IN a free‐enterprise, private‐property system, a corporate executive is an employe of the owners of the business. He has direct responsibility to his employers. That responsibility is to conduct the business in accordance with their desires, which generally will be to make as much money as possible while conforming to the basic rules of the society, both those embodied in law and those embodied in ethical custom. Of course, in some cases his employers may have a different objective. A group of persons might establish a corporation for an eleemosynary purpose—for example, a hospital or school. The manager of such a corporation will not have money profit as his objective but the rendering of certain services. In either case, the key point is that, in his capacity as a corporate executive, the manager is the agent of the individuals who own the corporation or establish the eleemosynary institution, and his primary responsibility is to them.

While “greed” is one of the most popular — and most fallacious — explanations of the very high salaries of corporate executives, when your salary depends on what other people are willing to pay you, you can be the greediest person on earth and that will not raise your pay in the slightest. Any serious explanation of corporate executives’ salaries must be based on the reasons for those salaries being offered, not the reasons why the recipients desire them.

A boss wants to pay for results, an employee wants recognition for effort. If a boss recognizes effort, they will get even better results.

The higher the income, the more the person paid for who they are, rather than what they do.

Effective executives know that their subordinates are paid to perform and not to please their superiors. They know that it does not matter how many tantrums a prima donna throws as long as she brings in the customers.

So the question is, do corporate executives, provided they stay within the law, have responsibilities in their business activities other than to make as much money for their stockholders as possible? And my answer to that is, no they do not.

Above your intelligence, above your work ethic, you will be compensated in proportion to your risk.

Effective executives know that their subordinates are paid to perform and not to please their superiors.

To be a manager requires more than a title, a big office, and other outward symbols of rank. It requires competence and performance of a high order.

executives must put the needs of the higher team ahead of the needs of their departments.

[Practicing executives] unevenly qualified by education and experience but uniformly burdened by the same kind of responsibility, is made elite not by inheritance or schooling; but by its assigned duties. Its members have responsibility for leading the organizations that develop material wealth in our society and thereby make possible all the other kinds of wealth that constitute our civilization and make life worthwhile.

People Who Get Higher Pay Require Less Security. ITEM. It's 2004. I am presenting Why Men Earn More to the sales and marketing teams of my publisher (AMACOM). To illustrate financial risk as one of the ways to higher pay, I ask everyone in the room who is paid by commission to stand up. Eight men stand; no women. I then ask those paid by salary to stand: About equal numbers of men and women stand.

or a man's own consent subjects him to a superior.

The most important thing to understand is that the job of a big company executive is very different from the job of a small company executive. When I was managing thousands of people at Hewlett-Packard after the sale of Opsware, there was an incredible number of incoming demands on my time. Everyone wanted a piece of me. Little companies wanted to partner with me or sell themselves to me, people in my organization needed approvals, other business units needed my help, customers wanted my attention, and so forth. As a result, I spent most of my time optimizing and tuning the existing business. Most of the work that I did was “incoming.” In fact, most skilled big company executives will tell you that if you have more than three new initiatives in a quarter, you are trying to do too much. As a result, big company executives tend to be interrupt-driven. In contrast, when you are a startup executive, nothing happens unless you make it happen. In the early days of a company, you have to take eight to ten new initiatives a day or the company will stand still. There is no inertia that’s putting the company in motion. Without massive input from you, the company will stay at rest.