Michael Bloomberg's management advice: Don't undervalue labour force and overcompensate CEOs

CEO compensation is a loaded conversation topic. Are the high pay packages justified? Former New York City mayor Michael Bloomberg, who knows a thing or two about fat pay cheques, had one piece of advice: “Don’t overcompensate CEOs”, he said, while addressing the Harvard Business School’s graduating class of 2019.

“If and when you end up in an executive position, don’t make one of the fundamental mistakes that I see businesses and boards make all the time: Undervaluing their labour force, and over-compensating their CEOs,” he said.

According to him, the management often treats workers like widgets — which they’re not. And, “boards treat CEOs like irreplaceable geniuses, which they rarely are”. He added that doing right by employees will always work. In the long run, it also gives them a greater stake in the success of capitalism. Needless to say, every word uttered by the business tycoon was lapped up by the fresh graduates.