Our CEOs are no longer subject to the laws of economics. When they get a job they get all sorts of perks regardless of the performance of the company and they get golden parachutes if everything goes tits up.
They also often get to be both Chairman of the Board and CEO so they determine their own compensation package.
The free market may decide which employees get to keep their jobs or lose them due to competition. But it no longer seems to work with regard to American CEOs.
I don't mind CEOs making gobs of money if their companies succeed, but there needs to be some downside if they crater a company or are involved in mergers or splits that are just about generating temporary income for the people completing the merger or split.
It's common knowledge that the merger of K-Mart and Sears was to collect all the real estate that those two companies owned. It seems as if both companies were purposely run into the ground in order to justify clearing out the real estate for future sale. Unfortunately for the greedy bastards that bought K-Mart and Sears, the real estate bubble burst before they were able to unload all the property. If they had unloaded the property in a timely manner, then only they would have profited leaving their employees and customers in the lurch.
That's not the free market that is touted by all the libertarians.
“It’s common knowledge that the merger of K-Mart and Sears was to collect all the real estate that those two companies owned. It seems as if both companies were purposely run into the ground in order to justify clearing out the real estate for future sale.”
K-Mart long had stocking problems. I never bought much from Sears - a few tools - some of which failed.
“K-Mart and Sears...real estate” was clearly poorly used.
“I don’t mind CEOs making gobs of money if their companies succeed, but there needs to be some downside if they crater a company or are involved in mergers or splits that are just about generating temporary income for the people completing the merger or split.”
Ford required one to own large blocks of stock he purchased on his own at market prices.
Perhaps executive incentive packages could be limited according to the amount of stock an executive personally paid for at market cost.