CEOs
Companies pay bonuses to their CEOs because they want to motivate them to perform better in the future, to encourage them in risk taking and to work hard and to succeed. Paying high bonuses is the best way to keep these people in the company; otherwise they might leave to the competitors of the company. I agree that the well-performed CEOs should be paid with high bonuses, but these bonuses should not only be compared with the past performance of the company itself, but also based on the better performance in contrast with their co
For giving bonuses to the under performing CEOs there are two cases:1. If they perform poorly for their company, they will under perform for their competitors, and they will under perform everywhere they go. When they perform worse than the past performance of the company and competitors. When the CEO's under perform compared with the past performance of the company however the company performs equal to or better than their competitors. In sum, I agree with the conclusion of the study that under performing CEOs should receive bonuses, but only for the first case that I explained above, meanwhile I strongly disagree with the conclusion of the study for the poor and inferior performing CEOs, which I explained in the second case. In this case, giving bonuses to poor performers is illogical. This would be the same case if they were to fire a normal employee for not fulfilling his duties. If they do not accomplish their duties, I would consider firing them instead of giving bonuses. If the company does not give a bonus to these people it might damage their incentive and risk taking, or worse, they may leave and search new job. In these circumstances I would consider firing the CEO. If the whole industry or economy is under performing it might not be their fault for the underperformance of the company. Shareholders of the company should not be afraid to lose these people to their competitors. If we give bonuses for underperformance we will be rewarding their poor performance.
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Acceptance Essays
