When CEO leads a high life. And Men leads a low life. Morale among employees become low. This affects Company Performance greatly.
Some ceo when they become ceo of a company. The they start buying big car, big house, private corporate jet, ..... Below are the reasons why ceo should not especially when the company cashflows are still a baby.
If the Company is not doing well at first, CEO needs the Workers to work harder with no salary increments. Then, CEO should stick thick & thin with the Workers. The CEO should lead by example, works harder & have a low salary pay.
When the Company just starts or is re-organizing with a new CEO, the cashflows are not stable. In fact, the Company cashflow is still a baby. If the ceo buys big house & big car, his overhead expenses become very high. To pay the installments, the ceo increases his salary pay & the money comes from cutting the Workers salary pay. This decreases the motivation of the company.
It does not mean the CEO cannot buy big car & big houses. What me Cstan98 means. Is that when the Companies cashflow is very tight at the starting working phase of the Companies. CEOs should not expect to draw big salary. It is only when the Companies show big stable profits. Then, when the CEO draws huge stable bonus, then at the later working phase of the Companies, CEOs can reward themselves with a big car & big house. Later Working Phase, not beginning of Companies.
Growing a Company is like growing a Tree Plant. It takes months or years, before the Tree Plant can bear fruits. It is only when the Tree Plant can bear fruits, then you cut down Her fruits (money cashflow) to eat. But before that, when the Tree Plant is still young, you do not cut its branches, flowers, roots, tree trunk, young pre-mature fruits, ..... to eat. If you cut the Tree Plant when it is young, it mean damages, making it unable to bear future fruits. Do not eats too much of the company baby cashflows. Re-invest them to grow the Company.
When CEO spendthift. Then company is wasteful also. When CEO frugal. Then Company is careful also.