What Is Equality In Pay

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.

2. There is no world in which the current CEO salaries would be considered justified or rational. Today, CEOs make about 344 times the average pay of workers which is up from 30 to 40 times about thirty years ago (Doc A). While they should be rewarded for success and advancing their business, there is a point where it begins to hurt both the company and the rest of the economy. It takes money away from taxpayers and is used to increase the personal wealth of millionaires.

Executive pay – excessive pay for top executives is one problem that will not go away. It is a response to public concern about pay rises that are unrelated to effort, plus a number of high-profile cases of failed executives getting pay-offs of up to US $100 million and others having stock options backdated to give them a share of earlier capital gains. This at least tells shareholders exactly what their top executives are earning.

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.

Equal pay is a problem on a global scale. Over 145 countries have a documented pay wage gap (Werft). One would hope the United States would have the smallest wage gap, but in 2016, the United States was in only 45th place in the smallest wage gap (“Rankings”). In fact, most women in the United States only make $0.77 compared to a whole dollar they should earn. The state with the worst wage gap is Louisiana, with only, on average $0.69 for every man’s dollar (“Rankings”). One in three of the 15.2 million families headed by women have fallen below the poverty line, leaving their children to suffer in poverty

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

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

One reason I can agree with this reasoning which happens if you compare the work of someone beneath an executive their pay grade is going to be significantly lower. If you compare the pay rate of a school teacher who has a major impact on lives daily to an executive they are getting paid way below standard. The average pay for an executive is $100,000 as to a teacher’s salary of $50,000 now you do the math on that one. I can clearly say in this event, I do believe that executives remain paid too much in comparison to a

A CEOs whose wealth was tied to a change value of shareholder wealth had a better compensation that a CEO who had a higher monetary compensation. This analysis led to the increase of stock options for CEOs and top corporate executives. However, this type of compensation structure has unintended consequences tied to it. Stock options create incentives for executives to participate in risk seeking activities. It creates a positive gain if the price of stock goes up, but no downside risk. So what value do CEOs offer companies and their shareholders? Just as the NFL places value on a stellar athletic performance and so-called super human ability, so does corporate America. In extremely competitive markets of CEO headhunting, the stakes could never be higher. Companies today are facing lightening fast technological advances, corporate espionage, global competition, extremely tight profit margins, innovative startups and an indiscriminate number of other issues that need to be managed by top executives. Companies not only need leaders, but also visionaries, innovators and calculated risk takers. This combination of person can be extremely difficult to find, employ and retain. When it comes to the question as to whether or not CEOs and top executives are overpaid, the question can irrevocably be answered

There is currently a large wage gap between CEO’s of a company and the regular workers. Companies are not investing their profits in better technology or hiring new employees. This is having a profound negative effect on our economy and creating greater social inequality in our country. So far, strikes and protests by workers have had no effect on corporate compensation practices. Economic prosperity does not trickle down from the wealthy to the lower and middle classes. People need to rally and have their representative pass legislation that will cap executive salaries and increase minimum wage.

Some people argue that it is wrong for CEOs to earn multimillion-dollar salaries while some of their employees are earning the minimum wage or even being laid off. Some suggest that a firm's top earner should earn no more than 20 times what the lowest-ranked employee earns. Prepare a 1,250-word paper analyzing the issue of CEO pay.

Because of their compensation sets the pattern the criticism particularly focus on the CEO’s high pay as well. Just like the previous criticism, there are current complaints which focused on at least two issues: Executives are paid too much and because the connection between executives current incentive-pay schemes are flawed. Because of these issues the company performance at best is mixed and at worst has led to a series of dysfunctional behaviors (Lorsch & Khurana, 2010). As the pay gap between chief executive officers and American workers of public companies grow; the question has aroused as to what drives the pay of the CEO’s and what’s behind the disparity. It is a known fact that it is a big disparity between the pay of other worker and the CEO pay in corporate America but what is the reason this disparity exists? The first major justification is an incentive for performance that is put forth by corporations; this helps explains the CEO pay level. They thought in order to attract the right candidate who will impact the performance of the organization is that they have to pay big. If this happens the shareholders of the company can get a better return on their investments. What has been justified as compensation for executives is to provide them with some form of stock grants as a form of incentive with

Over time there have been many discriminations against age, race, gender, religion, and ethnicity. An ongoing struggle for women that are as equally qualified as men is getting paid less. It is estimated that women are paid twenty percent less compared to their male colleagues. Women have been trying to change these statistics for many years. If women got paid the same as men, it could help benefit the economy, yet females with more education lose money due to the gender pay gap. The biological differences between men and women are inevitable, but there is no reason why a woman should be underpaid for the same amount or quality of work as a man.

With the topic of income inequality becoming more prominent in the media, it is important to focus on the individuals who are taking the most advantage of this: CEOs of business firms. According to the Norton and Ariely (2011), “the top 1% of Americans hold nearly 50% of the wealth, topping even the levels seen just before the Great Depression in the 1920s.” Unfortunately, this number is only increasing with time as a result increasing the gap of average household income in the United States. To further examine pay deviation, it is important to understand the causes for this divergence. In the United States, the CEO of a company now makes 380 times the average worker’s pay in the company (Norton & Ariely, 2011). Therefore, does it mean that

Equal pay for equal work has been a rallying cry to fix the inequalities of pay discrimination based off sex since the early 60’s. The Federal Government has stepped in to try and apply some legislative fixes over time starting with the Equal Pay Act of 1963. This brief discussion focuses on why having an equal pay system with pay transparency is much more beneficial than a system which hides and masks the pay of peers across an organization.