Underperforming CEOs Companies pay bonuses to their CEOs because they want to motivate them to perform better in the future, to encourage them in risk taking and to work hard and to succeed. Paying high bonuses is the best way to keep these people in the company; otherwise they might leave to the competitors of the company. I agree that the well-performed CEOs should be paid with high bonuses, but these bonuses should not only …
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…case that I explained above, meanwhile I strongly disagree with the conclusion of the study for the poor and inferior performing CEOs, which I explained in the second case. In these circumstances I would consider firing the CEO. Shareholders of the company should not be afraid to lose these people to their competitors. If they perform poorly for their company, they will under perform for their competitors, and they will under perform everywhere they go.