Monday, December 30, 2019

CEOs, Workers, and the Costs of Excess - 634 Words

CEOs, Workers, and the Costs of Excess Students Name Course Title May 3, 2013 CEOs, Workers, and the Costs of Excess The term executive pay has acquired bad connotations over the past decade or so and the recent Occupy Wall Street movement brought this issue back into public consciousness on a worldwide scale (Minder, 2013). In Switzerland, the parliament recently passed legislation that would limit executive compensation excesses under threat of fines and imprisonment and the European Parliament agreed to limit banker bonuses to twice their base salaries. Adding fuel to this fire was last months announcement that the golden parachute for departing Novartis Chairman Daniel Vasella would include a $78 million dollar severance payment. While these citizen protests and legislative actions could be an overreaction to a few isolated cases of executive compensation excess, the data suggests otherwise. According to the AFL-CIO (2013), executive pay has increased dramatically over the past several decades compared to worker compensation. In 1982, the pay ratio between executives and workers was 42:1, but by 2012 it had increased to 354:1. This 8.4-fold differential in compensation suggests that the productivity of executives has also increased 8.4-fold relative to productivity of workers. If executive pay is positively correlated with a firms bottom line, then higher pay should predict success. Unfortunately, researchers have found the opposite to be true. In the daysShow MoreRelatedEssay Human Resources Case Study 771015 Words   |  5 Pagesinsurance costs increased from $4,680 per year in 2000 to $9,869 in 2010. It becomes very alarming considering the companies profits have continued to shrink during the recent recession. This puts a huge burden on everyone in the company because drastic measures now have to be taken in order to keep Quality Auto Parts in business. The health committee came up with four options for Quality Auto Parts to take in hopes of keeping the business flourishing towards the future. It is obvious that the CEO ofRead MoreReduction of Costs to Maximize Profit Returns1602 Words   |  6 PagesReduction of Costs to Maximize Profit returns (Production Firms) Introduction Cost leadership implies that an organization or business tries to have low costs so that they can sell their products and services at low costs. This type of leadership strategy allows them to make profits even with low costs than their competitors. It places the business at a position where it can effectively compete on the basis of price with both the new entrants in the industry and existing competitors. It also createsRead MoreEnron Questionable Transactions Essay765 Words   |  4 PagesThe question which segment of its operations got Enron into difficulties is simple to answer, everything. Almost every all segments of their operation were improper. 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Looking at the business landscape of the steel industry, it is amazing to see how well Nucor has done considering the industry is so competitive and has relatively low profitability. Using Porter’s model, the threat of rivalry is high due to weak domestic demand, excess global capacityRead MoreHistory of Bp Oil Spill2349 Words   |  10 Pagesthe Deepwater Horizon accident, BP had also suffered major accidents in its oil production fields in Texas and Alaska. Its CEO, Lord John Browne, had greatly expanded the company by buying off other oil companies and cutting costs. Unfortunately, Frontline’s report suggests the company s sole focus on expansion and cost reduction was what caused the fatalities of BP’s workers. BP started out as a small joint British Persian oil company in the 1970s. However, a revolution in Iran had cut off BP’s

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