If the CEO can make the company lose only 1 billion this year compared to losing 2 billion if another guy had the job... then he's worth 1 billion to the company. Is paying him a few million really that big of a deal?
> Is paying him a few million really that big of a deal?
Paying anyone, anything, is supposed to be a huge deal. Employees get fired for sub performing for even a few weeks to a month! And we're not talking millions of dollars here, we're talking thousands. How can anyone think of "a few million" as an afterthought? That's easily the salary of 50 people. If the CEO deserves it, show us how that he is better than the 50 people we could have hired. And I mean what he specifically did, and not the 10,000 engineers under him.
You know what would happen in this situation. The employee would be fired.
No, he's worth minus 1 billion, whereas the other guy was worth minus 2 billion. He's worth 1 billion more than the other guy, but that doesn't mean he's worth anything in absolute terms.
Granted, one year is probably too short a time frame to judge; if the CEO has the company making 1 billion a year after, say, three years, then he's presided over a recovery (minus 2 billion to plus 1 billion) and deserves credit (assuming the recovery is stable; even three years is probably not long enough to judge, but I don't want to make this post too long). But if his sole claim to fame is that he lost less money than the other guy, that shouldn't be worth anything.