Recently even with an economic recession and companies using downsizing strategi
ID: 447804 • Letter: R
Question
Recently even with an economic recession and companies using downsizing strategies to improve their bottom lines, CEO salaries and compensation have reached record heights. Questions about the ethics and social responsibility of these executives receiving these high compensation packages as their companies show losses, has caused many constituents to call for limits to be placed on CEO salaries. Consider if this is really unethical behavior on the part of the CEOs or the unintended results of a performance appraisal system and/or reward allocation procedures. Analyze the pros and cons of implementing these limits. Do you agree or disagree with implementing CEO salary limits? Present your side in a written report. Remember to support your side with researched material
Explanation / Answer
Whether you are a shelf stocker at Walmart, a second year associate at a consulting company or an equity analyst at an investment bank, you may feel that you are not adequately compensated for the work you do — in other words, you are underpaid.
There are serious problems with CEO compensation, but “excessive” pay is not the biggest issue. The relentless focus on how much CEOs are paid diverts public attention from the real problem—how CEOs are paid. In most publicly held companies, the compensation of top executives is virtually independent of performance. On average, corporate America pays its most important leaders like bureaucrats.
Source: https://hbr.org/1990/05/ceo-incentives-its-not-how-much-you-pay-but-how
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