The Compensation of CEOs

The compensation of CEO is the figurative issue with no penalty for most of the people. However, the increase in the compensation of executives has led to increased growth of inequity among the United States. The gap between the top earner and the employees is very wide and yet everyone should enjoy the fruit of the company performance. Other individuals have argued that the compensation of CEO should be allowed due to jobs that they perform. Companies should look for other ways of determining compensation but not the current formula that involves competition in paying their top executives. The companies should analyze their internal financial power to check if they are able to compete with other companies in terms of compensation. Lastly, every employee within an organization is entitled to a good compensation and not the top management alone. The ratio of 350-to-1 needs to be relooked again in details. (Frydman & Jenter, 2010).

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References

Frydman, C., & Jenter, D. (2010). CEO compensation (No. w16585). National Bureau of Economic

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Mantel, B. (2015). executive-pay. SAGE Business Researcher.

http://dx.doi.org/10.1177/2374556815598978Mishel, L. & Davis, A. (2015). Top CEOs Make 300 Times More than Typical Workers. Pay

Growth Surpasses Stock Gains And Wage Growth Of Top 0.1 Percent. Retrieved from

http://www.epi.org/publication/top-ceos-make-300-times-more-than-workers-pay-growth-

surpasses-market-gains-and-the-rest-of-the-0-1-percent/

West, M. (2016). How Should You Set executive Pay, pp. 5th Jan 2016. Retrieved from

http://www.bbc.co.uk/news/business-35238299