I would like to discuss my observations regarding Caleb Melby's article, "We're paying CEOs all wrong" (August 26).
How much a CEO is to be paid should be determined not in absolute terms but in relation to the goals set for him/her and the accompanying trying circumstances: difficulty and complexity of tasks, intensity of competition, legal constraints, unique capabilities of the individual, economic challenges and legacy of his/her predecessor among others.
CEOs insisting on high salaries might give the impression that they are motivated by what Abraham Maslow called lower order needs. However, the position also brings intrinsic motivation in the form of power to control the destiny of the organisation, full utilisation of one's competences and socially important perquisites.
Behavioural economists' advocacy of short-term incentives over long-term ones could be debated. The former aim at inducing quick motivation for results while the latter help in retention and commitment of the high performing CEO. Moreover, high short-term rewards can lead to impulsive or reckless decisions by him/her while long-term rewards make him/her more thoughtful and systematic.
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How much a CEO is to be paid should be determined not in absolute terms but in relation to the goals set for him/her and the accompanying trying circumstances: difficulty and complexity of tasks, intensity of competition, legal constraints, unique capabilities of the individual, economic challenges and legacy of his/her predecessor among others.
CEOs insisting on high salaries might give the impression that they are motivated by what Abraham Maslow called lower order needs. However, the position also brings intrinsic motivation in the form of power to control the destiny of the organisation, full utilisation of one's competences and socially important perquisites.
Behavioural economists' advocacy of short-term incentives over long-term ones could be debated. The former aim at inducing quick motivation for results while the latter help in retention and commitment of the high performing CEO. Moreover, high short-term rewards can lead to impulsive or reckless decisions by him/her while long-term rewards make him/her more thoughtful and systematic.
Y G Chouksey, Pune
Letters can be mailed, faxed or e-mailed to:
The Editor, Business Standard
Nehru House, 4 Bahadur Shah Zafar Marg
New Delhi 110 002
Fax: (011) 23720201 · E-mail: letters@bsmail.in
All letters must have a postal address and telephone number
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