Ceo Compensation

1988 Words8 Pages
| CEO Compensation | |
Introduction

Recently CEO compensation packages have high rocketed making many people question the validity of their compensation. Many questions have been risen to find out if CEO compensation if excessive. Through this paper we will discuss why we feel CEOs in America are grossly overpaid. We will start off by talking about the ethics on the matter and then the pay-performance connection within organizations. We will also touch on the real wages of employees and how America compares to international companies. We will finish our argument with some recommendations that we feel will help make organizations as a whole better.
High Pay, Low Performance
Financial Crisis

It is shown in several studies that
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CEO Compensation and Virtue Ethics

Another way to look at CEO compensation is to see if it agrees with virtue ethics. There is Aristotelian virtue oriented approach to ethics and was applied to business by Robert Solomon. In this, Solomon argues that business is primarily a practice, in which a community of individuals engages in a cooperative endeavor to deliver goods and services for the good of society. In this practice certain virtues such as integrity, moral courage, and justice are essential to the practice of business. Also, in virtue ethics justice implies that executive pay should be more modest across the board, regardless of company profitability. (Kolb, 2006, pg.101-115)
CEO compensation is not “fair” top 25 CEOs had an average annual pay of $32.7 million, which is more than 900 times the annual salary of the typical US worker. In an era which many companies are cutting costs by laying off employees, such compensation seems to be unjust. Solomon argues that workers may not be loyal to someone they perceive as being unfair. At some level, trust and loyalty are needed for a company to prosper. Without these, this company will be left with a group of resentful, unhappy employees.
Even if the CEO’s employees are “satisfied” with their minimum wage salary this satisfaction does not
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