CEO salaries are often remarked upon as being gravity-defying, or out-of-touch with the ordinary person.
In most cases, that's certainly true.
Therefore, the compensation for those in the corner office look pretty good from the outside, looking in.
Just think, millions of dollars in salary, bonuses, share schemes, free options, performance rights, cushy first class flights, etc.
But, seriously, would you sell your life to put yourself in the position of a CEO?
Long hours in the office and being away from the family, demanding travel schedules, intense pressure from all of the company's stakeholders, and public opprobrium when things go wrong.
A good example in 2017 is Commonwealth Bank of Australia's (ASX:CBA) CEO Ian Narev, who's been forced to resign over the bank's alleged money laundering contraventions.
Whoops, an alleged 'system error' meant over 53,000 transaction reports were meant to have been lodged with AUSTRAC — Australia's financial intelligence agency. If that's not a symptom of poor internal controls and lax oversight, I don't know what is.
Regardless of who within the bank was allegedly responsible, it's Narev's head that's been forced to roll. The higher the salary return, the higher the career risk.
And then there's the embattled Myer Holdings Ltd (ASX:MYR) which has been battling flat to steadily falling revenue numbers since it listed in late 2009 … and a share price that has not once risen above its float price of $4.10.
The share price fall on the day of the float was described in the media as being 'caught up in a day of sell offs'.
No it wasn't.
Owners were selling because they realised that Myer was a dog of an investment, and the sorry share price chart since its float proves this to be the case.
Myer CEO Richard Umbers now has to deal with an angry Premier Investments Limited (ASX:PMV) CEO, Solomon Lew. His almost 11% stake in Myer, originally purchased back in March, has been trashed and although he says Premier has no intention of making a take-over for Myer, he won't be going away.
He'll hang around and make Umbers' life hell.
Umbers' 2017 remuneration last financial year was just north of $1.4 million. For this, he has to deal with angry shareholders, shrinking net margins due to strong retail competition, deserting customers, and a business model stuck firmly in the 20th century.
I don't know about you, but I wouldn't want to be in the Myer CEO's position.
I'm an owner, not a fighter …
[Apologies to Michael Jackson fans].
No one needs to become an industrialist to do well in the business world.
Fortunately, a modicum of regular savings invested over extended periods, placed into soundly growing businesses that generally avoid controversy and perform for shareholders, isn't that hard to do.
All you need then is to know where to place your long-term savings to get the best results. There are a multitude of quality companies out there that serve their shareholders well, over many years.
Think InvoCare Limited (ASX: IVC), ASX Ltd (ASX:ASX), Cochlear Limited (ASX: COH), Reece Ltd (ASX: REH), and Nanosonics Ltd. (ASX: NAN), for example. These are companies I predict will continue to do well in 2018, and beyond.
Foolish takeaway
Whether you'll be the next CEO of the Commonwealth Bank or the local children's charity, you'll still need to be an investor if you want to set yourself up financially (how many high-income earners do you know that don't sock anything away at the end of each month?).
For most PAYG earners, ultimately, it's not what you earn — or how you earn it — that counts, but how much you can save and invest in profitable enterprises over the long term that will determine how 'financial' you can become.
It may sound too simple to be true, but it's working for me and it can for you too.
I'm no captain of industry, but from 24 years of building my family's own portfolio, I can see why long-term investing is so encouraged.
I've also been able to avoid the pressure, politics and stress of 'senior' management. And no, I won't be replacing Ian Narev at the CBA to win that life-changing salary that will set me up for life.
Instead, I'll continue to methodically plonk my savings into sound listed companies on the ASX, and let management and staff do all of the heavy lifting for me. All I need to do is ensure I have the cash via a regular savings plan, and continue to scout for good ideas.
I think you should do the same.
