For the purpose of this essay, executive compensation will be considered as an issue separate from other business issues. It will be assumed there is honest reporting to shareholders and the executives are behaving ethically with accountable for their conduct. If anyone in a company is performing unethically, regardless of their title, it should result in their termination.
Non-profit enterprises, which enjoy tax benefits and public financial support, should develop a compensation model tied to the activities of the organization and the revenues generated. This is advisable because these organizations receive tax breaks and receive donations and they have an obligation to society. If non-profits pay too much for …show more content…
There funds were supposed to support job training programs for the disabled and underprivileged. Susie Buffett, of the Sherwood Foundation, confronted the board of Omaha Goodwill Industries. Ms. Buffet was very public about her staunch disapproval of the CEO executive compensation package which was near $1 million dollars. In 2014, Ms. Buffett was quoted as saying, “They will never get another penny of money from the Sherwood Foundation. There is my statement.” I agree with Ms. Buffett; the salary of the CEO of Omaha Goodwill is very unethical, and the board of directors should be accountable for lack of oversight. The board failed in its’ responsibility to direct donations to support the mission of the organization.
As a capitalist, I feel differently about private, for-profit businesses whether publicly traded or not. I don’t think people object to the compensation of the CEO as much as they object to their own low compensation when compared to the wage of the CEO. In a capitalist approach, businesses should be free to compensate their executive staff at whatever level the company can afford. Attempts to restrict a private company’s payroll would directly interfere with goals of our free market …show more content…
Typically, companies base their budgets for salaries on incoming revenues which support the budget for all employee compensation. If employees are disgruntled about their individual compensation, they have the right to seek employment elsewhere and allow fair market value determine what their skills are worth There are companies with a more socialistic approach to operations. Buffer is a company which specializes in social media management. They use a formula which allows for the transparency of salaries and an understanding of the base value of each role in the company. Each position has a base wage amount tied to it which is multiplied by variables including length of service, experience, and choice of benefits. Buffer created and began using their formula to move all employees along the wage scale and limit the disparity between the highest and lowest compensation.
The freedom to conduct business and profit has built our capitalist country. Government creates and administers our rules and regulations, so laws are followed, and various stakeholders are protected. But, as for compensation, I don’t believe government should be allowed to dictate compensation in the for-profit