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Thursday, 11 January 2018

CEO pay packets back in the spotlight

With CEO pay-packets and bonus schedules back in the public domain after Apple's Tim Cook received a 74% increase in pay. Cook had a base salary of $3.06 million, incentive pay of $9.33 million and and equity award of $89.2 million to bring his pay to $102 million.


I believe entrepreneurs taking the full personal risks to start and build the company should benefit financially. My issues arise from CEOs who are hired to run a business don't have a personal stake in the success of the business. These CEOs aren't taking any personal risk as they receive golden handcuffs initially with their real risk more concerned with missing out on their potential bonus. 

With such a rewards system in place, they are not inclined to make decisions in the long term interests of the business owners - the shareholders. Then, if it doesn't work out then they are endowed with a golden parachute so they don't lose. Then there is the Apple battery scandal, shareholders would be very concerned as to what this is going to cost? Pretty poor to be receiving such a bonus when there could be lawsuits pending.

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