Executive Salaries and What it Means to our Economy The economy of the United States is by far the largest and most powerful economy in the entire world. The average family income is roughly $40,000 a year and our GDP (Gross Domestic Product) is well over 10 trillion dollars. The next closest country is Japan with 4 trillion dollars of total GDP.(Johnson & Wales: Economics) The United States has so many large corporations it takes someone to run each one and it also take a lot of money to pay someone to be in charge of each one. Top companies in the United States range from automobile manufacturers to household appliance manufacturers to telecommunication companies. The largest company in the United States under the category of net income is Citigroup which is in the banking industry. The CEO of Citigroup is Charles O. Prince. In 2005 Charles O. Prince raked in $22,994,729 in total compensation including stock option grants from Citigroup. The average employee would have to work 459 years to equal Charles O. Prince's 2005 compensation.(AUM) Other benefits that CEOs harvest range from country club memberships to yacht expenses. Mattress King Simmons Bedding covers up to $105,000 in annual costs for the crew on CEO Charles Eitel's yacht. Eitel, who earned $998,000 in salary and bonus, makes the yacht available for corporate functions 30 days a year. (USA Today) The extra perks that CEOs acquire are mind-boggling for the average person to fathom. The ones to blame unfortunately are ourselves. Over the years there could have been investor involvement to stop this inflation of executive pay from happening. Sadl... ... middle of paper ... ...y as respect income. The recent explosion of big business and international expansion makes it necessary for a company to offer huge compensation to its CEO. It is not fair though for us to compare a person's compensation to our own. We do have not the slightest clue of the stress level of their job, nor the skill necessary to attain such a position. It sure seems nice though to be a CEO. Works Cited USA Today/Special report: CEO pay 'business as usual' http://www.usatoday.com/money/companies/management/2005-03-30-ceo-pay-2004-cover_x.htm USA Today/Special Report: Executive Pay 2004 http://www.usatoday.com/money/companies/management/2004-ceo-pay-total-chart.htm Americas Union Movement/2005 Trends in CEO Pay http://www.aflcio.org/corporatewatch/paywatch/pay/index.cfm
The United States is known for having a free-enterprise economy where a business can be conducted freely without government involved. In free-enterprise economies, goods and services are traded openly and are produced depending on the demand. People who support this type of economy believe it motivates businesses to make money and welcome new ideas. An important part of the economy is to have full employment and low inflation.
The United States is ranked 11th in GDP, which is very healthy considering that is has been growing and we should expect it to continue growing. America’s most recent GDP per capita statistic shows that we are at $54.6k . Germany’s GDP is healthy considering its population density. Germany ranks number 16 in the world for GDP Per capita at with 46.4k per capita (OEC.edu). The United States GDP increased by the thousands showing a large increase in the flow of employment throughout the country. Meanwhile Germany’s GDP has increased aswell but not at the same rate with major drops in the past 50 years. The statement is surprising due to fact that their unemployment rate is lower than that of the united
World War II had left the United States into an economic nightmare, but its resilient nature allowed a hasty return to glory. The United States entered the late 1940's as the strongest, most stable and powerful economy in the world (Wikipedia). Trade surplus and booming business's engulfed the country as the nation initiated into a new period of economic miracle. The deciding factors in this were the record breaking trade surpluses and the raising real income and investments into foreign business. Rising productivity and lowering unemployment allowed the nation to conjure a time where confidence in business and government reigned supreme. in business and government grew greatly, as large industrial corporations accounted for vast portions of the national income.
Steve's salary while being the CEO of apple was $1 a year. Did you know that? He tried to show and teach his employees that money has no value. Although, he did own the majority of the shares in Apple, and that makes up for his $1 a year salary by A LOT. -- That is besides the point.
Today, the system of the United States’ economy is capitalism. The definition of capitalism is “the economy system in which businesses are owned and run for profits by individuals and not by the states” (Longman 261). This system of economy reflects the Puritans’ life in the USA. The Puritans landed on uncultivated land several centuries ago. To establish all the milieus similar to Europe, Puritans had to do a lot of things. However, they did not have a government like Europe because they did not want to be subordinated under a king’s or dictator’s power.
