CEO Compensation Essay Example | Topics and Well Written Essays - 500 words

CEO Compensation - Essay Example y, the works that are expected for the CEO to perform, and the economic status of the company, if it is gaining much for a certain period that will qualify whether the CEO deserved the amount of pay. As noted by Solomon (2007), survey says that the CEOs in the US are really overpaid because there is â€Å"an absence of objective ways to measure an executive performance†. Secondly, much is expected from an American company so these companies live up with the expectations. Tough competitions set in, and to stay on â€Å"top†, companies must hire the â€Å"best† CEO to run their company. And the â€Å"best way† to have the â€Å"best† CEO to come and stay in the company is to lure them with excessive salaries and benefits even before they will produce results as what most CEOs in the US enjoy now. Japanese CEOs generally received much lower levels of compensation compared to their counterparts in the US. As reported by Wiseman and Del Jones (2009) in the USA Today, CEOs of big companies only earned an average of $809, 000 in 2003, with a difference of $11.4 million compared with the CEOs of the US. This fact alone, however, is not sufficient to imply that U.S. CEOs are overpaid. It is because big companies in Japan are generally smaller compared to big companies in the US. Relatively, it is unfair to compare the compensation received by CEOs of small companies to big companies. On the other hand, the practices of US companies in encouraging CEOs to join them are not being practiced in Japan. As Wiseman and Del Jones (2009) noted â€Å"Japanese firms rarely poach talent from rival firms, outbidding each other for management superstars†. Usually, CEOs of companies in Japan were previously rank-and-file employees of the company they are working with who worked hard for th e company for several years until they reached the top position. Chief executive officers of US companies are very much benefited when there is an increase if the company’s value within a certain period.