How much should CEOs be PAID?

Question

I have a college degree and make around $30,000(1st year out). I am guessing most people do not think that is too much money for a college grad. Like most people, I aspire to move up within my company; I hope to someday make around $100,000 a year in order to support my family and pay for my kids' college(which my parents' could not do). My question though is how do we determine what is too much money for a person to make per year? If someone makes $500,000 a year, is that too much? A million? How can government draw a line and say a person(CEO) can not make any more money for a given year? I guess I am trying to find out how government can(as some argue) determine how much a CEO should be paid. Where does it get the right? Also, if it can, why can't it look at your salary and see that you are obviously earning more money than you need a year (A person only needs roughly $50,000 a year to live well in the U.S.)?

Should we just we say no one will make over 50K/year?

Also, I often hear that CEOs don't need all the material things they have. Honestly, I don't either. I don't need cable, internet, a laptop and desktop computer, my nice car, all my cds... I didn't need to travel to 12 foreign countries. If we are going to pick out CEOs, can't we all afford to give up a lot, especially if it is going towards helping the poor?

Answer 1

Government should stay out of determining a CEO's pay. If it is a private company and he is the owner - HE can determine his pay.
If it is a public company the stockholders and workers are there to say WHOA - STOP - if compensation gets too high.

Why do we pay actors and sports athletes more than we pay MOST CEO who run a business and actually EMPLOY people. This country is nuts for that!

Answer 2

Was I asleep for the past 30 years? Since when does the government decide what a CEO gets paid? The market decides. One other thing, the money that would ordinarily go to the CEO doesn't go to the government to be dispersed whatever way it wants. That money stays within the corporation. Have we, as a nation, become so complacent about the role of government in our everyday lives? It would appear so. How sad.

Answer 3

Not nearly as much as they think they should. Shareholder groups often have no say so in executive salaries, but many are seeking to remedy that by gaining seats on both the boards of directors and compensation committees, which often consist of the very people whose salaries are being determined. How's that for a conflict of interest? The truth is that executive salaries probably more often than not are determined by good old boy and girl networks of people who frequently serve as officers of more than one company with each other, and who scratch each other's backs while sometimes bleeding corporations dry. As a case in point, the recent resignation of Bob Nardelli, CEO of Home Depot, may well have been spurred by several lawsuits lodged by various shareholder groups alleging corporate malfeasance among other things. Nardelli took hundreds of millions of dollars in compensation while corporate stock was seriously declining in value. Does that sound like good management deserving of that level of compensation?

Answer 4

well... the trick is... it's one thing for a CEO to make 200 times the average workers salary... it's a lot... but I can understand it...

but over the past 10 years... that's gone up to several 1,000 times the average worker's salary at some companies... into 10s of millions of dollars...

while average worker pay has barely increased at all over that same period?

seems like an odd occurrence to me?

I mean is anyone worth 1,000 other workers?

and if they get fired (because they are doing a bad job)... severance packages can be worth 100s of millions, in you count all the stock options and everything... which boggles my mind... do a bad job and win the lottery?

I don't like salary caps, because I think it's a very slippery slope... but an "extreme luxury income tax" may be one idea... like an extra percentage for people making over 5 million or something

Answer 5

A CEO should receive as much as the shareholders of the company he manages allow. If they, the owners, believe he's getting too much, they can call a vote to fix it.

Regulatory salary caps are completely ridiculous. If the poor are your concern, teach them to help themselves. Start a company and employ them.

Answer 6

The only factor putting a ceiling on CEO compensation should be the shareholders of the corporation of which he is head.

Supply and demand dictate compensation. There is an almost unlimited supply of people capable of making Slurpees. That's why they aren't highly paid. There are decidedly fewer people with the requisite skill set to perform as CEO for a Fortune 500 company. Thus, their relative worth to the organization is higher, and they're paid more.

Answer 7

after a certain amount, it should be tied to performance. You want to pay enough to attract the best people to work for your company, but they shouldnt be given golden balloons or severance packages or whathave you when they dont do a good job. If they wont take the job without a stipulation that they get paid millions even if they run the company into the ground and get fired they shouldnt be hired in the first place.

Answer 8

you will discover from the rants below that conservatives do not agree inclusive of your determination. Economists were holding for years that the biggest reason for our Federal deficits are the Bush tax cuts. Then throw in $2Billion a week in Iraq. Tax cuts that commonly benefited the wealthy in this u . s .. those tax cuts are set to run out, yet there'll be an exceptionally large wrestle by technique of Republicans to shop them in position. it really is a situation. If we improve taxes on quite everyone, they are going to have a lot less disposable earnings to purchase stuff, a lot less stuff will be made, fewer jobs will be created. on the different hand, the wealthy those who were given Republicans tax cuts did not flow out and spend all that money on "stuff" or create jobs for the middle type. Wages for the middle type were stagnant in the course of the Bush administration. Obama's plan is to allow the tax cuts for the wealthy (and also you'll outline that although you want) expire, so extra money is amassed to run the rustic. And shop taxes low for low/center earnings those who're regularly teens, beginning a kin, organising a house and buying "stuff."

Answer 9

Their MAIN pay should be in restricted stock. The company needs to put it on their books even before the restriction are removed. As the company improves his long term management choices reward him. Yes he could make short term choices for a quick profit that is the reason for long term restrictions.

Answer 10

If a company can pay the CEO an exorbitant salary and give him/her an excellent benefit/severance/retirement benefit package they should be able to pay the employees above market wages as well and offer them an excellent benefit and retirement package. The CEO should not be funded by paying employees poorly and giving them lousy benefits.