Final Report - "distributive Justice: Executive Salaries"

Final Report - "Distributive Justice: Executive Salaries"

It's a known fact that the CEO's of today's businesses can make millions of dollars at their positions. However, is it fair, or even ethical, that they make so much more than the average worker does in the same company? I personally don't think that a CEO making that type of money is unethical. A CEO has many responsibilities at a company. They work well over the 40 hours an average worker works and have numerous extracurricular activities that they must attend to represent the company. The company and the shareholders are always aware of what the CEO is getting paid and can always hire another one for less pay. However, will the lower paid CEO be as experienced and as action oriented as the higher paid one?

Although this is not an issue of bluffing for profit, this case can also be analyzed using Albert Carr's notion that business is a game. Indeed it is a game in which the best player wins. CEO's can be considered the best players and by using their skill have beaten the game. The rewards of playing and winning this game are evident by the extremely high salaries that CEO's earn. Is it wrong to strive to become a CEO, accomplish the goal, and then be compensated for it? I don't think so. CEO's worked very hard for their jobs and continue to work hard at their jobs. They are seen as relaxed and laid back, but however, they are often very stressed out and demanded upon endlessly. They rightly deserve what they earn because it was never just given to them.

If we look at this case from an economic viewpoint, we can not righteously argue that CEO's make too much. Many of today's world economies are based on a capitalist system. This system consists of a free market economy. A market economy is based on market demand, which is the demand of all consumers (employers), in the marketplace (labor force) for a particular good or service (labor). Today's companies are more complex than ever before. An average person would probably not be able to run such a company. Which is why corporations seek for the few people in this labor force who possess the qualities necessary to be CEO. I'm sure that every business student's dream is to become CEO. However, realistically the chances a someone becoming CEO are very slim. Corporations must judge individuals and determine which one is more valuable than the another. An average worker is just that, average, someone who the company can easily replace. However, the CEO may be a person with invaluable experience and knowledge necessary to make the company profitable. The high salaries of CEOs are simply driven by the economic forces at hand. Corporations will be in need of that one person who will possess these qualities. Since there are few individual who fall into this category, companies are