Question

In the current economic environment, there has been a lot of discussion related to the excessiveness of executive pay. Agree or disagree as to whether you believe it is excessive and explain your position. What other alternatives may be there be to executive pay?

Answer 1

• As per survey of FTSE 100 CEO's annual pay settlements, executive pay increased by 11% between 2016-17. However, the average employee pay is still not increase in the same proportion of executives. Government has also monitored this situation and responded to this situation by regulating to increase transparency in pay of executives. As a whole, excessive executive pay will affect the Economy and Labour Share because the national income is also depends upon the wages and salary of employees.
• There are so many reasons due to which labour share in market is reduced like latest technology, low pay scale, and inflation etc. Therefore, we have to focus on increasing the labour share in market for the growth of economy. We can increase the labour share by giving them some incentives and good pay scale so that they can survive happily. Further, we can framed some guidelines for controlling excessive pay of executive because the economy as a whole is depends on worker not only on the capital of owners.
• Finally, we can conclude that excessive executive pay is really a big issue in present environment for any economy because it will affect the labour share and still there is no sufficient developed technology to finish everything without the use of anyone. So, it should be controlled and monitored to avoid this problem for any economy.