Executive Pay Should Be Regulated to Prevent Executives Paying Themselves Too Much

1552 Words Apr 23rd, 2014 7 Pages
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|Executive pay should be regulated to prevent executives paying themselves too much. |

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Table of Contents
1. Introduction 3
2. Case of Bank of America CEO Compensation 3
3. Arguments on Steep Executive Compensation 4
4. Conclusion 6
References 6

1. Introduction

In this period of severe economic recession in Europe and America, executive pay
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Now days the executives are paid rewards on the basis of the risks they faces in the high competitive markets not on the basis of their achievements.
Following are the arguments against the immerse increment in the salaries of the executives:
1. Since 1980 to 2002, the competition and the growth in markets have become tougher and as a result there is a high responsibility. The executives are earning high amount just because they are running and managing companies which are growing very rapidly. Over the years the high increase inflation is generated were the ways in which payment was granted to the people, the change towards the shares from the stock options. T Those two things were happened at the same time. From 2002, the people reacted critically towards the the ways in which these executives were paid. The governance accusations of the shareholders pressurized that these executives are giving protection to themselves and are paid excessively high (Brick et al 2006). Now the executives can be eliminated in an easier way. Companies are paying them because these executives can be replaced very easily. Basically it is the title they paid on the basis of the risks they bear and outstanding performance for the coming year. On the other hand they are paid because stakeholders wanted them to be with the international market. If the companies have to give the response to a problem, there is a counter argument to sustain the option of
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