Business - CEO Compensation Ethical Term Paper

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3. Does public awareness of the CEO's salary influence the branding of an organization? How? Give two examples, one negative and another positive.

It is perfectly understandable that public awareness of CEO salaries play a role in establishing corresponding attitudes toward the corporate Brand. Where corporations demonstrate socially responsible concern and altruism in the manner exhibited by corporate executives like Bill Gates of Microsoft and Ted Turner, or incorporated within the mission statements of Google, the corporate brand or public image is not necessarily harmed by public awareness of very lucrative executive compensation packages.

On the other hand, public awareness of corporate greed, social irresponsibility, and lucrative executive compensation likely undermines the maintenance of a positive corporate image or brand.

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Typical examples would include Circuit City, whose CEO, Philip Schoon's "wage-management initiative" resulted in the firing of 3,400 $12-per hour employees in order to replace them with employees earning $8 an hour, while Schoon himself earned $7 million (Lewis 2008). Likewise, Sprint CEO Gary Forsee's $21 million payout coincided with the loss of 4,000 jobs at Sprint. Negative public perception is also a risk for charitable organizations, where directors earn salaries generated from charitable contributions. One of the best recent illustrations of the power of negative publicity associated with the disclosure in the aftermath of September 11th that the American Red Cross allocated charitable contributions very differently from public expectations......

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