Communication in Economics - Essay Example

The economists on the other hand estimated that that over 10 million dollars are spent each year as an average payment package for the chief executives in only big companies. The economists believe that the people who are on the receiving end of this kind of enormous transfers of the shareholders end ironically want the CEOs to continue. The economists have put it across that letting the excessive pay escalate every year badly hurts the already battered reputations of the American chief executives and from their point of view the silence has been very baffling.

The economists also believe that there should be an inter4nal pay equity in every single company so that to avoid this perception that there are better people in the highest realms of business. The economists have also clearly said that with all the scandals that have been occurring in the recent past the CEOs only care about themselves and the idea that they create wealth for their shareholders is seen as the most ridiculous thing. This is true since most of them do not actually do the physical work themselves but their employees do the work and hence they are the ones who have created wealth for the shareholders from the type and the quality of service they provide.

The economists further believe that without the presence of the lower level employees the CEOs would not have the companies at all because they would really have an awfully hard time in doing all the company's' jobs at once. Another very interesting issue is that the CEOs in America suggest what they would like to receive as their payment package. It then gets to the human resources person who later gets a consultant and it works so well that the CEOs get what they had implied or what they think they deserve.

This makes the CEOs be highly respected by their peers. The economics think that it would be very fair if all the people were paid the salaries that they think they deserve by the companies that they work for. Since paying the CEOs hefty amounts of money leaves the economists wondering what about the people who have impacted the CEOs lives and the teachers who taught them the basic math and even reading. This people do not make millions in a year but they have helped in the creation of who the CEOs are today and if given a chance every one of these people who have worked tirelessly would like to make millions as the CEOs do but it just can't happen.

(Noah, September, 1991)The economists suggest that the society has been playing a significant role in allowing the CEOs get much more power than anyone else and they assume that they deserve the credit for building their million dollar companies. The CEOs however play an insignificant role in sustaining the companies and in most instances they do not have to make as many decisions as the board members do or as much work as the secretaries. All the actually do is simply watch and monitor the stock prices and clearly ensure that they are still earning at least a seven digit salary.

The boards on the other hand have been made to accept the logic that the CEOs should be in the top half in their pay and if it is not so this leaves an implication to the to the general public