Executive Compensation

Change your perspective
Trying to shed some light on the ongoing discusssion surrounding Manager Compensations. Let me be crystal clear - we don't need politics to get involved here.

Public companies are owned by the shareholders. The Board of Directors appoints Executives and decides solely on the Executives Compensation.

They hire TOP-Management and define targets with them and therefore are the best source to define an adequate compensation and they need to defend their decision on annual shareholder Meeting (AGM).

In the press I can fequently spot  pretty inaccurate statements with regard to the compensation package (severance packages). This has mainly to do with stock options granted to the TOP Management. It appears that journalists just take the face value of the strike price and discount the fact that it will be only the delta of the grant price and the strike price which TOP Managment earns as creme.

I can only encourage you to have a closer look once you read about the next 50 Million CU compensation package.

Along those lines are statements about Goldman Sachs that their average compensation is 700.000 USD. Those statements are misleading and the mean is of little help here.There are a couple of guys earning let's say 20 Millionen USD p.a. dividing this by the number of employees and claim the average salary is 700.000 USD is misleading.

So, clearly those pseudo ethic discussions are of little help and are not the field I want politicians to get involved and to focus on.

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