Ceo Paid Too Much

Do CEO’s Get Paid Too Much?

Victoria Richebacher

MGT 240

Professor Schermerhorn

October 26, 2005

The question “Do CEO’s get paid too much?” is an extremely debatable question that many people have tried to answer. Of course many CEO’s will claim that they work for every single penny of their well-earned pay check. However, if one were to ask an employee at the bottom of the chain of command, I’m sure they would respond much differently; and with good reason too. The average pay of CEO’s for the top 367 corporations in the United States is $11.8 million. While at the same time, the average pay of production worker’s is only a whopping $27,460 a year. This means that CEO’s get paid 431 times as much as a production worker on average1. The difference between a CEO’s and a production worker’s pay is phenomenal. When asking the question, “Do CEO’s get paid too much?” consider Terry S. Semel, CEO of Yahoo. Semel topped the charts as top earner in the United States with $230.6 million in total pay. Total pay for CEO’s calculations includes salary, bonus, and other compensations2. When considering the average CEO pay versus that of a production worker, along with Semel’s $230.6 million pay, it is hard not to conclude that CEO’s get paid too much today.

Determining How Much To Pay A Job

When debating if CEO’s get paid too much, one has to take into account what qualifies a job to get paid a substantial amount of money or a minimum amount. Things to consider when deciding how much money a job should entitle: how much physical effort the worker is exerting for the job, how much the worker is contributing to the firm, the amount of ability, skill, or training the job requires, the job’s difficulty, stress, risk, or unpleasantness it encounters, and finally the degree of responsibility or importance the person has to the company3.

However, after analyzing and taking all of these different aspects into account, it seems that a CEO should not...