The Concept Of Executive Compensation

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Trends in Executive Compensation The notion of executive compensation is a contentious issue, particularly during times of economic slowdown. According to Business Dictionary, executive compensation is “the financial payments and non monetary benefits provided to high level management in exchange for their work on behalf of an organization.” Examples of high level management include presidents of the corporation, chief executive officers (CEOs), chief financial officers (CFOs), vice presidents, managing directors and other senior executives (Business Dictionary). It is understood that these individuals are of special interest, because their decisions influence the strategic direction of the company. Over the last 20 years, academic …show more content…

The board has reappointed Chakma to a second five-year term extending to June 30, 2019" (CBC News, 2015). This deal led Chakma to receive double his 2013 salary, a move which left individuals upset as this decision comes at a time when reportedly, the core mission of the university is being compromised by a broken budget model. Given these concerns, students received an email from Chakma himself voluntarily offering to refund half his 2014 salary. Examples of high compensation during times of economic uncertainty and tenuous work are difficult to justify.
1. Research Purpose
The purpose of this paper is to gain more insight on the trends associated with the high and rising pay levels of CEOs. I chose to research the topic of executive compensation because I am interested in the pay practices (and trends in pay practices) for chief executive officers (CEOs). There are many forces that contribute to the growth of total compensation to top managers. The wage gap between executives and the average worker in many organizations is unfathomable. An infographic exists online depicting the ratio of executive to average worker compensation for many organizations (Payscale, 2015). This infographic highlights the harsh reality of executive compensation. For example, CVS Caremark CEO-to-average worker pay ratio is 422:1 (Payscale, 2015). Thus, executive pay has been under scrutiny by many; some who believe the concept is unfair and

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