COMPENSATION OF CEO’S AND EXECUTIVES: EXCESSIVE?

COMPENSATION OF CEO’S AND EXECUTIVES: EXCESSIVE?

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  • Date Submitted: 02/05/2016 11:33 AM
  • Category: Business
  • Words: 1913
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Running Head: COMPENSATION OF CEO’S AND EXECUTIVES: EXCESSIVE?






COMPENSATION OF CEO’S AND EXECUTIVES: EXCESSIVE?
TREVOR S NICHOLS
DECEMBER 9, 2013
Abstract
Executive compensation has skyrocketed in recent years. Remarkably, the ratio of average CEO pay today is in the range of about 400 to 1. With the financial crisis and failures of major US corporations such as Lehman Brothers and Merrill Lynch, stemming from the 2008 housing market collapse, public outrage has grown over over the size of pay packages. Executive Pay-For-Performance has started to gain momentum. Additionally, various reforms, including the linkage of pay to long-term performance, claw-backs, shareholder involvement, and capping many of the lavish perks are becoming popular solutions to this problem.
















The American Dream, a phrase by historian James Truslow Adams in 1931, describes it as “that dream of a land in which life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement.”(Smith, 2009, para.1). To say it another way, a person lives the American Dream through hard work, courage, determination and sacrifice to provide for their family. In today’s society, this dream has held true for the upper echelon of the corporate world, namely the executives or directors of a business. “In 2004, the average CEO compensation was an incredible $9.2 million!” (Burton and Weller, 2005, pg.1).

The Chief Executive Officer
“The Chief Executive Officer or ‘CEO’ is the highest ranking executive in a company. Responsibilities include coordination of strategies, corporate decision making on major issues, overseeing the general direction of a company, and acting as the chief liaison between the operation of the company and the board of directors.” (Investopedia, n.d., para.1). The first word of the title, chief, says it all. In addition to the high level of responsibility, the CEO will often have a...

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