Ceo Compenstion

I used to hear the TV News saying that the salary a CEO earns a day is much more than an ordinary worker earns a year. Although there are still millions of people are unemployed in the United States, the CEO compensation never stops rising. While the causes to push up the salary are numerous, there is nothing to do with effective job performance from CEOs. It is no doubt that the rising of income inequity has become one of the most challenging problems for many countries in today’s world.

According to the article “Reflections on CEO Compensation” written by John C. Bogle, in 1980, the average compensation of U.S CEO was forty-two times more money than average worker. The salary gap between a CEO and ordinary worker was small because the economy and company profits didn’t grow very fast during that time. But by the year 2004, only 24 years later, a CEO’s average compensation had risen violently to 280 times that of the average worker. And this ratio, as been told in the article, “had downed from an astonishing 531 times at the peak in 2000.” Currently, according to the Inter Press Service News Agency, there is a new survey made by the biggest U.S. trade-union federation found that the CEOs of top U.S. corporations were paid 331 times that of the average worker in 2013. The News also mentioned “U.S. CEOs of 350 companies made an average of 11.7 million dollars last year compared to the average worker who earned 35,293 dollars, according to the AFL-CIO’s 2014 Executive PayWatch database.” This huge salary gap may cause dissatisfaction among majority of people because there are still a lot of people who earn minimum wage and they have to work much more than CEOs do. It is clearly unfair for these people who barely live for their lives.

If we want to know the reason why the salary payment of a CEO has gotten out of control, we should talk about “The Revenue Act of 1950” first. This act determined the principle of preferred stock, and it made preferred stock have...