Let me start this way, in the 1980's the average ratio of the salary of a CEO to that of a normal employee stood at 41:1, i.e. a CEO received 41 times the salary of a normal employee. Alright, here standing on this occasion of economic downturn, CEO salaries are almost 411 times that of the normal worker. A google search could authenticate this fact.

In traditional businesses, CEO's were chosen out of people who had put in a lot of time within the company or in the same industry. It was mostly someone who had spent a lot of time with the company and grown through the ranks who got the top post of the Chief Executive officer of the company. But, in the more recent times we've been witnessing CEO's being picked of from the head of other companies and placed on with a new company, with whose traditions and history he is not accustomed to, creating various sorts of dissarrays.

A person who does not understand the values and customs of a company, joing in as a incumbent from another company that had different values does project a problem of conflicting values and methodologies. The steps taken by the incumbent CEo might be drastically different from that of a resident CEo who grew up through the ranks thourougly appreciating the values that lay the foundation of the company.

In taking example of the banking industry, which is in a great turmoil nowadays. I cant stay away from accusing that this trend of head hunting CEO's has cost the economies around the world dearly an might also have been a part causant of the way things have turned out to be. These freshly drafted CEOs who want to make a quick impression on their selection having been the right decision for the company, tend to make riskier propositions to accelarate growth; so as to be able to provide better numbers on the board when their performance is being evaluated. Such, CEOs picked of the market often move away from the company in another 5 or 6 years and the effects of their actions shows up its head. Another CEO is appointed who is famed for turning around such companies , and he pushes the company into much more riskier propostitions. This derides the company of a ny stability that it might have enjoyed. This doesnt always hold true for technology companies, but when the industry we are talking about is the financial sector, this is espescially true.

According to a research report that was initiated in HBS, CEO salaries are heavier when the scale of operations of the firm is larger. This to me is depictant of a race to the top of a pyramid, to reach the place with the larger view, here in this case it being the scale of operations of the firm. The time they spend at smaller companies are just to provide them a proving point. They put the companies at risk to alleviate their own positions.