Executive Compensation in the US is out of control. Salaries for most Essay

Executive Compensation in the US is out of control. Salaries for to the highest degree CEOs are way too high in comparison to front line wage spike - Essay ExampleAnalysis and Evaluation of the issues Survey on the salaries of the CEOs have shown that the discrepancy in the fee have been growing very rapidly. During the 1980s the remune balancen of the top executives was almost 42 times of that of the hourly workers pay. This had increased to 85 times by the next decade. With the inception of the new millennium the salary differential coefficient raised up to 531 times the salary of the junior most executive in the corporation. The Congress has passed a law in the post financial crisis period that made it mandatory for the CEOs and the top executives to disclose their salaries (Smith 1). The pay that the CEOs were in different forms like salary, perks, bonus, pension accrued over the years and stock options. This compensation ratio of the CEO to the average workers varied across sector. It has been observed that the difference was greatest in the corporations that provided financial services, followed by the companies that produced consumer products. The ratio was comparatively less in the materials, technology and healthcare sector respectively. According to the eminent counsel thinker Peter Drucker, this ratio should range between 251 and 201. However the sound judgment that Drucker posited till as late as 2005, is not followed in the employment market in the coupled States or any of the multinational corporations that operate in different parts of the world. This kind of differences has led to a growth in the inequality in the distribution of income. While the growth of the wages of the top 1% of the executives have been 361 percent the wages of the employees that belong to the lower hierarchies have braggart(a) only by 34 percent over a period of almost three decades. This has a direct effect on the amount of revenue that the US government has coll ected from the top executives in form of taxes. As a result the income gap of the households has also increased (Mishel 4). Various issues relating to this have also come up in this regard. Only those households which had a top executive of a company as their family member had incomes that were natively high. This was especially true for the executives who worked in the financial sector. Another surprising fact was that the rate is which the stock markets have grown over the years was less than that of the growth of the salaries of the CEOs. Research has shown that the stock options that the CEOs are offered account for this discrepancy in the wages. Warren Buffet is another supporter of this view. He insisted that the pay the top executives do not guarantee the work that they perform. He also feels that the CEOs have egoistical intensions when they formulate policies in the organization rather than thought process about the benefit of the investors and the health of the company (Buffet 16). According to him a CEO can fulfill his selfish needs by paying fewer dividends to the shareholders and steering the retained funds into projects that may not become out to be fruitful. Reactions I support the opinion expressed by the authors discussed above and the results of the various canvas that have been conducted on this issue. The US financial crisis that had made a lot of families bankrupt was caused due to the extreme greed of the top executives. This greed had forced them to get into deals that were either very vulnerable or