Are CEOs paid too much? Should their pay be regulated?
Take a look at the Ethics & Strategy feature on page 240(strategic management and competitive advantage fifth edition). Do you think any one executive is worth the salaries that many of them earn? Some people say yes and others say no. Also, some argue that the financial crisis in 2008 was caused in part by the compensation financial company CEOs received in 2007?
The basic argument is CEO compensation usually includes a stock option component and these options encourage CEOs to engage in risky activities (maybe too risky in the case of financial services) in order to increase the stock price. While increasing the stock price is usually in the best interest of investors, did CEOs of financial services companies take more than reasonable risks in the early 2000s in order to crank up the stock price and thereby pocket huge gains from cashing in their options?
Provide good arguments for your stance. Do some basic research on this issue and provide one or two sources that back up your argument.
(450 words & citation)