Why CEO’s Should Make Shit Tons of Money

It’s really weird to me that people are completely okay with Lebron James making $64mm, Kobe Bryant making $49mm and Jon Lester making $34mm per year, but want to pass legislation limiting the salaries of CEO’s of major corporations.

If Lebron James has a bad season the Cavs don’t go to the playoffs and many people in Cleveland will be sad for ~10 days. If the CEO of a major company has a bad year 10's of thousands of people lose their jobs, billions of dollars are lost and the country faces serious issues.

Yet the government is trying to pressure CEO’s of public companies to take smaller salaries because it’s “unfair.”

I totally agree that socio-economic disparity is a big problem, but this is not the solution. We should fight like hell to make sure the people at these companies get paid tons of money so they are incentivized to stay. A big problem with our government is that working for the government sucks, so most of the people who are employed are incompetent.

The advantage companies have is that they can pay their executives lots of money, can get the best talent and can make sure the people with hugely important jobs are most qualified to do them.

If we pass legislation hurting the pay of public company executives, they’ll leave, move to hedge funds or work at private companies who only drive wealth into private markets (aka to the people who are already wealthy).

This is a classic case of hurting public markets and letting retail investors hurt themselves cause they don’t really get how the economy works.

This is a bad idea for the average American. It’ll force the best CEO’s to take the reigns of private companies, encourage private companies to stay private instead of raise capital from the public markets and it’s just really dumb and reactionary.

[5'9", ~170 lbs, male, New York, NY]. I blog about investing. And usually about things I’ve learned the hard way. Opinions are my own, not CoVenture’s

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