In our current times, the amount CEO’s earn has drastically increased since opening of what we know as the stock market. It is estimated that CEO’s earn on average 210 times more than the average worker, but often times in large corporations the number is a lot higher. Any cap limit on CEO’s pay would be low for most citizens. I believe CEO’s earn substantially too much above their average worker, let alone their lowest paid workers. There should be a limit on how much CEO’s are paid, because we see such a large gap between the top level management salaries compared to their first-level employees. In the video we watched for this blog post, they touch on discussing the amount future of the company lies strongly on the leadership that is the CEO and its board. With this, I agree the leaders of any company really set the tone on where the company desires to be, but the drive of the company is within its employees. Without those workers, there are no moving parts. I think CEO’s should be the top paid individual of the company, this doesn’t mean to allow a large disparity in pay between the next 10 employees though. The method they should be paid with a cap by a percentage. Instead of focusing on a single number, settle it with a percentage that depends on the company’s success. With the introduction of stock trading and being able invest back into your company, we have seen some of the biggest increases in the value of corporations large and small. Where we see the largest discrepancies is in large corporations, with most CEO’s earning well over millions of dollars. Additionally to the rise in executive compensation we have seen record setting stock prices for many companies. With the increase of profits, reported by the video CEO’s often enjoy the luxuries such as a “company vacation home” where this money is “reinvested” into. Since most of this decision making is done by executives, board of directors, and now significant investors of the company pick what do to with this money. No one is questioned because they are all executives among themselves, and benefit from it. I don’t think we are far from fixing this issue, this is highlighted because we haven’t seen the same increase in pay among entry level workers, for example we have also only seen the federal minimum wage increase since 2009. We have seen an increase of 52.6% in CEO compensation since then. It’s no question this has raised some eyebrows, the solution is from within and finding a moral and ethical understanding for how much you should earn. There isn’t an issue with a CEO being a billionaire, there is an issue when the workers among the CEO’s arms isn’t being compensated respectfully. If CEO pay increases one year, then it should also increase flat across its employee’s. We can not allow ourselves to be greedy, the boat is led by its captain (CEO), and driven by its sailers (employees).
References:
Mishel, L., & Wolfe, J. (n.d.). CEO compensation has grown 940% since 1978: Typical worker compensation has risen only 12% during that time. Economic Policy Institute. Retrieved March 6, 2022, from https://www.epi.org/publication/ceo-compensation-2018/
Gelber, M. (2020). Can you guess how much the average CEO makes? Monster Career Advice. Retrieved March 6, 2022, from https://www.monster.com/career-advice/article/guess-how-much-ceo-makes
