Job Description Of A Ceo

In “The Overpaid CEO” Susan Homberg and Mark Schmitt bring to attention how CEO pay in America is ridiculous in numbers as opposed to other parts of the world. Looking back, in the nineteen hundreds CEO pay was relativity average. As businesses and companies began to expand there was a demand for higher pay. Between 1978-2012 CEO pay increased by 875%! Many rules and regulations were put in to place to limit the pay of a CEO, such as the Securities Exchange Act that I will explain later on, regardless CEO pay kept getting higher and higher as many loopholes were found. Bonuses pay a large part in the salaries of CEOS’, as an effect CEOS’ tend to partake in risky behavior in order to score those big paychecks.

This paper will discuss the reasons why CEOs are not being overpaid. It will apply the utilitarian ethical principle to many a few aspects to CEO compensation and whether or not it is justifiable for such pay. The paper will look at whether or not their performance is justifiable for the pay because they play such a big role in the livelihood of the company along with the principle agency theory and how it is being addressed for the benefit of the shareholders and others involved with the company, the supply and demand of the CEOs, and the paper will describe the comparison of other professions to help link the idea of CEOs being fairly compensated.

Executive Compensation. I’m in agreement with Thomas Piketty that the one cause of rising inequality in the United States “the rise of supersalaries” for top executives (Piketty & Goldhammer, 2014, p. 298). The average American estimates CEO to worker pay ratio at about 30-to-1, which is more than 4 times what they believe to be ideal. The career review site Glassdoor reported from 2014 data that the average pay ratio of CEO to median worker was 204-to-1 and that at the top of the list, four CEOs earn more than 1,000 times the salary of their median worker with the very top pay ratio of 1,951-to-1. In some cases a CEO makes in one-hour what it takes the average employee six-months to earn. In comparison, the Washington Post reported for the

According to the Wealth Inequality in America video, the CEO of a company makes 380 times more than the average paid worker. With these numbers, the average worker must work over a month to make what the CEO makes in an hour. That’s insane, there is no way that the average worker does not work as hard as the CEO of the company works, the workers are what make the company what it is. Sure the CEO has worked very hard to get to where they are in the company, but with the way everything else is, can we truly be sure that the way the CEO is getting paid is

The CEO’s compensation should be set on how well the firm performs and should be awarded based on the performance of the stocks in the long run. It is easier to measure performance by the growth rate in the profits that have been reported since intrinsic value cannot be fully

According to a news report written by Catherine Ruetschlin, explains everything needed to know about the economy and the CEO-to-worker pay with the failure it holds. “The report, by the public policy group Demos, concludes the fast-food industry has the most extreme pay disparity of all the sectors in the U.S. economy, with a CEO-to-worker pay ratio now exceeding 1,000 to 1. By comparison, the ratio in the retail sector is about 304 to 1, meaning the CEOs in this sector make about 304 times the income of the average worker. And construction company CEOs make about 93 times that of the average worker.” These companies with extreme pay disparity won’t be losing any money if they raise their minimum wage to $9. The comparison of how much a CEO makes to an average worker is ridiculously large, and the fact that some of these CEO’s are complaining about paying their worker an extra two dollars an hour for their efforts and labor is

There is no doubt that every company should plan to reduce the difference between the CEO salary and the average worker salary because it simply seems unfair and may lead to bitterness and criticism, which will negatively affect the productivity of other employees.

See, Bob Reich isn't the just a single to notice disparity. Indeed, even most corporate chiefs are worried that soaring CEO compensations are askew with corporate benefit, and also normal worker wage. As working mom Nancy Rasmussen says, it just doesn't seem right. "I took a pay cut of $12 an hour. My benefits have gone down," Rasmussen says. Her voice cracking with emotion, she asks, "If you have millions of dollars, why do you need that little bit that I have?" We see it all around us: A CEO gets a huge bonus the same year he lays off hundreds of

1. Do you think the fact that most American CEOs are paid so much more than rank-and-file employees suggests CEOs are overpaid? Explain.

The final reason that the companies are over paying CEOs is that the nonprofit organizations are paying their CEOs very highly. According to Peter Frumkin in his article “Are nonprofit CEOs overpaid?” he writes about “264 big nonprofit CEOs earn a salary of $207,990… and a CEO of the Cystic Fibrosis Foundation earn 389,327” (83). These are a nonprofit companies yet they are paying there CEOs quite a bit of money that could be going toward the cause they are trying to raise for. The CEOs should not be earning that amount of money when it is being given to go towards the cause that they people are giving their money for. A CEO that is supposed to find money to help find a cure for cystic fibrosis is taking a good amount of the money home that

Take severance packages for example. When the average employee in no longer benefitting the company, chances are they will be let go. Besides a final paycheck for hours worked and the possibility of unemployment collection, they do not receive anything else from the company. When a CEO is no longer performing up to standards, they are forced to resign but walk away with much more than a final paycheck. Chuck Prince of Citigroup was shown the door after the company lost $64 billion in market value, yet he left with $68 million and a cash bonus of $12.5 million (Nickels, McHugh & McHugh, 2010). Not only are CEOs paid a substantial amount more for their work, they are paid a substantial amount more to leave the company all together. In 2009, President Obama and Congress put limits on executive compensation of firms receiving money under the federal government bailout programs. The payout to CEOs leaving their companies was limited to $500,000 but it wasn’t for all companies across the board. This new limit only applied to companies who had borrowed money from the government during periods of economic downfall and hadn’t yet paid it back. Despite the decrease in monetary payout, CEOs were still allowed a decent portion of restricted stock which amounted for a fairly large payout when the stock could be sold a few years down the line.

Issue 3: Siding with Ira Kay, I agree with his position on the issue. The “American Dream” is to essentially start from nothing, working up the ladder to gain money, power, and the image of a lavish, executive lifestyle; resulting from hard work paying off and wages that compensate for it. Annual pay and stock incentives for most executives will fluctuate with the company’s performance, as well as their personal efforts. If a cap was to be implemented on a CEO’s salary, what would be the incentive to stay at the helm of a corporation when the financial “glass ceiling” has been reached?

In Peter Eavis’ article “Executive Pay: The Invasion of Supersalaries” the conflict of CEOs and top executives outrageous pay grade is discussed. Even though the “compensation machine” of Corporate America is running smoothly, there are multiple negative and dark undertones. In fact, many people believe that these shocking salaries are the roots of inequality within America. Currently, some CEOs are being compensated millions and millions of dollars as their normal annual salary. Even though the current executive compensation system focuses on performance and can “theoretically constrain pay,” there is nothing stopping the companies from giving their CEOs more. According to the Equilar 100 C.E.O Pay Study, “the median compensation of a

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

Are America's CEOs paid more than they deserve? Many people's answer is a vehement: Yes. That view is reinforced anew every spring, when companies file their financial statements and we learn how much CEOs were paid last year.