The Pay Problem Response Paper

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Symphanie Vessells Professor Cummins Phi 330: Business Ethics- Mon/Wed December 5, 2014 Response paper 3: Executive Compensation “The Pay Problem” A Chief executive officer (CEO) is typically responsible for leading and executing a company’s long-term strategic plan. The job description of a CEO requires meeting the needs of the company, employees, customers, investors, as well as the law. A CEO is also responsible for making decisions for a company on a day to day basis; however does every CEO deserve such a high salary? In this response paper, I will discuss the reasons why I agree that there is a pay problem within a company in regards to a CEO. A high percentage of top executives are overpaid rather than underpaid. The reason why …show more content…

”The results of a company are more often produced by a group of executives or even by an entire organization’s effort, and only rarely by a single individual" was stated in the article "The Pay Problem" I agree with this 100 percent. Why companies don’t share their earned profit more within a company, like with the employees who worked just as hard to bring in the money? Or how about with the investors who took a chance with the company weather the outcome was good or bad, or even a manager of a …show more content…

In some cases, CEO’s are running failed organizations, and getting paid as if their companies are successful. If CEO’S are not creating new jobs and expanding their companies, then why are they receiving a lot of incentive? Because resources are so scarce, shouldn't companies become more aware and careful about the way they distribute the money. The more CEOs get paid, the worse their company does over the next few years. If a company is in a current downfall, how can they afford to continue to give CEO bonuses/ incentive? Where is this money being generated from? Why do the boards of directors wish to keep someone who is not creating profit, why should he be allowed to receive any bonuses? Lots of companies fail because of the CEO wasteful spending. Once one person does it everyone in the company will think it is okay to spend any way they want. I believe it is important to base a CEO salary on the company performance. Some companies may have great short term performances and failed long term. Before CEO receives bonus/extra pay, companies should ask themselves what exactly our CEO has accomplished this year. What goals were met? What areas did the company make the most profit? What areas still need

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