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In: Finance

Do you think U.S. executives are compensated too highly? Why or why not?

Do you think U.S. executives are compensated too highly? Why or why not?

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Expert Solution

I think that US executives are compensated too highly.

A study of the executives pay at S&P 500 companies in 2016 show that CEOs of the companies earn an average of $13.1Million in total compensation. In comparison their workers who are in supervisory role earned an average of $37,632.

That made the ratio to be 347 to 1. Can you imagine. CEOs are paid 347 times more than supervisors on an average.

Board of directors think that this high compensation is necessary to keep qualified persons in the role.

CEOs are not the only person running the company. Without proper supervisors and hard working employees, it will not be possible for a CEO to achieve a target. CEO can be visionary and may provide new ideas but the employees who believe in the company work hard to achieve them.

CEOs are not celebrities. You don't buy a particular product of a company by knowing its CEO. So they don't add extra value in branding of the company. They do work hard, but getting paid 347 Times more is not a good sign.

jeff jeffy answered 2 years ago
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