But the agreement to compensate an executive to the tune .
Of tens of millions is not a matter of luck." (Dushkin /McGraw-Hill, Company., 2000). Who ever said it was. In the first place, top executives have extensive business backgrounds and know their field well. Most people could not handle the type of pressure they are under on a day-to-day basis. Experienced chief executive officers are in high demand, thus allowing to demand a higher rate of pay. After all, most jobs are clear-cut. For example, take an average position such as an x-ray technologist; they have a designated task to perform, to take x-rays, this task is clearly laid out for them. If all directions are followed there is not much that can go wrong. This, unfortunately, is not the situation for top executives in business. They are in a tough postion making decisions that can affect a company as a whole. All it takes is one bad move and they can bring a multi-million dollar business under. On the other hand, by making a good move, this can bring an infinite amount of profit to the company and that is what its about.
However, seeing that one person is given so much power, what guarantee is there that they will succeed and do a good job? There is none, but that is where the board of directors come in to play along with the compensation board. They devised the compensation package with a few objects in mind. For example, depending on the goal they set forth, most businesses have in place a short and long term strategic and action plans. They usually base their salaries and bonuses on the incentive plans. And have a clause in the agreement if the objectives are not met what they receive as either a salary or a bonus. After all, with all the pressure the board puts on the plate of the chief executive officer (CEO) and rightfully so, they know as well as I do with an immense amount of money involved this will motive any individual to do a good job.
