The high compensation for executives and in particular for CEOs has been a topic of debate for many years. Increasing salaries and bonuses for leaders of companies have mostly been criticized and even pointed out as a key factor for a rising wealth distribution inequality.
Especially in the United States, where CEO pay is most extreme, the public as well as the media ask for new regulations and political intervention. But are these high compensations really undeserved and unfair? How much do top managers actually earn and why do businesses support it?
This academic paper will first give an overview of some important numbers and statistics in order to have an idea of how high a CEO’s income is compared to an average employee. It will also explain how to properly interpret these data and how much an executive’s income can vary depending on different factors.
After analyzing the recent history and developments in CEO pay, chapter 8 will provide the necessary economic background to help understand companies’ decisions and see high wages from a business point of view.
Although the paper will focus on CEO earnings in the US, it will give examples of differences in other countries and systems. Due to a distinct set of labor regulations, we will draw a comparison to CEO pay in Germany and furthermore illustrate the event of a political referendum in Switzerland.
Finally, we will pick on various arguments by media, the public, as well as renowned economists, listing a series of pros and cons for excessive CEO pay. An insightful survey, conducted in the US, will then close the debate and leave the reader with the final thoughts of the conclusion.
Inhaltsverzeichnis (Table of Contents)
- Introduction
- Executive vs. Employee Compensation
- The Wealth of CEOs
- Trends of CEO Pay in Recent Time
- General Issues Regarding CEO Pay
- CEO pay in the US
- US CEOs compared to German CEOs
- Referendum in Switzerland
- Discussion in the Media
- Arguments for CEO Pay Being Excessive
- Arguments for CEO Pay Not Being Excessive
- The Public Opinion
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This academic paper examines the controversial topic of high CEO compensation, particularly in the United States. It aims to provide a comprehensive overview of CEO pay trends, factors influencing this compensation, and the economic rationale behind it. The paper delves into the debate surrounding the fairness and justifiability of high executive salaries, analyzing arguments from various perspectives, including media, the public, and renowned economists.
- The disparity between CEO compensation and average employee income in the US.
- Factors influencing CEO pay levels, including company size, ownership structure, and industry.
- The economic rationale for high CEO pay from a business perspective.
- Comparative analysis of CEO compensation in the US and Germany.
- Public opinion and arguments surrounding the ethical implications of high CEO pay.
Zusammenfassung der Kapitel (Chapter Summaries)
- Introduction: The paper introduces the debate surrounding high CEO compensation, highlighting the growing inequality in wealth distribution and public concern over excessive executive salaries. It outlines the paper's scope, focusing on CEO pay in the United States and providing a historical overview of the topic.
- Executive vs. Employee Compensation: This chapter presents an overview of compensation trends for executives and employees, highlighting the significant gap between these two groups and the factors contributing to this disparity. It explores the historical development of executive pay and its relation to overall economic growth.
- The Wealth of CEOs: This chapter delves into the financial realities of CEO compensation, presenting statistics on the wealth and income of top executives. It examines the different components of CEO pay, including salaries, bonuses, and stock options, and discusses the methods used to calculate and compare this compensation.
- Trends of CEO Pay in Recent Time: This chapter analyzes the historical trends in CEO compensation over time, showcasing the significant increase in executive pay compared to average employee wages. It investigates the factors driving this upward trend, such as globalization, technological advancements, and changes in corporate governance.
- General Issues Regarding CEO Pay: This chapter explores broader issues related to CEO compensation, such as the ethical implications of large income disparities, the impact of CEO pay on corporate performance, and the role of government regulation in influencing executive salaries. It also discusses the link between CEO pay and corporate social responsibility.
- CEO pay in the US: This chapter focuses on CEO compensation in the United States, providing a comparative analysis of CEO pay in the US versus other countries, particularly Germany. It explores the different regulatory environments and cultural attitudes that influence CEO compensation levels in these countries.
- Discussion in the Media: This chapter examines the media discourse surrounding high CEO compensation, summarizing various arguments for and against excessive CEO pay. It analyzes the perspectives of prominent economists, business leaders, and public commentators on the topic.
Schlüsselwörter (Keywords)
This paper focuses on CEO compensation, executive pay, wealth distribution, economic inequality, corporate governance, business ethics, public opinion, regulatory frameworks, and comparative analysis. It explores the relationship between CEO pay, corporate performance, and social responsibility, using examples from the United States and Germany.
- Citar trabajo
- Christoph Kotsch (Autor), 2016, How justifiable is high CEO pay in the United States?, Múnich, GRIN Verlag, https://www.grin.com/document/345073
