Capitalism 2 and Capitalism Lab Forum

When you acquire a company as a subsidiary, you need to be careful that its CEO isn't getting paid too much. I acquired one company that on paper looked like it should make a few hundred million a year. I had even had it buy a bunch of media firms which were generating tens of millions in profit each. However, it seemed to be headed for financial distress and was breaking even. I took a look at the income statement and noticed the Salaries expense was astronomical. The legacy CEO was making $358mm a year in salary. I promptly fired him (cost me $120mm just to do that!), and things were fine after that. The new CEO I hired was making $10mm or something, which is much more reasonable. This is just a heads up to other players to pay attention to what CEOs get paid when you acquire their company!