DISCUSSION. Compensation and Benefits. Management Essay

DISCUSSION
Name
Institution
Course
Date
DISCUSSION
Yes. American CEOs are overpaid. A typical CEO from one of the top American corporations now earns about $18.9 million a year. Whereas there are cases of overpayment, the determinants of CEO pay are not new and they are not influenced by corruption. Today, most CEO between 50 and 100 times a normal worker. In America, the work pay ratio of a CEO is 350:1 (Lawrence &Julia, 2019). In this, it is rational to ask whether these CEOs are worth it. Are they overpaid? For any company to perform well, it is a result of collective efforts. Leaders are always important but the more senior they are, the more individuals they will impact. For example, a CEO can shape the culture of an organization.
According to Bill Rearden (2019), the compensation of the CEOs has increased by 997% from 1978 to 2014. Between 1940 and 1970, the average payment of CEOs remained below $1 million. Today, companies are using high salaries to attract top talents in the competitive field. Companies are also using high salaries to reward those leaders who have increased the value company. However, research indicates that Skeptical CEOs create additional value for themselves or they think that they deserve to be rewarded that way.
In the past 10 years, the pay of CEOs at S &P Companies has raised with more than $500,000 per year to a regular of $14.5 million in 2018 (Bill Rearden, 2019). For instance, the highest-paid CEO was Lawrence J. Ellison of Oracle with $96.2 million (Clifford, 2017). In 2016, Thomas Rutledge of Charter Communications was the highest-paid CEO at $98 million.
In 2015, American CEOs earned 335 times the pay of average pay of normal workers. In the United Kingdom CEOs earn 129 times the pay of the average worker. As days go by, CEOs are continuing to earn more than normal workers annually (Clifford, 2017). This shows that CEOs are paid disproportionally at the expense of other employees. The pay ration of the CEO is ...