Executive pay is not based on results.

[d-ray657]

One of the excuses for executive pay that has been that a good executive can make decisions that create hundreds or thousands of jobs. So what happens when the company loses thousands of jobs and stockholders lose equity. Why you give the CEO a raise, of course. According to this article the greatest factor influencing executive pay is "peer benchmarking." Companies contend that they have to pay more than the median executive salary to retain their talented executives. What happens if they are not that talented, though. Aw, heck, give them a raise and it will validate hiring them.

One thing that the folks walking Wall Street are well aware of is this:

"Since the 1970s, median pay for executives at the nation’s largest companies has more than quadrupled, even after adjusting for inflation, according to researchers. Over the same period, pay for a typical non-supervisory worker has dropped more than 10 percent, according to Bureau of Labor statistics."

I thought one of the primary elements of a market-based system is incentive to perform. If the leaders of our largest companies don't need to perform well to receive obscene amounts of money, where is the incentive to make the companies succeed?

Regards,

D-Ray