Purchase Solution

American Capitalism and Business Ethics

Not what you're looking for?

Ask Custom Question

American Capitalism: Is a large discrepancy between executive pay and that of the average worker unfair to the worker? Is it unfair to increase a CEO's compensation at the same time that he or she downsizes the workforce? What is an ethically justifiable way to determine the pay of a CEO of a large corporation? How do you explain that?

Purchase this Solution

Solution Summary

This solution discusses ethically justifiable ways to determine the pay of a CEO for a large corporation. I also discuss if the discrepancy in pay based on position is ethical and issues related to CEO compensation.

Solution Preview

There are a lot of factors that have to be taken into consideration with executive compensation issues. First of all, we can't justify paying a CEO just a few dollars above what we pay a worker. The CEO must be the highest paid official in the company. The other workers and positions work up to the pay level that the CEO has, when the worker becomes CEO (if that is their goal). The CEO has to have the highest pay, which sets the pay ceiling for the company. The CEO essentially bears the weight of the company's success, or lack of success, which is one of the reasons why CEO compensation is high. In addition, most CEOs, and all CEOs of large companies, have been through extensive education, training, and have developed the skill set that we see in CEOs. When we set CEO compensation, we're ideally setting it at a level that matches the level of academic experience and training necessary to become a CEO. Let's look at a CPA, as ...

Purchase this Solution


Free BrainMass Quizzes
Balance Sheet

The Fundamental Classified Balance Sheet. What to know to make it easy.

Basics of corporate finance

These questions will test you on your knowledge of finance.

Six Sigma for Process Improvement

A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.

Paradigms and Frameworks of Management Research

This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.

Understanding the Accounting Equation

These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.