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Should the salary of the ceo be raised or not

Assignment Help Business Law and Ethics
Reference no: EM13866048

Ethical Scenario

You are Chairman of the Board of a fairly successful company. Many of the shareholders have been complaining about excessive compensation for the CEO of your firm, especially since employee wages are very low. They cite a statement by Warren Buffett that "the ability of corporations to rein in skyrocketing CEO pay is the ‘acid test' of corporate governance reform." You find that the CEO earns $22 million a year and the lowest paid worker in the company earns $22,000. This ratio of 1000:1 seems a bit high to you. A recent study published by the Economic Policy Institute indicated that CEOs at large firms in the United States make about 300 times more than the typical worker. Other members of the Board feel that since the stock has been going up, the salary for the CEO should be raised. Should the salary of the CEO be raised or not? If it should be raised, by how much? Should the salary of the CEO be decreased? Identify at least 3 courses of actions or alternatives.

1 What is the ethical dilemma or issue?

2 What are the alternatives or possible courses of action? Identify at least 3 alternatives.

3 What are your recommendations? In other words, of the several alternatives you identified, what do you think the company should do?

4 What is your rationale for your recommendations? In other words, why do you recommend this course of action?

Reference no: EM13866048

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