Executive Compensation In Relation To Workers  

In the eighties and nineties, there was a lot of debate about executive compensation in relation to workers. Critics felt that executives were being paid too much and the amount was not at all in line with what factors affecting the organization.

Although, there was so much noise and ballyhoo about executive compensation in relation to workers, the executive compensation has only been ballooning in relation to workers. In 2005, executive compensation increased by whopping 298.2 percent while corporate profits increased by 106.7 percent and workers just received an increase by 4.3 percent.

According to all the studies conducted, there seems to be no relationship between executive compensation, profit and performance. But executive compensation is nearly parallel with the Standard and Poor 500. Most executives also receive stock options in addition to money. In fact, in the recent years, giving stock options to executives has become extremely popular. But many supporters of executive compensation contend that the executive population is smaller than the average worker population and it is but natural that executive compensation will be a lot more volatile.

However, the fact remains that whether an organization makes profit or loss, or the stock goes up or down, the average worker gets paid nearly the same with hardly any increase. In contrast, executive compensation changes and increases by leaps and bounds giving an indication that executives work harder than anyone else!

When comparing executive compensation in relation to workers, it is seen that executives are worth almost 300 percent more but average workers are worth only 4.3 percent more.

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Executive Compensation In Relation To Workers




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