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In the media recently there as been much said of many of todays executives receiving pay and compensation packages that are often too excessive and the disparity between CEOs and the average worker pay keeps widening To many people the continuing explosion in the pay of chief executives seems little short of obscene reflecting the arrogant use of power by top executives to enrich themselves at the expense of stockholders and workers To others who defend the trend it represents just rewards for successful efforts to enhance shareholder wealth To determine which view is more accurate this paper will provide answers to the question should CEOs make such exorbitant salaries Information will on the different influences of CEO pay how have they varied from the average worker and do they deserve it This paper will reflect the position that CEOs do not deserve such exorbitant salaries In a study by Graef Crystal done in 1973 on CEOs of major companies found that CEOs earned about 45 times that of the average worker The pay gap continued to rise in 1990 to 140 times and today it is just below 500 times that of the average worker Executive Excess 2002 It is the position of Bob Kievra 2003 that corporations need to supply large compensation packages to attract and retain good management personnel This is often negotiated by forecasting compensation packages that are based on the projected increases in shareholders wealth as a result of the anticipated increase in management performance If stockholder wealth is a result of management performance then shareholders should be able to justify high executive pay However recent studies have suggested that CEO pay is not linked to performance Gomez-Mejia Luis Wiseman Robert M 1997 but rather their influence over the board of directors as well as a strong relationship between a companys size on executive pay In a study Sridharan 1996 proposes CEO influence on his board of directors is a
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