Question
Now, read the excerpt on ethical Dilemmas below. Ethical dilemma: What would you do? Executive Compensation In 2017, the CEO-to-worker pay ratio was about 361:1.65.
Now, read the excerpt on ethical Dilemmas below.
Ethical dilemma: What would you do? Executive Compensation
In 2017, the CEO-to-worker pay ratio was about 361:1.65. Links to an external site. Oracle's co-CEOs made about $25.3 million each in 2018.66Links to an external site. A minimum wage full-time employee at Walmart would have to work more than 1,500 hours to earn as much as the Walmart CEO makes in 1 hour.67Links to an external site.Some say top executives are overpaid; Fortune 500 CEOs make millions.
However, not everyone agrees. In capitalist countries, talented CEOs are entitled to fetch their price, like in pro sports. Top executives should be paid multimillion-dollar compensation packages; if it weren't for influential CEOs, companies would not be making the millions of dollars of profits they make each year. CEOs deserve a piece of the pie they help create.
Answer the following questions:
- Do executives deserve to make more (the above example is three hundred words times) than the average worker? While there is likely a popular opinion, I'd challenge you to think through the "devil's advocate" perspective and think of why executives deserve to make more.
- Is it ethical for managers to take significant pay increases when laying off employees or when the companies lose money?
- Do some research into alternative management/pay structures. Locate an alternative pay structure and explain how this improves compensation's ethics and/or equity. Where is the company today, and was the alternative design successful? Need some help finding alternative arrangements? Check out the below resources. You are welcome to use one of the below resources to identify a company (it does not have to be hospitality) or find your examples:
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