Are CEO's Paid Too Much?
CEO pay, even among companies whose market share and sales have slipped, is grossly unfair. "How bad are things? Here's one wise man's assessment: "About half of American industry has grossly unfair compensation systems where the top executives are paid too much," says Charlie Munger, Warren Buffett's partner at Berkshire Hathaway" (Kirkland 2006 78). The problem, as many critics see it, is the tremendous gulf between what CEOs earn and what the average worker takes home. "At 200 of America's largest companies, CEOs made an average of $11.5 million last year. A worker earning just under $40,000 annually would need 300 years to make that much... Overall, average CEO pay is now more than 100 times what the average worker makes. In 1980, it was 33 times average worker pay" (Anon 2006 1). Various other studies have confirmed this disparity: "In 2005, an average CEO was paid 821 times as much as a minimum wage earner who earns just $5.15 per hour. An average CEO earns more before lunchtime on the first day of work in the year th
The problem is not home location but means of checking up on telecommuters that they are actually working. "In a Manpower survey conducted during May and June, 31 percent of respondents said they were considering finding another job that was closer to home because of rising gasoline prices" (Anon 2006 2). When it comes to deciding on location for manufacturing plants in the U. As Dell announced plans for a new plant and distribution centers in India, it seems clear that, in order to save money that would reflect on the bottom line, most customer service and tech support will be housed overseas, since this is where the growth markets are. market, for Dell, seems stagnant at best (with Hewlett-Packard biting into Dell's market share) so opportunities for the future, such as they are in stronger price competition, will certainly lie overseas. Foreign automakers are locating plants closer to the ultimate consumer, thus saving on transportation costs. It follows a year of other stumbles. The enormous difference in pay between top management and the average worker is really nothing new. reflect state attributes associated with manufacturing location. , as important as economic factors are as well as convenience to transportation, studies indicate other priorities: "The studies found several attributes of a state's economy to be associated with the state's ability to attract new manufacturing investment.
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