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CEO Salary Discussion

Review the "Last Word: Are Chief Executive Officers (CEOs) Overpaid?" (See attachment). Discuss your thoughts on whether CEOs' exceptionally high pay is economically justified. Explain your rationale. Additional references can be used, aside from the attachment.

McConnell, C. R., Brue, S. L., & Flynn, S. M. (2012). Economics (19th ed.). New York, NY: McGraw-Hill.

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In corporate America, the CEO represents the company and is the most important figure in the hierarchy. If business was a professional sports team, the CEO would be the companies Tom Brady or Peyton Manning or the Michael Jordon who is expected to outplay his teammates and his opponents and win championships. In the corporate world, those championships are not trophies; those championships represent increased stock prices worth billions of dollars.

The article represents two schools of thought on CEO pay; the affirmative thinker who believes that CEO pay is accurate for the requirements of the position and the critic who sees CEO pay as being an unbalanced system that unfairly rewards one team member much more handsomely than all the other members who contributed to the successes (McConnell, et al., 2012).

The other interesting factor in this article is that the author's tone is neutral and remains somewhat vague on the underlying factors for why people agree or disagree with CEO compensation ranges. This article simply gets the conversation started but adds not finality to the situation. So, as a reader, one has to use other resources ...

Solution Summary

The solution discusses the CEO's salary.