{"id":2669,"date":"2013-08-14T17:30:58","date_gmt":"2013-08-14T21:30:58","guid":{"rendered":"http:\/\/blogs.bu.edu\/core\/?p=2669"},"modified":"2013-08-14T17:30:58","modified_gmt":"2013-08-14T21:30:58","slug":"the-problem-of-inequality-outsource-the-ceo","status":"publish","type":"post","link":"https:\/\/blogs.bu.edu\/core\/2013\/08\/14\/the-problem-of-inequality-outsource-the-ceo\/","title":{"rendered":"The Problem of Inequality: Outsource the CEO"},"content":{"rendered":"<p>Relating to CC204&#8217;s study of the problem of inequality is an excellent article in <em>Slate<\/em> discussing the unclear ways a CEO&#8217;s &#8216;worth&#8217; is measured. Here is an extract:<\/p>\n<blockquote><p>It\u2019s not exactly news that CEOs of big companies get paid a lot of money. And everyone knows that the pay gap between the big executives and the average Joe has been growing. The surprise revealed in\u00a0a great new database of executive compensation\u2014compiled by Equilar on behalf of the New York Times and covering U.S. firms with more than $1 billion in revenue\u2014is the striking lack of method to the madness: America\u2019s CEOs are paid a lot largely because other American CEOs are also paid a lot.<br \/>\n&#8230;<br \/>\nThis reflects the fact that nobody really knows how to judge a CEO\u2019s worth. Since the executive is hired by a board of directors that\u2019s theoretically accountable to a company\u2019s shareholders, it seems like CEO pay should have something to do with stock price. But nobody wants a CEO to focus exclusively on short-term stock issues and ignore the firm\u2019s long-term strategic position. And even if you do focus on share prices, what\u2019s the relevant issue? Absolute return? Returns relative to the market as a whole? Returns relative to the sector? Tim Cook\u2019s compensation at Apple was recently restructured to emphasize\u00a0Apple\u2019s share price relative to the S&amp;P 500, which in some ways hitches him less to how well Apple fares against its competition than to how investors view the technology sector as a whole. There\u2019s enough ambiguity that you could argue a given case in many different ways.<br \/>\n&#8230;<\/p><\/blockquote>\n<p>For the full <em>Slate <\/em>article, visit\u00a0<a href=\"http:\/\/slate.me\/14mbpMw\">slate.me\/14mbpMw<\/a>.<\/p>\n<p>For the Equilar list of the 200 most highly-paid chief executives at U.S. public companies in 2013, visit\u00a0<a href=\"http:\/\/nyti.ms\/17NemKV\">nyti.ms\/17NemKV<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Relating to CC204&#8217;s study of the problem of inequality is an excellent article in Slate discussing the unclear ways a CEO&#8217;s &#8216;worth&#8217; is measured. Here is an extract: It\u2019s not exactly news that CEOs of big companies get paid a lot of money. And everyone knows that the pay gap between the big executives and [&hellip;]<\/p>\n","protected":false},"author":3740,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[4716,48399,48402,48403,3923,48401,48400],"_links":{"self":[{"href":"https:\/\/blogs.bu.edu\/core\/wp-json\/wp\/v2\/posts\/2669"}],"collection":[{"href":"https:\/\/blogs.bu.edu\/core\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.bu.edu\/core\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.bu.edu\/core\/wp-json\/wp\/v2\/users\/3740"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.bu.edu\/core\/wp-json\/wp\/v2\/comments?post=2669"}],"version-history":[{"count":1,"href":"https:\/\/blogs.bu.edu\/core\/wp-json\/wp\/v2\/posts\/2669\/revisions"}],"predecessor-version":[{"id":2670,"href":"https:\/\/blogs.bu.edu\/core\/wp-json\/wp\/v2\/posts\/2669\/revisions\/2670"}],"wp:attachment":[{"href":"https:\/\/blogs.bu.edu\/core\/wp-json\/wp\/v2\/media?parent=2669"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.bu.edu\/core\/wp-json\/wp\/v2\/categories?post=2669"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.bu.edu\/core\/wp-json\/wp\/v2\/tags?post=2669"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}