Pr3rna recently asked me what I thought about Manmohan Singh’s recent appeal about salaries drawn by CEO.
Let me tell u a hypothetical story:
I own a modest shop which can barely meet its expenses. By stroke of luck, I hire a bright young Manager for a a share in the profits. Now this genius in 5 years converted my small shop not only profitable, but also helped my buy 9 more shops. If the profits increase by 50 folds, what should I do…..
Reward him
or reduce his profit share?
My point is the salary which an employee earns is a concern of employee, the share holders and the board only. As long as there is transparency about the remuneration and the taxes are paid in time, its no business of the government to intervene.
In case of a professional management (where the top executives are not related to the promoters) u guys tell me… would u prefer the lion’s share of the revenues go to the rich and pompous promoters who just sat back and did nothing… or to the workers and management who give their sweat for the company?
In case of promoters doubling up as CEO… I ask you a simple question is that guy better than the CEO of a public sector company which earns 10k USD pa? if he is not worth the compensation he draws… short the stocks and invest in a company which does not squanders your money… market is the best regulator for financial prudence.
Lastly, if you pay peanuts, you will only get monkeys…
5 replies on “Mind Your own Business”
Thanks @ pegasus for your prompt reply.I agree with the first part where you talk about the manager who turned around the fortune of the company.The second part where you talk about the rich and pompous promoters-these rich guys are the ones who risk their capital.They are the ones who concieve the projects. The workers and the management of the company other than the promoters hop jobs out of their own free will. Profit or loss, the promoter has to face it.
//if he is not worth the compensation he draws… short the stocks and invest in a company which does not squanders your money… market is the best regulator for financial prudence//.You are absolutely right market is the best regulator. The govt has no business to interfere.
i should thank you prerna…. i was having a writers block for so long and u suggested me just the right topic 🙂
Couldn’t agree with you more. The govt has no business to interfere. Liked the monkey peanut analogy 🙂
Perhaps he should practise what he preaches. Has he checked how much his own ministers are pocketing ILLEGALLY.
@roshan
thanks…
@apollo…
i believe manmohan is honest…. but ya i can’t say about the rest….