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CEO Pay Is All 'Relative'

Cramer tackled executive compensation for the second day in a row on Wednesday's Stop Trading!, as he and “Street Signs” host Erin Burnett discussed who deserves bonuses and who doesn't.

The driving force behind these outlandish salaries and bonuses, it seems, is “relative value,” the idea that if Yahoo!’s top manager earns a certain salary, then Google’s bosses should make at least the same. Individual performance, though, doesn't seem to be taken into account.

Cramer also explained the difference between the strong-performing CEOs at AT&T and Verizon Communications versus others that don't measure up. And he looked at how this issue is playing out in retail companies like Macy’s .

Lastly, while the uptick rule is good news to Cramer, a Wachovia research report said it could mean bad news for CME Group . Watch the video for Cramer’s take on this and the rights and wrongs of executive pay.

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  • Jim Cramer

    Jim Cramer is host of CNBC's "Mad Money" and co-anchor of the 9 a.m. ET hour of CNBC's "Squawk on the Street."

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