I understand the initial concept behind executive pay. Executives should be compensated decently because they did at one point at least earned it. People don’t just become high-paying executives out of college. They do something like work through the ranks or start their own business that eventually over time matures to become a high-paying position. That high pay is also essentially paying people for the time and effort they put in to get to the point they are out. Executives also take on a high level of responsibility, when something goes wrong whether the CEO knew about it in the first place or not, they are the ones being blamed. Not to mention there are only a few CEO and executive positions in this world and reaching that point is an accomplishment and should be demonstrated through compensation. Where I disagree is how CEOs are getting paid over 500% more than the people who work for them. This is incredibly steep and is unethical in my eyes. If you think about it even having a pay cut could create so much more money to hire more people or benefit the company in so way. As the video said, people have become greedy and that is why executive pay has increased astronomically. Like how executives are notified when CEOs of other businesses are given a pay raise, they respond by giving themselves a pay raise to keep up and to make sure they are being paid above the market rate. This kind of competition is only spurred by greed and is pointless in the grand scheme of things. It also has no benefits in helping a company grow or become more appealing to work for. As I stated before executives should be compensated well but instead of having the board of directors in which the CEO appoints decide the amount of compensation they get it should be calculated based on the pay his or her employees are making. So, if the employees of the company get a raise then so does the CEO. This way you are also holding the CEO accountable for the success of the company and the people who work for it.
Martocchio, J. J. (2017). Strategic compensation: a human resource management approach. Pearson.
Public Broadcasting Service (Producer), & . (2002, -12-02). Executive Pay: The Issues: December 2, 2002. [Video/DVD] NewsHour Productions. https://video.alexanderstreet.com/watch/executive-pay-the-issues-december-2-2002