Executive compensation 2013

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Executive compensation 2013

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Executive compensation 2013

  1. 1. Current Controversies in Executive Compensation: ‘Issue of Justice and Fairness’Understanding the controversy basically becomes criticalasExecutives getting richer while pay for lower level workers remained relatively stagnant.(Current Controversies in Executive Compensation ’Issues of Justice and fairness’)To break down on this issue, we would have to look at the reasons and responsibilities of theposition itself:The system has doled out rich rewards – but it can and does impose hefty penalties onthose who don’t perform. More than ever, the boss is likely to lose his job and his perkswhen he doesn’t deliver the profits shareholders expect (Business Week, April 22, 1996,pp. 102.)Looking at the heavy work load and responsibility carried by these people on the helm makes thecompensation rise higher and at some cases 1% of the net profit of the organization itself. On theother hand – large corporations and companies don’t complaint on this matter because,Despite the soaring pay, many experts argue that the system is working better than ever.They see the bull market and healthy corporate sector as proof positive that companiesget what they pay for (Business week April 21, 1997, pp. 60)Only that the ratio of comparison between the executive level and common workers doesn’tmatch. This basically because of the fix pay or remunerations for the common – monthly wedgeearner and the executive, CEO person is making his paycheck on percentage of the organizationsprofit he is working for. This has its benefits – bigger pay for higher workload, effort and betterresults.Based on this discussion - I would not agree more that an executive with the responsibility tosteer the organization has all the rights to earn the compensation and also to pay the penalty inthe case he or she fails to keep the sails high in turbulence.

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