tag:blogger.com,1999:blog-17501440.post113867947039069039..comments2023-08-20T07:26:25.416-04:00Comments on Walker Economics Blog: Edward Lazear is the new CEA headMichael Arjonahttp://www.blogger.com/profile/06189327401592258439noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-17501440.post-1138806993914988872006-02-01T10:16:00.000-05:002006-02-01T10:16:00.000-05:00A large salary for the CEO is a good incentive for...A large salary for the CEO is a good incentive for those lower in the chain. I also think its about the image of the CEO. If he gets a large salary it shows strength in the company. Alot of times you hear about CEOs taking salary cuts when the company is starting to go under. The salary shows the stability and strength stockholders want to see.<BR/><BR/>-FossAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-17501440.post-1138764218252230812006-01-31T22:23:00.000-05:002006-01-31T22:23:00.000-05:00I find Lazear's theory interesting as well. Howeve...I find Lazear's theory interesting as well. However, I think his theory applies mostly to public companies where the salaries are closely watched by board members and stockholders. Over the summer, I worked for a family-owned private company. I noticed that the salaries of the CEO and the President/Chairman were much higher than those of the General Manager or VP of Marketing. Having such a high salary does not encourage others to want to be the next CEO or President, because neither executive position will be available any time soon. The workers know that there is little chance to rise in the company, but the family balances this with added benefits. This company is an exception, but it just points out that Lazear's theory is not as simple as it seems.<BR/><BR/>-TOPHURKI (chris hellmann)Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17501440.post-1138762463560771852006-01-31T21:54:00.000-05:002006-01-31T21:54:00.000-05:00I can see the reasoning behind the incentives expl...I can see the reasoning behind the incentives explanation. By looking at America's major corporations, we know that CEOs are more of a figurehead than an actual cog in the gigantic gear system of the company. just like the Queen of England, she really doesn't do anything, Parliament does, but she is the richest woman in England. (Well, actually, J. K. Rowling is reported as being richer than the Queen, but you get my point). So, if I was next in line to Bill Gates himself, I would work extra hard so that maybe in the future, I could be worth 90 billion dollars.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17501440.post-1138753656826099452006-01-31T19:27:00.000-05:002006-01-31T19:27:00.000-05:00By DanielI find this theory very interesting. I di...By Daniel<BR/><BR/>I find this theory very interesting. I did not question,as i am sure many people did not, the reasoning behind the huge CEO salary. I thought, 'he is at the top, so he should get the most money'. However, I found Lazear's point convincing. Knowing that people respond to incentives, a huge salary is a huge incentive to try to become CEO. This would make all of the workers right below the CEO work very hard to earn the prized position. <BR/>I also found Lazear's second point equally important. In many companies, it would not pay off to offer large salary increases for each ascending position. Most companies benefit from cooperation. Although competition usually helps production, it can cause problems if the employees resort to sabotage. While the large salary for the CEO may work, it probably would not prove effective for all positions in the company.Anonymousnoreply@blogger.com