Dueling for Dollars

Tuesday, January 31st, 2006

According to Edward Lazear, managers are Dueling for Dollars:

There’s a good reason corporate CEOs are paid those enormous salaries, and it has little to do with their current performance. According to Stanford Business School economist Edward Lazear, six- or seven-figure compensation packages aren’t a reward for today’s work — it’s a payoff for the long hours put in when the boss was aspiring to the top job. And it isn’t motivating the CEO anymore — it’s motivating the managers who are vying for the top job. ‘The CEO gets to enjoy the money,’ Lazear says, ‘but it’s making everybody else work harder.’

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