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.
Anthony Petrello is easily recognized as the CEO, President and Chairman of Board of Nabors Industries ltd. According to an overview published on Zoomifo.com, the company runs the largest fleet of drilling rig in the US. Petrello was appointed as board member of the company in 1991. He was later named Nabors Industries President and Chief Executive Officer in October 2011. Petrello holds a Juris Doctor Degree from Harvard Law School as well as Master and Bachelor degree in Mathematics from the prestigious Yale University. Anthony Petrello holds board memberships in various companies and organizations including; Nabors Industries Ltd, MediaOnDemand Inc, Texas Children’s Hospital, Houston Museum of Fine Arts and Stewart & Stevenson LLC. He is also a member of National Petroleum Council and Council on Foreign Relations.
According to Plato in an ideal society the ruler should be paid no more than four times what the lowest member of that society get paid. In 2012 the CEO compensation pay was 354 times average salary of a CEO for example Thomas Montag CEO of Bank of America received nearly 30 million dollars, Lloyd Blankfein, CEO of Goldman Sachs and Walid Chammah, CEO of Morgan Stanley were each given about $10 million in compensation during the financial crisis. The CEO of these financial institution steered the United States into worst economic crisis since the Great Depression which lead to lose of millions of jobs, homes and retirement savings.
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.
Tilman Joseph Fertitta is an American entrepreneur, television personality, and CEO and owner of Landry’s, Inc. In 2013, Forbes placed him at No. 235 on the list of the wealthiest Americans after receiving a net worth estimated at $2.4 billion. Fertitta is also the chairman of the Board of Regents of the University of Houston System. After all of these achievements were recognized by CNBC, Tilman Fertitta was offered a reality tv show to be called “Billion Dollar Buyer.”
As previously discussed in this paper, it is unethical for CEOs to be paid so much when compared to other employees their respective organizations, outlearning their peers as of 2011 by a ratio of 201 to 1 since 1965 (Mishel, Bivens, Gould, and Shierholz, 2012). Appropriately,
For the victorious execution of the commerce and for the correct or utilized use of invested money, stakeholders rely on the CEO. Therefore, pay of the CEOs is vital for the stakeholders of the John Deere and Caterpillar.
Ben Fielding. Who can tell what he will do next? Ambitious and driven to always achieve the best, he is at the top of his game. Every monday he reviews his goals, gets ready and goes to work ready to accomplish anything. “Everyone knew Ben was on the fast track to CEO… he’d be sitting in the big chair right on schedule.” (Alcorn, pg 18) Constantly busy and pushing everyone around him to be at their best he became the prime candidate for CEO. Ben's forte is business and he loves the thrill of it.
Anthony Petrello was born in Newark, New Jersey. He did not have the privilege to have been brought up by wealthy parents but was very proud of the background. Newark people are famous for living humbly and also for their love and compassion. They have also adopted the value of caring for one another despite the challenges they mostly undergo through.
According to Gallo (2011, p. 4), Jobs was named the best-performing CEO in the world by the Harvard Business Review. Jobs was given the title as he delivered “a whopping 3188% industry adjusted return (34% compounded
Warren Buffet is the Chief Executive Officer (CEO) of Berkshire Hathaway (http://www.berkshirehathaway.com), a holding company for several businesses (Berkshire Hathaway, n.d.). Fortune Editors (2014) named Warren Buffett number four on The World’s 50 Greatest Leaders (2014) list for his leadership techniques with his 300,000 employees. Buffett is also a proponent for philanthropy and earmarks Berkshire Hathaway shares to distribute to several foundations annually (Berkshire Hathaway Inc., n.d.). In 2014, Buffett led his followers with a hands-off style empowering his managers to act as owners (Fortune Editors, 2014). However, Buffett did not begin his career with a hands-off style; his leadership techniques evolved as he became a seasoned CEO. Over time, Buffett shifts from a unilateral power to a mutual power (Kelly, 2013).