During the time period of 1991-2001, CEO compensation increased by 340% while th
ID: 447200 • Letter: D
Question
During the time period of 1991-2001, CEO compensation increased by 340% while the average worker's compensation only increased by 36%. This trend has continued. Is the large differential in the increase justified? Please explain your position and provide supporting examples. What are the arguments for and against high CEO compensation? Please explain. Formulate a position on that topic and provide supporting examples. Example what some of the arguments for and against the issue of high CEO compensation.
Explanation / Answer
What is a regular worker? From my perspective a regular worker is a person of 30 – 35 years old who have probably achieved some experience from 2 – 3 previous jobs in operations or maybe as executive representative of a company, probably has a degree from a good university and might have developed some good ideas.
What is a CEO? From my perspective, a CEO is a person who has worked several years, is more than 40 years old, maybe 45, has experience as coach, as executive, as manager, as decisions makers, as representative of a board, as vice president, president, large and medium companies, has 2 or 3 degrees and master from 2 or 3 different universities.
While regular worker increased, the man power increase and the salaries decreased as for the same open position instead of only 5 participants from last year, now you may have 10 participants with very similar background.
However, the CEO profile is very extensive and not the same between companies. CEO’s need to approve many deals with will have a huge impact in the company, the risk is higher than the decisions made by regular workers.
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