Ford doesn’t get this complex problem

RE: FORD’S COSTLY PLEDGE TO DUMP HYDRO CEO (APRIL 14)

How did Hydro One’s CEO salary get so ridiculously high? Does he contribute more than $6.2 million to the company’s annual profit? Even if he worked 365 days a year, that would be $17,000 per day! He might be worth that if he invented a new source of renewable energy, or a cure for cancer — not for running a monopoly with a captive market, where business failure is impossible.

Doug Ford obviously doesn’t understand the complexity of the problem; the real issue is not simply the high compensation received, but the compensation systems which make it possible to reach such high levels at government or quasi-government agencies.

At even one quarter of the $6.2-million salary, there would be enough applicants. Contrary to what executives would like us to believe, evidence — e.g., from Facebook, Sears, Stelco, Turing Pharmaceuticals, Enron and many others — demonstrates there is absolutely no relationship between compensation and the quality and competence of CEOs.

Doug Ford’s simplistic solution of “you’re fired!” (sound familiar?) solves nothing and creates a new problem. Unless a replacement were paid less, nothing would have been gained; however, there would now be “compression” with pay grades of executives reporting to the CEO. They would have to be replaced with lower paid people, resulting in organizational chaos and very expensive severances.

Hans Jacobs, Burlington