Hail the CEO and Spit on the Workers

I’m all for rewarding strong performances by CEOs and by workers. If someone does a good job they should be rewarded. A worker who does the extra things to make sure things go smoothly should be rewarded, as should a worker who comes up with a new innovative process to get the job done more efficiently. The CEO who figures out how to cut costs and streamline production should be rewarded. I simply don’t understand how CEOs who watch their company’s share price fall over a three-year period are rewarded with a huge bonus. Why isn’t the company board immediately fired? Why doesn’t someone sue to get the bonus back? I simply don’t understand the culture of rewarding CEOs for poor performance. Nokia is an excellent example of a company that was on top of the world but didn’t innovate quickly enough and got run over by Samsung and Apple.

From BBC:

Former Nokia chief executive Stephen Elop received a bigger-than-expected pay-off as the firm finalised the sale of it handset business to Microsoft.

Mr Elop got 24.2m euros ($33.5m; £20m) – 30% more than the initial figure.

A large part of that was awarded in Nokia shares, which have risen after the sale of the unit was announced.

When first announced, the pay-off had sparked angry reactions in Finland, not least because Nokia’s business declined under the leadership of Mr Elop.

The country’s economy minister, Jan Vapaavuori, had reportedly said at the time that he found it “difficult to understand the merits of this bonus”

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Errington C. Thompson, MD

Dr. Thompson is a surgeon, scholar, full-time sports fan and part-time political activist. He is active in a number of community projects and initiatives. Through medicine, he strives to improve the physical health of all he treats.


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