Is Executive Compensation Ethically Sound?

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Is Executive Compensation Ethically Sound?

Throughout its life, a corporation may experience many debatable issues such as social responsibility, corporate governance, corporate wrongdoing (bribery, fraud, and scandals), workplace harassment, and discrimination. These issues are bombarded through many sources of the media such as newspapers, television ads, magazines, newscasts, and many more. Executive compensation is one debatable issue that is no stranger to the media. Some people agree with CEO’s receiving millions of dollars for their work and others disagree saying it’s not justifiable that one person receive millions of dollars as a salary. Here, we contend that the million-dollar salary and other benefits such as bonuses and stock options warrant executive compensation, as long as the way the CEO attains the salary is by no means illegal or unethical. This means no foul play, no “cooking the books”, no discrimination, no displacement of workers, etc. exists. We also contend that executive compensation is warranted if others benefit from this compensation. In this paper, you will also be exposed to reasons for this warrant and some personal insight as to why CEO’s deserve these high payouts.

An organization’s CEO holds the highest position within the entire company. With this position come many qualities and traits that no other position would entail. CEO’s are known for their excellent leadership skills because they are responsible for providing direction to everyone in a company. A CEO must make sure everyone in the company (from top-level management to front line workers) is contributing to the wellness of the organization. He or she must make sure all employees are furthering corporate goals. Aside from direction, CEO’s also bring a culture to the organization. A firm’s culture is strongly dependant on the success of the organization and it is up to the CEO to foster that culture among the employees. A CEO also brings knowledge to...
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