no wonder the US auto industry is dying 2941That's fair enough, but let's have that accountability for real. I do not understand out of my Republican Party is an economic policy that talkes about accountability while at the...
The CEO's performance is set by the board. The board's responsibility is to get someone that they believe can make the company run well.
Any newly named CEO is going to have behind him or a her a proven track record of profitability in any division they operated, success at the managerial level, and so on. While morons can make it into low management, generally they do get weeded out as they move up the chain, as they eventually become reponsible for P-L and sales and either have to make money or move along.
However, as a rule, there are a lot of bad managers and genuinely few proven CEOs or CEO candidates who are excellent, so, boards bid on them the same way that a football team might bid on a wide receiver. Quite often a CEO who is a success at one company will have a family, a few million bucks in buttets, and really not be interested in moving on, so it takes - a lot - of money to lure someone like that away.
I don't generally begrude the CEO for money that he or she makes. It is a very demanding job. You are running the whole show and the buck stops with you. If you can succeed at that level, you should get stinking rich. If GM were bringing in billions of dollars a year in profits, and making great cars, and its workers were taken care of, then, as an investor I would have no problem seeing the CEO get a giant bonus check every year as long as he kept my bucks rolling in.
But, I say that when a CEO fails and a company is losing money, the board has to own up to that and think about a replacement, and certainly should not incent the CEO for mediocre results.
