Salaries And Compensation Packages Should Be Regulated

1. Introduction Currently, there is an increasing argument about whether CEOs’ salaries and compensation packages have become excessive, consequently, should be regulated. According to the High Pay Centre (n.d., as cited in, West, 2016) and the Tim Bush (n.d., as cited in, West, 2016), chief executives from FTSE 100 received a salary of  £4.96m a year which is 180 times more than the average UK employees’. This essay argues that the compensation and salaries for chief executives are excessive, therefore, should be regulated. In this essay, the reasons for why CEOs’ compensation is excessive will first be argued, then the stakeholders’ power and influences on companies’ performances will be discussed. 1. Excessive compensation It is believed that there has been an extraordinary growth of CEOs’ salaries in recent years, which could lead to an excessive compensation (Mishel and Davis, 2015). It could be augured that the high pay for CEOs is simply a reflection of the market for skills (Bebchuk and Fried, 2004, as cited in Mishel and Divis, 2015). Kaplan (as cited in Mishel and Divis, 2015), who published an economic research working paper in 2012 claimed that the high salary for CEO is not unique, as other groups with similar backgrounds have also seen a dramatic growth in their salaries. For example, the salaries for corporate lawyers and hedge fund investors have also increased significantly. As a result, the rising CEOs’ pay might be a result of a competitive market forShow MoreRelatedExecutive Pay Should Be Regulated to Prevent Executives Paying Themselves Too Much1552 Words   |  7 Pages | |Executive pay should be regulated to prevent executives paying themselves too much. | | | Table of Contents 1. Introduction 3 2. Case of Bank of America CEO Compensation 3 3. Arguments on Steep Executive Compensation 4 4. 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