Overpaid CEOs?

Paper Summary:

In this article, the writer notes that with the recent corporate scandals making the news, the question of corporate greed has been at the forefront of the American consciousness. The writer further points out that the possibility of corporate greed is nowhere more visibly apparent than in the cases of the CEOs of major U.S. corporations. Very often, these CEOs are paid exorbitant sums, along with fringe benefits and stock options, to manage these companies. Some estimate that U.S. CEOs are currently paid more than 300 times the wage of the average U.S. worker. The writer maintains that this higher pay scale does not necessarily mean, however, that CEOs are overpaid: In fact, the writer claims that it is evident that the growing gap between super rich CEOs and the average American worker is indicative of a rising quality of life for all of us.

From the Paper:

"Capitalism is, after all, an ideal mechanism for the creation of wealth through the operation of free markets and free trade. It shouldn't come as a surprise, then, that CEOs of major corporations have reaped significant benefits from the mechanisms of capitalism. What critics of CEOs pay fail to admit is that it's not just the CEOs who are better off than they were twenty years ago. American society as a whole is much better off because capitalism has fueled incredible wealth building. The rate of growth of wealth is obviously much faster for CEOs of major corporations, but that does not undermine the reality that American society as a whole is improving its fiduciary situation. The CEOs in question are simply riding the leading crest of a figurative wave.
"Consider the following facts. In 1980, there were about one dozen billionaires in the United States, 13,500 households that made more than $1 million a year, and only about 600,000 with a net worth of more than $1 million."

Sample of Sources Used:

• Brush, Michael. "Is a CEO Worth 364 Times the Average Joe?" MSN Money. 5 Sept. 2007. 28 Sept. 2007 <http://articles.moneycentral.msn.com/Investing/CompanyFocus/IsACEOWorth364TimesAnAverageJoe.aspx?page=all>.
• D'Souza, Dinesh. "They Deserve Every Penny." CEO Magazine (Feb. 2002): 55-58.

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