Are high salary expectations by top tier a sign of greed?
It does pay good to be the chief executive of a top company. Salaries of top corporate bosses are soaring and have shown exponential rise over the years.
The total remuneration includes salaries, stock options, commissions and various other allowances among other tangible and intangible benefits.
Are they being selfish or do they deserve the pay?
No, it is not greed.Jobs are getting bigger and diverse - The top jobs and the potential risks associated with them have grown immensely. The jobs at the bottom of the career ladder haven’t change drastically in nature.
Globalisation, rising market competition and technology advancement are some of the factors that contribute to this. Thus, if the risks are high, it is fair to expect high rewards in return.
Only few people have the required skills - Top executives have much more responsibilities as compared to an average employee of the same company. The roles and responsibilities handled by the top executives require exceptional commitment and diverse skills along with the potential reputational risk if something goes awry. The common employee does not face this high amount of risk in day-to-day activities.
Competitive Market - Gone are the days when seniority was rewarded more than merit. In today’s cut-throat competitive world, merit and results are primarily awarded, and not the age. Today, executives do not mind jumping ship if better overall packages are offered in a different organisation for their talents.
Performance-related Pay-checks - The prime factor behind rise in the pay of the top executives is the increased appreciation in the form of performance incentives. The amount of business and profits the top executives generate is the reason why companies are willing to pay them higher to secure their talent. The rewards do not always go up, but the layman turns a blind eye to this side of the coin and criticise the rising pay of the executives.
Yes, it is being greedy. An increasing gap can demotivate employees - The size of the income gap between executives and workers is uncomfortable and vast.
The employees perform the real grind of executing the plans but are underpaid or paid only fixed salaries with limited incentives, which leads to dissatisfaction among the employees.
Entry and Mid-Level Employees are neglected - Once the strategies, policies and business decisions are made, the employees down the hierarchy chain are the ones who put in endless hours just to be paid in peanuts year after year. It is unfair to neglect the workforce and shower only the top executives with various rewards.
This increases the financial insecurity as well as indirectly creates economic gap in a broader term.
No benchmark for CEO performance - The average employee is judged if he/she has met the assigned target or not, a fixed structure with incentives capped at a limit.
Top executives are not judged with a fixed criterion and get wealthier faster than the employee for the same year and same number of hours put in.
If the business is increasing, executives are getting richer and employees are rewarded in a biased manner, it leads one to believe that the top executives are being selfish and greedy.
The size of the business and the complexities involved in them make the role of CEO/COO entirely different as compared to the entry-level or median employee. A comparison cannot be made between the two only on philosophical level bypassing the real-time risks and responsibilities of any CEO/COO.
But at this rate of ever-increasing financial gap between the two, the remuneration the CEOs and top managers get does not seem to be fair and justified.
