CEOs Earn Over 250 Times the Amount of Average Workers

Updated on November 13, 2017

I think changes need to be made to the CEO compensation schemes in America. After reading about how tens of millions of Americans are earning less than $10.10 an hour while CEO’s are having toga parties and compensations packages over 1500 times the average worker, it makes me sick. I find it amusing that when CEO’s are caught they use excuses that they themselves would find ridiculous if their employee used it against them. For example, in a New York Times article Dennis Kozlowski said he failed to pay taxes, because he “relied on his accountant” and was therefore “not paying attention” this is the kind of excuse I would use against my mother a decade ago, not when I am facing criminal charges (Eichenwald).

I understand that CEO’s work hard, but they certainly don’t work 300 or 1000 times the average worker and thus should not be paid as such. The problem is the few articles that do have information about CEO to worker pay ratios show figures as high as 1700 times the average worker, but what about the majority of companies that don’t disclose this information. And many CEO’s are earning tax-advantaged stock options until they retire, worth millions. Congress made it the law for companies to disclose their actual CEO-to-worker pay ratios under the Dodd-Frank law, (but) the numbers remain unknown” (Smith). The CEO’s have so much power and control in this nation that in some cases they have the power to use company funds for parties, houses, transport via private jet and to increase personal wealth. I find it disgusting how Dennis Kozlowski and Mark Shwartz defrauded their company for hundreds of millions of dollars while their employees suffered with low wages. This has occurred over and over again at Enron, WorldCom and Global Crossing, which together lost over $150 billion and over 35000 jobs all because the executives got greedy and selfish (1). These examples are open fraud, but I feel that CEO’s who are “honestly” earning 1000 times the average employee is fraud. As they live lavishly in mansions while their employees struggle to survive.


Some CEO's get compensations packages over 1500 times the average worker, it makes me sick.

It seems there is a problem in selecting good executives, because the smartest candidates who come from the best schools and score high on an I.Q test has no correlation to job performance. The I.Q test “doesn’t pick up effectiveness at common-sense sorts of things”

I think if the CEO’s were earning salaries similar to those of other developed nations such as, Japan, Germany or Britain and the profit was distributed through wages and reinevsted into the firm the company’s reputation would improve, the nations GDP would increase as more individuals spend more and the overall standard of living would increase. CEO’s in other nations who are earning 50, 20, or even 10 times what the average employee earns can still live a lavish lifestyle. In Japan, executives are making “eleven times what a typical worker brings home” compared to American executives who earn over 475 times the typical worker (PBS). This is insane. The cost of living in some areas of Japan are among the highest in the world so, there is no excuse. Company’s have been providing huge severence payments and retirement benefits for its executives while they are“trimming pension, medical and other retiremnt benefits for millions of lower- and middle-income workers” (Shultz).

Work Cited

Gladwell, Malcolm. "The Talent Myth." The New Yorker. 22 July 2002. Web. 30 Dec. 2015.

Eichenwald, Kurt. "Big Paychecks Are Exhibit A at C.E.O. Trials." New York TImes. 19 June 2005. Web. 30 Dec. 2015.

PBS "Executive Excess." PBS. PBS. Web. 30 Dec. 2015.

Shultz, Ellen E. "While Executives See Their Pensions Grow, Regular Workers See Their Benefits Shrink." WSJ. 20 June 2001. Web. 30 Dec. 2015.

Smith, Elliot Blair, and Phil Kuntz. "CEO Pay 1,795-to-1 Multiple of Wages Skirts U.S.

Law." Bloomberg.com. Bloomberg, 30 Apr. 2013. Web. 29 Dec. 2015.

References

(1) PBS "Executive Excess." PBS. PBS. Web. 30 Dec. 2015.

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