In your response present either an argument for changes in the way CEO compensat
ID: 409930 • Letter: I
Question
In your response present either an argument for changes in the way CEO compensation is organized or an argument in defense of the way CEO compensation is organized. Be sure to state your assumptions (remember, they determine your arguments). Be as concise as possible and make reference to specific information from the readings.
Readings: https://www.bloomberg.com/news/articles/2013-04-30/ceo-pay-1-795-to-1-multiple-of-workers-skirts-law-as-sec-delays
http://www.faireconomy.org
http://www.pbs.org/now/politics/executive.html
http://www.nytimes.com/2005/06/19/business/big-paychecks-are-exhibit-a-at-ceo-trials.html
http://www.dailymail.co.uk/news/article-2430180/Ex-Tyco-execs-Dennis-Kozlowski-Mark-Swartz-prison.html
https://aflcio.org/paywatch
http://www.epi.org/publication/ceo-pay-remains-high-relative-to-the-pay-of-typical-workers-and-high-wage-earners/
Explanation / Answer
The basic remunerations, bonuses, incentives and other welfares provided to company CEO’s have outstretched severe queries about the ethical consequences of such remuneration. One apprehension about the extraordinary remuneration level for US CEO’s is to avoid CEO’s from taking such business decisions that can be advantageous to themselves rather than to the business while attaining their performance goals and objectives.
The primary concern with the ethics of elevated executive remuneration is the usage of stock options as an incentive. Latest indication of unlawful practices in some prestigious US organizations has encouraged the enactment of the Sarbanes-Oxley Act of 2002 which prohibits business executives from possessing any kind of incomes or bonuses acquired from trading company stock if they have mislead the public about the financial well-being of the business to raise the stock price.
In conclusion some enquire about the ethics of the elevated executive remuneration whereas the lower-level worker remuneration does not increase at the same proportion as a result there is a constant broadening gap in remuneration at a diverse level in the business for example the Mercer study has found that CEOs approximately enjoyed bonuses of around 120 percent of salary in 2004 while other studies point out that lower level employees earn just about 5 percent of remuneration as yearly bonus.
Even though some contend that executive level positions are justified with high rate of remuneration because of the nature of the employment and the high level of accountability involved whereas others maintain that the gap in executive against lower level worker remuneration has broadened so intensely that workers are under remunerated and may even be tempted to participate in unethical behavior such as embezzlement from the organization.