Published by:
Harvard Business Publishing
Length: 8 pages
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https://casecent.re/p/46459
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Abstract
Media critics charge that CEOs with outrageous salaries are running U.S. corporations into the ground. Politicians claim overpaid CEOs are the root cause of the U.S. competitiveness problem. Add a recessionary business climate to the fact that some CEOs earn 130 times more than their lowest paid employees and you have the makings of a populist rebellion. Most U.S. corporations use stock compensation to link company long-term performance to executive salaries. Rather than cut executive pay, corporations should extend incentive-based compensation plans to all employees, thus narrowing the salary gap and establishing pay-for- performance at every level of the organization.
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Abstract
Media critics charge that CEOs with outrageous salaries are running U.S. corporations into the ground. Politicians claim overpaid CEOs are the root cause of the U.S. competitiveness problem. Add a recessionary business climate to the fact that some CEOs earn 130 times more than their lowest paid employees and you have the makings of a populist rebellion. Most U.S. corporations use stock compensation to link company long-term performance to executive salaries. Rather than cut executive pay, corporations should extend incentive-based compensation plans to all employees, thus narrowing the salary gap and establishing pay-for- performance at every level of the organization.