Analyst and IT Business Edge blogger Rob Enderle has this to say about executive salaries:
“CEO pay has increasingly become a problem over the last several years as it has drifted well out of line with economic conditions and comparable salaries for the rank and file employees. This excess has been connected to both employee mistreatment and executive misadventure, suggesting that it has crossed the line from asset to liability for many firms. Yet turning this problem around isn’t trivial because executives at this level expect these high payments, even though they should know that they are neither good for them personally nor for their respective companies. It is well past time that this topic should be effectively addressed because it’s beginning to cause the failures of a growing number of top executives.”
Enderle says oftentimes the board is to blame:
“At the source for executive overcompensation are boards largely made up of ex-CEOs who themselves were often overcompensated … There are no repercussions to the board for overcompensation and the boards are compensated as well by the company. The board members are effectively selected by the CEO, leading to what can be an ugly cycle of self-indulgence.”
Perhaps a good example of this can be seen with the recent resignation of HP CEO Mark Hurd. He was forced out after board members discovered he had falsified expense reports. Indeed, Don Tennant is unsure “about whether it’s Hurd or the HP board that’s more inept in terms of leadership.”
Aside from the board’s role in supporting extravagant executive compensation, the economic climate took its toll on many tech CEOs’ compensation, but not everyone was hurting. Take a look at technology’s top 10 highest-paid executives in 2009.
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