The two top executives of Ford motors received about $ 100 million in the year 2010 in total compensation – for? It’s claimed that they saved company from bankruptcy and increased in sales by 19% compared to the year 2009. Allan Mulally ($56. 5 million) – Ford CEO and Executive Chairman Bill Ford ($42.4 million) paid excessively in company compensation (Dominguez R., 2011).
The question is, are those top executives really be rewarded for their performance or should reduced their compensation in this sick economy?
Compensation is a microeconomics issue which reflects unequal distribution of wealth. Many authors and op-ed contributors wrote in newspapers and journals about unequal distribution of wealth and focused on a common man, is he conscious about this unequal distribution system.
For instance; Kletzer L., Reed S., Coffman C. W. and others criticized Meryl Lynch’s bonus package of $ 4-5 billion where as the company itself was on oxygen!
Norton M. I. (2011) wrote in the New York Times, “Living Beyond Your Means”, focused an average Americans wished about more equal distribution in wealth. The results they obtained from study were more distinctive then one has imagined or expected! In society about 80 % of wealth is acquired by top category, where no so space left for poor class.
Controversy is always going on about executive compensation and bottom line receivers. When the Wall Street shares bonus, the Main street is ready to criticize and arguments keep going…
Do we ask ourselves; is it necessary to pay top executives millions of dollars, because they are there, or should it be based on performance? As per Ira T. Kay (2006), pay for performance model has failed, and CEO also paid much sometimes even they failed (Woolard E., Jr., 2006)…
References
Coffman C. W., Kletzer L. and Reed S., (2009). Bonuses for Bad Performance. The New York Times. Retrieved from http://roomfordebate.blogs.nytimes.com/2009/01/29/bonuses-for-bad-performance/?scp=1&sq=bonus%20+%20performance&st=Search
Dominguez R. (2011, March 09). Ford rewards CEO Alan Mulally, Exec. Chief Bill Ford with $ 100M for rescuing company from bankruptcy. Daily News. Retrieved from http://www.nydailynews.com/money/2011/03/09/2011-03-09_ford_rewards_ceo _alan_mulally _exec _chief_bill_ford_with_100m_for_rescuing_compan.html
Kay I. T., (February 2006). Don’t Mess with CEO Pay. Across the Board. Conference Board Inc.
Norton M. I. (2011). Living Beyond Your Means: Rising Wealth Inequality: Should We Care? The New York Times. Retrieved from http://www.nytimes.com/roomfordebate/2011/03/21 /rising-wealth-inequality-should-we-care/living-beyond-your-means-when-youre-not-rich
Woolard E. Jr., (February 2006). CEOs Are Being Paid Too Much. Across the Board. Conference Board Inc.
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