SHOULD TOP EXECUTIVES MAKE THE MONEY THEY

DO. Essay, Research Paper

ABSTRACT

This report explores the issue of the pay that top executives make, and the reasons why

they do. It also suggests improvements that can be made to make the system better.

High Pay Seems Small When Compared To Company Profits

Many companies pull in profits that are extremely high. When an employee of such a

companies salary is compared to the amount of profit that the company earns, it starts to

seem reasonable. It only makes sense that if the employee is directly responsible for the

success of their company, then they deserve to get their payback. It seems ironic, but

many salaries even look small once compared with a companies profits.

Top Executives Are Under A Lot Of Pressure

Being the CEO of a company is not an easy job. There is all kinds of pressure for a person

in such a position to succeed. If they do not, then it is their job on the line. Therefore,

they deserve to receive a large sum of money for the work that they do. It is the only way

to compensate these employees for the tremendous strain that their job puts on them. It is

essential that the employees get paid the amount of money that they deserve.

Pay Should Reflect Performance

When CEOs are being given big paychecks, they are expected to perform at a high level.

There success is impeccable. However, this does not always happen. There should be

some way of connecting pay to job performance. The best way of doing this would be to

award bonuses to those workers who are at the top of their class. This would not only

motivate workers to do a good job, but also reward the employees that do succeed.

TOP EXECUTIVES DESERVE THE MONEY THAT THEY MAKE

INTRODUCTION

It is a well known fact that many people holding high positions in companies make an

exorbitant amount of money. Some, however, say that they do not deserve the amount

that they are paid. They feel that for the amount of work that is done by these executives,

their paycheck is simply too high. Also, they believe that these high paid workers often do

a mediocre job, while still managing to reap the benefits of being an executive. While

these are viable arguments against this issue, the other side of the spectrum shows that this

is not so. There is an equal amount of evidence, if not more, that suggests that executives

earn every penny of their paychecks.

The CEOs of companies are under an extraordinary amount of pressure. They face the

task of making sure that a company pulls in a profit, or possibly losing their job. There are

few, if any other positions that put an employee in this situation. Important decisions are

made by them everyday, many of which decide whether a company will prosper, or go

under. Many of these men had to work their way to the top. They usually have extensive

business backgrounds, and know their field well. There are very few people qualified, or

knowledgeable enough to perform well in executive positions. That makes the ones that

are, a hot commodity. Thus allowing them to demand the high pay that they earn.

High Pay Seems Small When Compared To Company Profits

When the public sees a salary that they consider to be too big, they are usually looking at

only half of the picture. It is impossible to look at just the salary, without taking any other

factors into consideration. One must look at the amount of earnings, compared to the

profits of the company.

For instance, Robert Allen, who runs ATT was recently pointed out by 60 Minutes as

being an overpaid executive. Their major problem was that he had been responsible for

laying off 40,000 employees, while still managing to give himself a large pay increase. At

first glance, this situation may appear to be one involving a greedy and overpaid executive.

However, upon closer examination, it proves to be much to the contrary. The situation

wherein the 40,000 employees were laid off, was not a matter of getting rid of people for

an unfounded reason. It was more a matter of getting rid of an excessively large work

force, and getting the same job done with fewer people. This not only benefited ATT, but

also, the customers receiving service from ATT. “For exactly the same service in 1996,

the average family will be paying $11 less.”1 This is due to the fact that the consumer’s

money was not going to a larger number of employees, but going directly to the minimal

cost of performing the job. Robert Allen has a total salary of 20 million dollars. This

salary seems to be extremely high when put as a statistic by itself. This changes, though,

when you compare it to the total earning of ATT. His salary calculates to be 1/3,450 of

ATT’s gross. All of the sudden, the 20 million dollars does not seem like such a high

figure after all. Another factor that serves to make his salary a valid amount, is that even

if his total pay was split between all of the laid off workers, they would only recei

Внимание, отключите Adblock

Вы посетили наш сайт со включенным блокировщиком рекламы!
Ссылка для скачивания станет доступной сразу после отключения Adblock!

Скачать