¶ … CEOs Paid Too Much?
There has been much press of late suggesting that corporate CEO's are generally overpaid. This 'talk' often generates controversy and has resulted in much analysis of corporate compensation programs in recent years. There is a strong and growing group of representatives that claim that CEOs are overpaid. The overwhelming body of evidence however, suggests that by and large a majority of CEOs are paid or compensated very well because they produce extraordinary results for the corporations they work in.
In this review the researcher will examine both sides of the issue, countering claims that CEOs are overpaid and providing evidence of why most CEOs are paid as well as they have been for so many years. The author takes the stand that CEOs are not overpaid given the contributions they make to organization's bottom line and overall performance.
Executive Pay -- Paying Leaders for Performance
There is much evidence suggesting that some CEOs are overpaid. Much of this evidence however is narrow sited and does not take into consideration the history of executive pay and contributions to society. In her article "Lowering the Bar" Joann Lublin suggests that CEOs are overpaid and under performing in many cases. The author uses as example Chief Executive Craig Crisman of Applied Magnetic Corp. During Crismans' reign stock prices and share prices in the company sank to new lows. Fortunately the CEO was able to revive many worthless stock options.
Despite often 'shaky' performances the author suggests that many companies are reprising worthless options and besting large offerings and "lower the bar on executive pay" to ensure business leaders stay put in a market that is often considered "hotter than ever" (Lublin 1).
There is ample evidence supporting Lublin's claim that CEOs are paid extraordinary sums of money. During the late 1990s many CEOs realized an average increase of 5.2% in salaries and in bonuses compared...
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