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SHOULD TOP EXECUTIVES MAKE THE MONEY THEY DO?
Prepared for
Prepared by
April 4, 1997
CONTENTS
Abstract ........................................................................................................... iii
Introduction ..................................................................................................... 1
High Pay Seems Small When Compared To Company Profits .......................... 2
Top Executives Are Under A Lot Of Pressure .................................................. 3
US Executives Paid Three Times More Than Other Countries For A Reason .... 4
Pay Should Reflect Performance ...................................................................... 5
Conclusions And Recommendations ................................................................ 6
Notes ............................................................................................................. 8
Bibliography ................................................................................................... 9
ii
ABSTRACT
This report explores the issue of the pay that top executives make, and the reasons why
they do. It also suggests improvements that can be made to make the system better.
High Pay Seems Small When Compared To Company Profits
Many companies pull in profits that are extremely high. When an employee of such a
companies salary is compared to the amount of profit that the company earns, it starts to
seem reasonable.
Daily salary IMG 0077
Economist salaries by educational attainment.
Wayne Gretzky, New York Rangers.It only makes sense that if the employee is directly responsible for the
success of their company, then they deserve to get their payback. It seems ironic, but
many salaries even look small once compared with a companies profits.
Top Executives Are Under A Lot Of Pressure
Being the CEO of a company is not an easy job. There is all kinds of pressure for a person
in such a position to succeed. If they do not, then it is their job on the line. Therefore,
they deserve to receive a large sum of money for the work that they do. It is the only way
to compensate these employees for the tremendous strain that their job puts on them. It is
essential that the employees get paid the amount of money that they deserve.
Pay Should Reflect Performance
When CEOs are being given big paychecks, they are expected...