In its annual issue on executive compensation Forbes magazine in 2007, reported that "the chief executives of America's 500 biggest companies got a collective 38% pay raise last year, to $7.5 billion.Leading the pack was Steve Jobs of Apple, Inc. with total compensation of $646.6 million. CEO's pay has been a hot topic for the last couple of years and looks to continue to be in the news. University presidents are now also getting in the news with many of them earning in excess of $1 million annually with expense accounts as high as $700,000.
What is your view on executive compensation? Is it too much? Is it justified? Is it the result of the CEO appointing friendly colleagues to the board who willingly support pay increases for their friends? Is it simply the free market at work?
What do others say about CEO's pay? Cite at least one credible external reference on each side of this issue in stating and justifying your position. Review your peers postings and comment on whether you agree or disagree with their positions and defend your own position.
Please cite at least one source.
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OTA 105878/Xenia Jones
CEO Pay Controversy
The recession and current economic times has brought the issue of Executive and CEO salaries to the forefront. Job creation and employment issues due to tanking economies have concurrently kept so many people all over the world, not just in America, out of the workplace. This means that the economic resources of many have diminished while the most marginalized have entered into the state of chronic poverty and even homelessness. Side by side with this realities, the lives, benefits and financial recieved by executives, even those from banks and financial institutions that have led to market crash and unemployment remain high, and, when put in the context of poverty and recession-related social realities, even scandalous.
Now, executive pay is not just salary - it is a mixture of salary, bonuses, shares and call options to buy/acquire company stock. When executives agree to lead and take on roles for companies, they must be vested in its success to do a good job, to steer the company right. Companies therefore must attract the right talent in and to keep them productive and happy where they are, they are offered very attractive executive pay packets. Consider for example Steve Job's $646 million - a ...
The solution discusses the topic of exorbitant CEO pay/compensation,looking into the varried reasons why this is controversial as an issze in organizations and a topic of interest for human resource management.