The document discusses the controversy around CEO compensation. It notes that while CEOs make strategic decisions that impact company performance, very high compensation can create issues like lack of team performance and loyalty when there is a large gap compared to lower level employees. It suggests that CEO pay should be tied to company performance and layoffs, and that independent committees should set compensation to address these issues. Overall performance depends on both CEO leadership and external factors, so stock price alone can't determine a CEO's contribution. Uniform compensation across industries is impractical given varying company sizes and CEO roles.

1. CEO COMPENSATION CONTROVERSY
Submitted by,
DCSMAT,Vagamon

2. In boom or recession, a company is
growing or surviving not by default but
by effective strategies .This strategic
decisions are taken by CEO.

3. What is CEO Compensation Controversy ?
1) the extent to which CEO pay
is tied to firm performance
CEO Pay
Controversy
2) the overall size of CEO pay
3

4. 1) What are the reasons for high CEO
compensation ?
oTo reduce CEO Turnover.
oComplexity Of work
oInterlocking
oStock Option
oDownsizing/layoffs
oInflation

5. 2) What are the negative implications of significant
gap between the compensation of top management
and lower management ?
oLack in the quality of TEAM PERFOMANCE.
oLoyalty.

6. 3). Profits and stock prices are notnecessarily the
indicators of a CEO’s performance. The company’s
stock performance depends on external variables and
cannot determine the performance of the CEO. Can
we agree with the statement ?

7. Both CEO and External factors plays a vital role.
Economic Boom
- Increase of share price is a natural
phenomenon.
Economic Depression
- If company is not much affected credit goes to
CEO
eg: Apple

8. 4 ).What measures can be taken to solve the CEO
compensation controversy ?
oCompensation for Layoff.
oCEO compensation should be based on company
performance.
oIndependent Compensation deciding committee without
CEO participation.

9. 5 Whether providing high compensation to CEO’s will
ensure better performance, growth and overall
development of the company? If not what should the
company do to motivate and make the best out of a
CEO?
oCEO turnover is not desirable.
oTo get/retain the perfect talent.
Motivation Techniques
o To create a feeling that they are the owners of the company.

10. 6). What is the compensation frame work that company
should follow for the remuneration of CEO. Should
the criteria be uniform across the industrial spectrum?
Uniform remuneration is practically impossible.
It depends on ability of the person to take strategic
decisions.
Performance of the company.

11. Company Name CEO
Wipro Azim Premji
Dr Reddy’s lab K. Anji Reddy
Dell Computers Michael Dell
Many of the CEO’s are also the promoters of the company. They
withdraw the profit of the company as their salary.

12. CONCLUSION
CEO’S play a vital role in the day to day performance
of the company. Strategic decisions are made by them
so proper compensation should be given .The
management should ensure that the decisions taken
should not create a conflict between the top and bottom
level of organization