Inflated Executive Salaries Term Paper

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Executive Salaries are inflated.

'Bottom Line': Executive salaries are disproportionately high, causing a crisis of both economics and morale within American enterprises.

What is the justification behind a particular salary?

Encyclopedia Britannica defines a salary as a wage derived from human labor. What is the 'human labor' of an executive

Labor of executive involves managing company.

Labor of executive involves presenting a favorable image to the public.

Does the current labor of executives justify their current salaries?

Ways that high salaries of executives detract from company morale.

Ways that high salaries of executives are injurious to company economically.

Possible objections to lowering salaries.

Difficulty in recruiting potentially talented executives. Hard work done by executives -- '24-7' job

C. "Based on standards across the industry" (Letter to Editor, New York Times)

Responses to objections

Excessively high salaries encourages executives to go where money is, not because care about/believe in company

Excessively high salaries do not promote better far-reaching, far-thinking ideas for company.

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Salaries of company outpaces company's true growth, i.e. salary is not proportional to labor performed.

Microsoft Example -- increases not in proportion to company's profits.

Companies not doing as well can not reward executives in same way, encouraging quick bailouts of person at top when companies of management when companies go sour.

World.com….....

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