Are CEO's Paid Too Much?

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Are CEO's Paid Too Much?

OUTLINE

This report explores the issue of the pay that top executives make, and the reasons why they do. It also suggests improvements that can be made to make the system better. High Pay Seems Small When Compared To Company Profits Many companies pull in profits that are extremely high. When an employee of such a companies salary is compared to the amount of profit that the company earns, it starts to seem reasonable. It only makes sense that if the employee is directly responsible for the success of their company, then they deserve to get their payback. It seems ironic, but many salaries even look small once compared with a companies profits. Top Executives Are Under A Lot Of Pressure Being the CEO of a company is not an easy job. There is all kinds of pressure for a person in such a position to succeed. If they do not, then it is their job on the line. Therefore, they deserve to receive a large sum of money for the work that they do. It is the only way to compensate these employees for the tremendous strain that their job puts on them. It is essential that the employees get paid the amount of money that they deserve. Pay Should Reflect Performance When CEOs are being given big paychecks, they are expected to perform at a high level. There success is impeccable. However, this does not always happen. There should be some way of connecting pay to job performance. The best way of doing this would be to award bonuses to those workers who are at the top of their class. This would not only motivate workers to do a good job, but also reward the employees that do succeed.

TOP EXECUTIVES DESERVE THE MONEY THAT THEY MAKE

INTRODUCTION

It is a well-known fact that many people holding high positions in companies make an exorbitant amount of money. Some, however, say that they do not deserve the amount that they are paid. They feel that for the amount of work that is done by these executives, their paycheck is simply too high. Also, they believe that these high paid workers often do a mediocre job, while still managing to reap the benefits of being an executive. While these are viable arguments against this issue, the other side of the spectrum shows that this is not so. There is an equal amount of evidence, if not more, that suggests that executives earn every penny of their paychecks. The CEOs of companies are under an extra...

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...oopholes.

3. The world on a whole, should agree on a standard level of pay for executives. It

is not fair that people in countries other than the US, receive 1/3 of the pay,

for doing the same job. This would help to give the executives around the globe,

the amount that they should be getting.

4. It should be easier for a corporation to get rid of an unwanted employee. Right

now, many are tied into contracts that require a large sum of money be paid if

the employee is released early. There needs to be escape clauses if that

employee performs lower than expectations. This will keep only the best

employees running businesses, meaning that these companies will be more

successful.

If all of these ideas are implemented, then the world of high paid executives will surely run smoothly, without controversy and dispute concerning amount of pay.

BIBLIOGRAPHY

1. "Rich-Baiting Time," National Review, 62 May 5, 1996

2. "Random Numbers," MacLean’s, 42 May 9, 1994

3. "Giving Capitalism An Obscene Reputation," National Review, 35 May 9, 1994

4. "On The Right," Economist, 62 June 3,1995

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