The Executive Officer, Ron Johnson

3139 Words13 Pages
INTRODUCTION Former J.C. Penney Chief Executive Officer, Ron Johnson, spent less than 18 months in the company’s top job. In 2012, at the time of his departure, Johnson had earned more than $53.3 million in salary and benefits for his short stint at the company (Smith and Kantz, 2013). In the same year, Abercrombie & Fitch CEO, Michael Jeffries, earned $48.1 million while David Simon, CEO of the Simon Property Group, banked $137.2 million (Smith and Kantz, 2013). Salaries such as these have become increasingly common for CEOs of large American companies. On top of these generous executive salaries, CEOs also receive very lucrative severance packages should they decide to resign or face lay off. At the same time, the average income for…show more content…
Social and political movements, such as Occupy Wall Street, have served to galvanize the debate over CEO pay in the United States. While no one would argue that today’s executives earn more than ever before, a question arises over whether or not limits should be placed on the amount of compensation they should earn. Those who would oppose the motion of placing limits on the amount that executives should earn argue that CEOs pay is commensurate with their performance and the high-risk nature of their job. Similarly, those in favour of the motion would argue that such high salaries only serve to encourage CEOs to engage in risky behaviour while imposing significant social and economic costs on everybody else. This essay will argue that, given the significant economic and social costs of skyrocketing executive pay, that it is imperative that government place limits on the salaries of CEOS of publicly traded companies. In doing so, this essay will trace the rise of executive pay in the American economy, critically examine the issue of whether or not CEOs earn their paycheques and explore the high social and economic costs imposed on others when the wage between is so high. The essay will conclude by examining different options available to government in their attempt to rein in astronomical executive pay. A SHORT HISTORY OF
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