Question

On average, over 80% of a CEO's pay is connected to stock price, and thus, if the company does well, the CEO gets rewarded handsomely. In addition, some entrepreneur CEOs risk their family's livelihood and invest all their personal savings to start a company. They work twice as many hours a week as most American workers, and they provide motivation for new entrants into the market that there can be a major payoff. But is this payoff too high? Are American CEOs paid too much? Why, or why not?

Answer 1

I think it is better if we do not generalize the fact that the payoff of American CEO is too high because most of the CEOs are the most heavy worker of the organization and they work more than an average worker of the organization. The success of an organization depends quite a lot on the CEOs and leaders and in case of failures as well the CEO is the first one who is to be blamed and take the responsibility for. I believe that the Payment is high but given the risk of the work it is justified to a certain extent as well. A CEOs pay is connected and based on the stock price of an organization and therefore based on the performance of the organization the pay of the CEO varies hence I believe that the pay is performance is quite justified.