Is Executive Compensation to High
- Submitted by: dluipasco
- Views: 1132
- Category: Politics: Economics
- Date Submitted: 03/26/2010 08:16 PM
- Pages: 14
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Summary
Is executive compensation too high?
Problem Statement
We need to solve issues related to executive compensation and if CEO’s get paid too much. We believe that CEO’s get paid too much in relation to others in the company. They should get paid more than regular employees considering their position but some of the bonuses and compensation are a bit much. However, CEO’s make huge choices on a day to day basis as well and should be compensated for the amount of stress that would be involved in these positions of power. How much really is the right amount to be distributed to executives?
Stakeholders
When we think about stakeholders many things come to mind. They are shareholders, employees, financial institutions, as well as the chief executive officer himself, and other companies that they do business with, these play and integral role in the company and its operation.
Shareholders
Shareholders are concerned with executive compensation because they buy shares to invest in the company. When these CEO’s are giving themselves huge salaries and bonuses it is taking away from the shareholders wealth and share price is bound to decrease. They also have a vested interest because they provide much of the capital that the company has. Shareholders have voting rights in the company and should be listened to because it is their money in the company.
Employees
Employees are stakeholders in the company and are directly connected to executive compensation. They are on the frontlines of the company and are the ones out making the deal, finding new customers and providing the customer service to clients. If the employees were not out working on the frontlines of the company, they would not turn profits. Employees are a large stakeholder because they produce the profits which in turn provide the executive compensation.
Financial Institutions
Institutions such as Banks would be large stakeholders as well. They provide capital to other banks at...
Is executive compensation too high?
Problem Statement
We need to solve issues related to executive compensation and if CEO’s get paid too much. We believe that CEO’s get paid too much in relation to others in the company. They should get paid more than regular employees considering their position but some of the bonuses and compensation are a bit much. However, CEO’s make huge choices on a day to day basis as well and should be compensated for the amount of stress that would be involved in these positions of power. How much really is the right amount to be distributed to executives?
Stakeholders
When we think about stakeholders many things come to mind. They are shareholders, employees, financial institutions, as well as the chief executive officer himself, and other companies that they do business with, these play and integral role in the company and its operation.
Shareholders
Shareholders are concerned with executive compensation because they buy shares to invest in the company. When these CEO’s are giving themselves huge salaries and bonuses it is taking away from the shareholders wealth and share price is bound to decrease. They also have a vested interest because they provide much of the capital that the company has. Shareholders have voting rights in the company and should be listened to because it is their money in the company.
Employees
Employees are stakeholders in the company and are directly connected to executive compensation. They are on the frontlines of the company and are the ones out making the deal, finding new customers and providing the customer service to clients. If the employees were not out working on the frontlines of the company, they would not turn profits. Employees are a large stakeholder because they produce the profits which in turn provide the executive compensation.
Financial Institutions
Institutions such as Banks would be large stakeholders as well. They provide capital to other banks at...