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CEO Salaries - Essay Example

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In the face of global economic crisis, the world is now looking at the various factors that contributed to the ongoing economic downfall of the strongest economy in the world – the United States. One of these factors being looked at is the excessive pays that the US’s big companies give to their Chief Executive Officers (CEOs)…
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CEO Salaries: Should They Be Brought In Line With Employee Salaries? In the face of global economic crisis, the world is now looking at the various factors that contributed to the ongoing economic downfall of the strongest economy in the world – the United States. One of these factors being looked at is the excessive pays that the US’s big companies give to their Chief Executive Officers (CEOs). Despite the non-disclosure policy of companies regarding their CEOs compensation packages, proxy indicators used by credible research outfits have yielded an alarming picture of a US CEO paid 364 times as the average
worker (Paywatch by AFL-CIO, 2008).
Should this trend in CEO salaries continue or not? My personal opinion is that the CEOs, to a certain degree, should be given compensation packages that are commensurate to the burden of responsibilities and accountabilities that rest on their shoulders as the top decision-makers of companies. To a certain degree simply means that the CEOs’ compensation should be much higher, say at least 150 times that of average workers’, but not as excessively high as 364 times, as is the reported trend now.
The CEOs, who studied and worked hard to earn the position, deserve to be paid for their competence, which lends integrity and credibility to the companies they lead. Besides, they spend almost every waking hour working for and in behalf of the companies they head, sacrificing personal time for pleasure, for families and loved ones. They make decisions, mostly risky ones, of which they take full responsibility for the consequences. Although they receive the accolades for every success, yet they also take all the blames and the ire of stakeholders for every failure. It is their heads that roll first on the ground, which, once they lose, are almost impossible to recover and start anew.

Works Cited
Executive Compensation vs. Workers; An Overview of Wages, Pensions and Health Benefits of Rank-and-File Workers and Sky High Executive Pay. By Democratic Staff of the Financial Services Committee. pdf file from www.Accountability-Central.com, retrieved October 25, 2008.
Fishman, Ray, Khurana, Rakesh and Kropf, Matthew Rhodes. Governance and CEO Turnover: Do Something Or Do The Right Thing? A Harvard Working Paper, 2005. (in pdf file)
Heskett, James. Is There an "Efficient Market" in CEO Compensation? Harvard Business School Working Knowledge, August 1, 2005. [http://hbswk.hbs.edu/item/4930.html], retrieved October 25, 2008.
2007 Trends in CEO Pay, [http://www.aflcio.org/corporatewatch/paywatch/pay/index.cfm], retrieved October 25, 2008. Read More
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