It probably won’t ever be possible to resolve the societal debate over the proper amount of compensation that should rightly be awarded to top corporate executives. It may be no more achievable than national consensus on how to approach health care, taxes, or gender and racial equality.

People in business, though, generally take it for granted that the apt amount to pay CEOs and CFOs is best left in the hands of the company’s board of directors. Among the 20 or so folks who responded to our call to contribute to this forum — admittedly, an unscientifically assembled group — only one pitched an essay decrying high executive pay.

But there are legitimate questions. If top executives were paid half as much as they are, would companies come to harm? Would driven leaders possessing vision, knowledge, talent, and wisdom still want those jobs? Would investor behavior be any different? How about employee engagement?

There may indeed be an objective, optimal amount to pay each individual executive, given all the variables in play — company size and industry, company performance, peer-group compensation, and the executive’s track record and abilities, for example. But confidently identifying that optimal amount is such a complex task that few boards of publicly held companies attempt it without enlisting the services of a compensation consultant. And even so, who’s to say that the consultants’ recommendations are free of bias or based on the most relevant assumptions?

This package of opinion articles suggests numerous talking points for use in discussions on executive pay. As you absorb each one, think about whether the expressed logic is sound or assailable. Enjoy!

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One response to “Square-Off: Is Executive Pay Too Low, Too High, or Just Right?”

  1. My personal point of view there are no simple answers to this question on Is the executive pay is low or high or just right.

    I am sharing a few personal thoughts that could lead to reflection and take this conversation forward.
    1. In sports leagues and specifically in team games, top impact players have a compensation that is significantly many multiples of what excellent or above average player would earn in the same league. The compensation question is applicable here also.

    2. Should the executive compensation be aligned and can be objectively measured for delivering the performance goals in short, medium and long term and ensure sustenance and growth of organization in long term.
    3. A corollary to the above is for any leader or executive of an organization to achieve their performance goals, the dependencies are that their employees, partners and communities in which they operate collaborate and deliver their respective goals. I believe this is a bi-directional relationship and there has to be synergy to ensure executive, employees , partners achieve their goals to ensure mutual benefits and rewards. The question then is should there an optimal ratio for rewards of executive to rewards earned by employees, partners and communities.

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