U.S. CEO Pay ‘Grotesque’

The discrepancy between American and international CEO compensation is due to greed, plain and simple.

That’s the findings in the latest issue of The Conference Board Review, which surveyed several leaders at global recruiting firms. The article attributes this behavior to a “pervasive form of greed engendered by the modern worship of high-flying American CEOs such as Jack Welch as all-conquering deities who deserve ever-bigger bags of gold as tributes.”

Richard Emerton, head of the CEO practice at Heidrick & Struggles in London, points out that “a perception for the last 10 years in Europe is that the level of remuneration for U.S. CEOs has been excessive.”

Meanwhile, Manfred Kets de Vries, who heads the Global Leadership Center at INSEAD in France, calls  U.S. CEO pay “a little bit grotesque.” Still, he acknowledges that many international CEOs secretly look upon American top executives with envy.

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And because CEOs are an international resource, their “market value” will be set by a global standard, with international firms fighting for talent.

Explains Michael Bekins, senior client partner at Korn/Ferry in Hong Kong, “We are now faced with having to recommend comp packages for C-level recruits that are higher than what Asian companies are used to.”

Elaine Rigoli has nearly 15 years of experience managing content and community for various B2B and consumer websites. Elaine has written thousands of business and technology articles and has been quoted in The Wall Street Journal and eWeek, among other publications.

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1 Comment on “U.S. CEO Pay ‘Grotesque’

  1. Thanks for the interesting story, Elaine. In past times, it would be much easier to dismiss the significance of the gap. Now, from my own personal experience, just being on LinkedIn is an instant, international encounter where these perceptions count and count mightily. I like the double-edged sword element of your story, where envy counters disgust, or is it the other way around?

    The question the story begs, and begs loudly to me, is performance. If pay were only the tail and not the dog, we could thumb our noses at the world’s critique. But, when pay leads and performance is more a political and less a practical term, when common sense and dollars and cents are dominated by the law of the clique, and not the laws of economics or even just good business thinking, then we have to turn our eyes for guilt. Is pay political, or is based on objective standards of real performance? If we get the question right, the answer is always easy. And, with easy answers to honest questions, we can hold our heads up (and our practices too) for the world’s most intense inspection.

    Too few of us can take that heat today. Maybe we can dedicate ourselves to being on that small list.

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