Letting executives do what they do best

[Sean Lew]

I am a strong believer of you generally get what you pay for. If one pays peanuts, they get monkeys. There has been some controversy on executives salary on TheAge recently. Now there is a move to allow shareholders to have more influence over executives salary. I think this is really interesting – I can see some benefits but also some disadvantages.

On one side, there are some levels of control over rouge executives getting a truck loads of salary when the performance of their company is not even doing well at all. Like many normal employees alot of our work is based on performance measures and I think executives should have a even larger portion of that. They are the chief of a company and they are given the power and authority to make money for investors and also supply employees with a safe, stable and enjoyable job. Shareholders needs to understand that it doesn’t mean controlling executives salary, they would make more money. It should only mean it doesn’t get out of hand. For example, executives should not be getting multimillion dollar packages when the company is losing heaps of market share, profits and missed targets by a long (negative) shot.

However, having said all these, should we just keep the executives happy by giving them what they want and let they do their job in peace? If I were an executive and I need to spend time trying to justify my salary, prepare presentations and documents, talk to shareholders and gather support. Why not spend the time to think of an updated strategy for the company or tweak something within the organisation and make it better? Their time is not cheap and it should be optimised. Remember, there is an old saying that goes like this: A hungry man is an angry man.

What do you think?



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