Are Ceos Overpaid?

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“The answer to the question of whether American CEOs are overpaid is clearly "yes"; for those who earn large bonuses and generous stock options when their companies are doing badly, either absolutely or relative to competitors. As mentioned in an article written by Gary Beckner and Richard Posner. This research paper will discuss in details the facts that have been research as to why CEOs are being overpaid. It will discuss the pros and cons of the CEOs salary and compensation and how employees should share part of the profits accordingly. In the business world of today, one's pay should reflect the amount of work he or she has done. This rule should apply to all individuals in the workforce including CEOs. However, it is well recognized that there have been doubts on whether some high placed CEOs are being overpaid. A Chief Executive Officer is not supposed to obtain an unusually high salary if his or her company were to file for bankruptcy. According to an online article written by Michael Winter, the Financial Times newspaper stated that CEOs themselves claim that they are being overpaid. He also states that, "The issue is particularly sensitive because the gap between rich and poor in America has reached its widest point in more than 60 years." These results came from a survey that was conducted on the major U.S. business leaders. There has to be a boundary because it is morally and financially incorrect for any corporation or company to continue to operate in such a fashion. These unfair procedures sometimes lead to economic instability or employee strikes. Top CEOs are partly responsible for the welfare of the nation's economy. If these CEOs lead their companies to financial distress, then their shareholders will have to suffer due to the loss of money they have invested. According to F. John Reh ( a writer on, In the 1980's CEOs of large companies made about 42 times what the average employee would make in an hour. He also states...
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