Why do investors allow the CEOs to take such a large portion of the profits?
Answer by Drew Steig – Quoras Own Start Up & Small Business Guru
Answer originally posted on Quora.Com
Speaking for myself and i would presume most ceos, we don’t get a large portion of the profits. While we make more than most in our company, but that is due to our ability to drive the company forward.
Most investors have very little skill when it comes to building and maintaining a company. You may think what does a ceo really do? The employees do all the work right? Why not equal pay for all?
Unskilled labor is performed by individuals who follow an easy to follow system designed by…wait for it… the ceo. The ceo often is the main decision maker in marketing, and product development. The ceo drives forward the company, and when that ceo is making you millions of dollars, you want to keep him/her happy with their compensation. It motivates them to work harder, and make YOU more money, because without that ceo you wouldnt have those profits to begin with.
A ceo is not a corporate fatcat that sits around watching all the little people make him money. We put in countless hours, and even when we go home, we are still visualizing what we will do tommorrow, and we expect to be compensated and share in the companies success, or we will take our skills and go make your competitor wealthy instead.