I came across an interesting article in the Wall Street Journal about how more and more companies are taking into account a CEOs net worth and past earnings in order to justify reducing or limiting their compensation. I encourage you to read the article, which can be found in its entirety at Yahoo! Finance.
The article states that Nearly 15% of Fortune 500 firms said they took such “accumulated wealth” into account in setting 2007 executive pay, up from 8.4% in 2006. So it certainly isn’t the norm, but it does look like it is an increasing trend. Even though there has been increased scrutiny on executive compensation, is this a fair practice?
How Much is Too Much?
That is the question, and is there even an answer? Who is it to decide how much wealth is too much? Of course, when asking the typical working class person, they probably thing everyone making six-figures or more is making too much, but isn’t it all relative? One could argue that once someone has tens, or hundreds of millions of dollars that they don’t need to continue to pile on the millions, but where is that line drawn, and is it the same for everyone?
I don’t know the right answer, but I do have some thoughts on the topic. But, I want to ask you first. What do you think? Is this practice fair, unfair, or make no difference? I’m sure there are a number of different opinions on this topic, and feel free to elaborate on them. I’ll chime in later today after the discussion gets started and share my point of view.
Incoming search terms:
- ceo pay poll
- fair worth to ceo salary
- how executive compensation limits hurts economy
- polls on limiting
- the fairness of the CEO’s pay?
Don't Miss: Scottrade Review - $7 Trades and Get 3 Free Credit Scores and Hot Credit Card Deals
Filed Under: Polls
About the Author: Jeremy Vohwinkle is a Chartered Retirement Planning Counselor® and spent a few years working as a financial planner. Today, he helps people make the most of their money by writing about personal finance here and elsewhere on the web. Jeremy is also Coach at Adaptu and a regular contributor for other publications such as Intuit, and American Express. Be sure to follow Jeremy on Twitter or Google+.