The Impact Of Executive Compensation On Household Income Essay

1586 Words Jun 14th, 2016 null Page
When you compare executive compensation to household income, you noticed executive pay is not tied to performance, the average executive pay keep going up with no penalize from the board. “In the United States, the pay of CEOs at publicly traded companies went down in real terms by 46% between 2000 and 2011, although it bounced back—as did corporate profits—in 2012, while still remaining well below the 2000 level.” (Vanessa Sumo and Hal Weitzman, 2013).

CEO dishonesty behavior widespread and developed, “Consider the option backdating scandal in unites state in 2005 and 2006. The University of Iowa Erik Lie discovered that in many cases, companies granted stock options to executives just before stock price spiked. As a result the Securities and Exchange Commission and US department of Justice after investigated more than 100 businesses, and companies’ own investigations led to dozens of financial restatements and executive dismissals. Although only 12 executives ultimately received criminal sentences, and only five were given prison terms (the others were sentenced to probation), the scandal helped reinforce the notion that CEO compensation often results from underhand means.” (Vanessa Sumo and Hal Weitzman, 2013). 80% of US executive feels can not be blamed for bad performance if they are not paid enough. Average American CEO makes 319 times of what American worker do.

Steve McDonnell, Demand Media mentioned in their article “CEO Compensation in the US vs. the World” that…

Related Documents