For some members of the public, the discovery that the CEO of a business earns a large salary can be a turn-off – some believe that it’s a poor use of funds. That’s what makes it so important to communicate to staff members and customers just what justifies the steep price tags attached to some CEOs, especially those in the charity or social enterprise sectors.
A CEO has a lot of responsibility
A CEO has a lot of responsibility on their shoulders whatever organization they work in, especially if that organisation has many employees and a high turnover. Not only do they answer to their board, but they are also responsible to their staff members and customers for providing a good service and a good working environment.
They are, as individuals, responsible for significant sums of money and for using it in the most effective way, and, by extension in retail and service industries, for the well-being of the customers. If an institutional failing occurs, such as an illness because of food served in restaurants run by the business, or an injury because of failings in the manufacturing process, it’s the CEO with whom the buck stops.
A CEO is an expert in their field
CEOs in all sorts of businesses and organisations must be an expert in the field they work in, whether it’s retail, service or charity, as well as the practical aspects of running an organisation. They are usually extremely experienced and have worked in their field for many years, working their way up from positions offering far lower salaries.
Not only that, but sometimes a CEO may be selected and appointed for a specific expertise or experience that they have. For instance, if a business is undergoing a merger, a CEO who has experience of that from a previous role or roles might be appointed.
In order to attract people with very specific and marketable skills, a high salary has to be offered.