I think the topic of executive compensation brings a lot of opinions and discussions. I personally think that executives and CEO’s of companies do have important skills that are necessary for their jobs. They do jobs that require a lot from them and they hold a lot of responsibilities. Their pay and compensation packages are definitely reflective of that. I think it is hard to figure out the right thing to do or the right way to pay them. I see why they have the pay that they do, but sometimes it could be a little excessive. But if they aren’t paid enough, these executives and CEO’s will find someone who will pay them enough. You want to pay them to where they will stay and not look elsewhere for work.

I think the reasons that could explain the rise in executive compensation has to do with the ability of CEO’s to negotiate their pay. People in those high positions have the skill and experience to do that particular job. This leads them to be able to negotiate to get whatever pay they think they deserve. They can ask for more money and they are likely going to get it. Companies across the market then need to match this kind of pay in order to attract the specific kind of employees and keep them in the company.

If I had to make changes to executive compensation, I would probably start by looking at the performance of the actual CEO or executive. I think a lot of their pay should be based on how well they are doing and not just because of their job title. There are cases when companies go bankrupt or something happens and the CEO still walks away with enough money. However, thy have an important job and it could be hard to take away the benefits that they are earning. They should be paid more than other employees, but I think it is important that they are not just doing it for the compensation. Overall, the compensation of executives is a hard decision to have to make and there might not be a correct answer to doing it.