Executive Officer Chief Executive Officers - 1692 Words

Chief Executive Officers (which will be referred to as CEOs for the remainder of this paper) is arguably the most prestigious position an individual can hold in the business world. There is no disputing the high level of responsibility necessary to manage the operations and resources of any company, while also being the key figure between the company’s board of directors and the stakeholders which are effected as a result of the company’s actions. Despite the high level of responsibility, it is worth asking a question that has been up for debate not just in recent years, but for the past several decades, which is whether or not CEO compensation can be justified? Just to put into perspective how much one of Canada’s highest-paid CEOs makes,†¦show more content†¦The short answer is no. I firmly believe that today’s CEOs are overpaid as a result of the use of stock options as a pay initiative; rewarding CEOs with huge severance packages regardless of whether they bring success to the company or not; and because they are essentially overpaid managers Stock Options are one of the Main Culprits for Overcompensation of CEOs If we break down how CEOs are generally paid we may look at their base salary, which can range from approximately $300,000 upwards to between 4 and 5 million for Canada’s top executives. What the average person may not be informed about is the additional compensation that is available to be earned from bonuses, stock options, and other payments on top of the base salary. Canada’s Highest earning CEO in 2015, Gerald W. Schwartz of Onex Corporation, made $86.5 Million of his total $87.9 Million salary from other such forms of compensation. Stock options are typically used as a form of compensation because they offer the CEO an incentive laden form of salary that in theory will make the CEO make decisions in the best interest of the shareholders, and if share prices go up they too are rewarded. Stock options are truly a no-lose situation for the CEO, because they are not required to pay for the options and in the event of share price