Imagine being in a world where people are paid in cash bonuses, stock options, or generous severance pay when fired from their job due to a company merger, are asked to leave, or choose to retire. This happens to be a reality for many CEO’s and top executives of companies. We live in an economy where mergers and take over’s have become common, and to allow this option for the highest paid employees of a company is arguably unfair. While researching golden parachutes, I formed questions due to the circumstances surrounding this executive option. For example, why should CEO’s, who live very comfortably, be given a compensation package for losing their position due to a company merger or retirement when employee and shareholder’s futures are at stake? Is it fair for the rich to get richer when numerous employees below top executives are dealt the same fate from a merger and shareholders’ investments are at risk but neither receive a form of additional compensation? Of course, there’re those who support the issuance of golden parachutes, arguing they can persuade a possible company merger to not take place due to the costs associated with a top executives golden parachute package. Another supporting point for golden parachutes is, they can make it easier for higher up executives, like CEO’s be absorbed into the future merged company. I will be addressing the point of whether CEO’s and other executives deserve to be awarded a Golden Parachute option by their company. As well as a brief background of Golden Parachutes and my stance on them. They’re a very important part of our growing economy and will always be considered in a merger/takeover if awarded to executives.
First, population plays a large role in every country’s economy. USA’s population is almost 280 million people, whereas, UK’s population is a little less than sixty million people. However, due to the difference in land area of the two countries - UK: 244,820 square kilometers; USA: 9,629,091 square kilometers - the United Kingdom is much more crowded than the United States. Even with these differences the two countries have similar age breakdowns and life expectancies of both males and females. The GDP per capita in the United States is $12,100 more than that of the United Kingdom.
The United States has a corrupt system of money hungry companies that care very little to not at all about the American people and what they provide them. This capitalist society has led a nation to a time of great corruption. Corruption in places one would never think to look, but have right before their eyes.
America has a capitalist economic system that allows private ownership of business and property. This freedom allows citizens the opportunity for financial success. All businesses and institutions of the Russian socialist economy were owned, regulated, and operated by the government.
Sumo, V., & Weitzman, H. (2013). Are CEOs overpaid? The case against. Retrieved from Capital Ideas: http://www.chicagobooth.edu
The United States of America is a great country. It is possibly the longest standing free nation in the history of the world. The founding fathers that constructed our form of government and the Constitution were genius minds. Our republic was founded with an economic system, which we call capitalism. Unfortunately, capitalism is under attack today in the United States. The U.S. must return quickly to a pure capitalist financial system or risk economic ruin.
We now know a few things about CEOs. Their job is to make their organizations look good, however troubled and ineffective they might be. They do not feel obligated to divulge troubling information that might affect public confidence, cause valuable employees to leave, or make it difficult to recruit in the future.
Seitel stated Circuit City’s management responded to the CFO’s departure by offering an additional cash in of $250,000 on top of his $1,000,000 a year (p.218). Management was more concerned about losing one high up employee, but did nothing to help preserve the jobs of 3,400 sales employees. Management should have been counseled to treat all employees with equality and dignity regardless of position. Interestingly, “The firings…are expected to reduce expenses for the electronics retailer by $110 million in fiscal year 2008” (Mui, 2007). In comparison, Circuit City’s CFO’s salary was $1 million. One top-level manager’s pay was almost equal to the total expenses that firing employees cut. This showed that lower level employees are dispensable and not as valuable to the company as a higher level employee
Corporations have far more power than most Americans know of. Large and powerful corporations dominate the American economy. Corporations have a lot of power and influence in the government, it’s possible that they have more influence than government. With so much power and control, corporations are involved with many factors of everyday life. Corporations are involved in food, jobs, water and even our healthcare system. With so much power and control comes problems. Corporations cause major issues in all of these areas.
In conclusion, this case described a company that started out very strong, but as soon as they seen a decline in stock prices they fell apart. When the stock prices fell the CEO, Kozlowski started making poor choices, such as falsifying financial information and stealing from the business. From my observation, companies that give out large bonuses for reached goals find themselves fighting with executives that put their morals aside for