Discussion Executive Compensation

Popular press and media accounts generally suggest that executives are overpaid. For example: the average yearly salary of a CEO of Fortune 500 company in 2018 was $14.5 million. The average yearly salary of a regular worker was $39,888.

• Justify why the CEO’s pay is appropriate.
  • Support your response with specifics.

Answer preview

The CEO compensation remains one of the contentious topics where some perceive that the high payment for the company’s executive is unjustified, and others arguing that executive officers deserve high salary especially due to the position they occupy. Over the last four to five years, the slurry of executive officers has been ballooning, unlike that of employees, which remains. Over this period, the salary gap between the executive officers and junior employees has been gradually widening (Bainbridge, 2009). For instance, the average annual salary CEO of a Fortune 500 company was approximately $14.5 million in 2018 compared to $39,888 for regular workers in the same type of company.  Mishel, & Wolfe, (2019) illustrate that executives especially CEO plays a pivotal role in the company’s success.

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