Is it logical that the average salary of Chief Executive Office, also known as the CEO, has doubled more than 500 times since 1980? It is unbelievable that their salaries have doubled more than 500 times in less than 40 years. This issue has made CEO’s salary become a controversial topic. Some employees say that CEOs do not deserve that amount of money. The reason as to why the owners of companies offer large amounts of money is to attract established and successful people to manage their companies. They feel that excellent leadership is worth paying a fortune for. People who think CEOs are overpaid feel that the CEOs sit back and make many decisions while the actual work is done by the executives and the employees who work under the executives. It is a fact that the executives and employees execute the tasks that make the company successful. However, the executives cannot make the company successful unless they execute the CEO’s decisions. It is, therefore, logical and fair to give a huge amount of money as payment to a CEO who generates profit for the company by his or her ideas and decisions.
“People feel disconnected from the CEO. They are not willing to share with management what could be fixed or improved. The people on the ground don’t feel that top management understands them,” Eleanor Bloxham said*. It is true that the high income enables well paid CEOs to live a lush life. However, the CEO cannot achieve this position until he or she has acquired a huge amount of knowledge in management and life. Therefore, the CEO recognizes that if he or she ignores the company’s consumers or employees, the company will not make profit.
Reduction in the company’s profit is one of the consequences of giving the CEO a high salary. Although no one would argue that this is a fact, it is not true. The company does not pay that amount of money unless the CEO generates this profit. When the company decides to offer that amount of money, they offer it to the person himself or herself. In other words, the company pays that amount of money to be managed by the CEO’s experience.
Finally, some people think that the CEO makes decisions and gives other employees tasks to run the company. The CEO also creates the company’s goals. Creating the company’s goals is as important as working to achieve these goals. Also, CEO’s decisions are very important, hard to make, and have many probabilities. Every day the CEO has to make an important decision which may determine whether a company will grow or fail. With one good decision, the CEO might generate or save multi-million dollars in profit. Equally, one bad decision might lose multi-million dollars from the company’s income.
In conclusion, even though the executives and employees do all tasks in the company, they cannot work without the CEO’s decisions. The CEO has to be a creative person who thinks outside the box. Therefore, the CEOs deserve that amount of money. Several reasons make CEOs deserve their salaries: Their high salaries do not affect their performance, their ideas lead companies to make large high profits, and the CEO’s decisions are not less important than working to achieve the company’s goals.