ON THE MONEY
STUART THEOBALD: Something strange is afoot with votes on executive pay
Some companies are clearly frustrated with shareholder input after pay resolutions fail to pass
26 September 2021 - 17:42
What is better: a company that makes a R200m profit with a CEO who earns R10m, or a company that makes a R1bn profit with a CEO who earns R100m?
If you are a shareholder, the obvious answer is the latter. That company delivers far better returns. The fact that the CEO earns 10 times that of the former company is irrelevant. Of course, there may be other considerations, such as wider inequality, that high executive pay may contribute to, but for a shareholder looking to maximise returns, highly paid CEOs are perfectly fine if they generate the profits...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.