Should executive pay be tethered by independent oversight, even in the face of exceptional shareholder returns?
Executive pay became a talking point again recently with Elon Musk’s $83 billion pay package that even people who earn a good salary, battle to comprehend.Century, a remuneration consultancy, says. He compares executive pay to Bitcoin’s meteoric rise.
Considering market dynamics and volatility, it is important to remember that Bitcoin operates in a decentralised, highly speculative market that is less influenced by traditional economic indicators such as company performance, governance, or macroeconomic policies, he says. “This structure is designed to balance the interests of various stakeholders, including employees, customers and shareholders. High executive pay that mirrors the high-risk, high-reward model of Bitcoin investment can undermine this balance, focusing on shareholder returns without regard to other stakeholders.”
However, there is also a case to make against capping executive pay and rewarding the visionaries, Blair says. Is there a middle ground? Blair says perhaps the real solution lies not in whether we cap or not, but how these packages are structured. “Take the Bitcoin analogy: while it offers high returns, it is also volatile and not tied to traditional asset values.
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