CEOs fleecing the stock
The departing US imported CEO of BHP, Paul Anderson cast doubt on the justification for what he was paid for his stint in Australia. In an interview on Buisness Sunday he said "I think that CEO compensation is out of control, totally out of control". He has of course been a pawn in the 1990's game of ratcheting up CEO pay on the justification of bringing greater expertise to the Aussie business backwater. Generous stock options to US CEO's have been a factor in driving share prices to a bubble value in the late 1990's and deflating in June and July.
Deidre Macken writes a brilliant article in today's Financial Review. She compares the CEO's imported to Australia with an Australia Shearer exported to Europe because of graeter expertise over his European counterparts. The Aussie shaerer (Greg Cash) sheared 115 sheep in the time 10 Italians did 105.
The paradox is that while the exported shearer proved his imported superiority there is little support for the crop of imported CEO's providing superior skills to justify the megabucks. So how do you evaluate the worth of a CEO? Indeed how do you evaluate the worth of the pop star?
Posted Saturday, 27 July 2002
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