boards and shareholders. 

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