Presented byAnuj Papneja Jasveen Kaur Manjusha Nitesh Girdhar Shalini P.

Chandra

WHO ARE THE CEOs?

A Chief Executive Officer (CEO) is

Highest-ranking corporate officer or administrator in charge of total management of an organization. Reports to the board of directors.

Responsibilities
Primary responsibility:- to facilitate the design and accomplishment of the mission, vision and goals of the organization through effective leadership.

Responsibilities as a Communicator Decision maker Leader Manager executor

Two Decades of CEO Pay

Background

CEOs pay has increased significantly following the enactment of anti takeover laws passed in 1980s.
Resulted in CEOs receiving a large proportion of their compensation in the form of stocks and shares. By the year 2000, CEO salaries had jumped to almost $2.2 million on average.

Top CEO Salaries

CEOs are overpaid

The global survey conducted by Experian in May and June 2012 as part of the

Grant Thornton International Business Report

78% of Indian business leaders believe senior executives are paid too much. 89% -executive remuneration at public companies should be closely linked to performance targets. 70% -the shareholders should have greater involvement in establishing remuneration policy for senior executives at large public companies. 71% -public companies should disclose the remuneration policy and individual remuneration of executive and non-executive directors.

Example: Fred Goodwin

Fred Goodwin, Former Chief Executive of Royal Bank of Scotland Group

Impact of high salary

Widening gap between executive and average employees compensation
One

The relation between executive and average employees compensation

Two

Is it Justified?

"Pay for performance" Businesses becoming more complex, CEOs commanding greater pay. CEO's pay set by the compensation committee

Example :1
Allan Mulally, the new CEO of Ford, was featured on

the cover newspapers as having made $34 million in the first 4 months on the job.

Example :2

E. Gordon Gee, Vanderbilt University

making in excess of $1 million

Donald E Ross, President of Lynn University in

Florida,
annual pay package:- $5,042,315

In the end, the salary is appropriate because people are willing to pay it.

It is getting tougher and tougher to find talented and qualified executives.

It would be unfair to expect growth in the industries and companies while maintaining lower salaries for those responsible.

Why CEO Salaries Are Sky High?

Create jobs. Executives do a lot of things with a lot of pressure on them. Provide an incentive for innovation and risktaking. Attract, retain and motivate talented leaders

Conclusion

Return some equity to compensation of upper management and the individual contributors

Trust and respect salvaged Else, workers motivation, and resultant innovation, will plummet.