Executive Salaries And What It Means To The United States
Executive Salaries and What it
Means to our Economy
Ryan Kenny
Professor Risinit
Old Saybrook
20 November 2006
The economy of the United States is by far the largest and most powerful economy in the entire world. The average family income is roughly $40,000 a year and our GDP (Gross Domestic Product) is well over 10 trillion dollars. The next closest country is Japan with 4 trillion dollars of total GDP.(Johnson & Wales: Economics) The United States has so many large corporations it takes someone to run each one and it also take a lot of money to pay someone to be in charge of each one.
Top companies in the United States range from automobile manufacturers to household appliance manufacturers to telecommunication companies. The largest company in the United States under the category of net income is Citigroup which is in the banking industry. The CEO of Citigroup is Charles O. Prince. In 2005 Charles O. Prince raked in $22,994,729 in total compensation including stock option grants from Citigroup. The average employee would have to work 459 years to equal Charles O. Prince's 2005 compensation.(AUM)
Other benefits that CEOs harvest range from country club memberships to yacht expenses. Mattress King Simmons Bedding covers up to $105,000 in annual costs for the crew on CEO Charles Eitel's yacht. Eitel, who earned $998,000 in salary and bonus, makes the yacht available for corporate functions 30 days a year. (USA Today) The extra perks that CEOs acquire are mind-boggling for the average person to fathom. The ones to blame unfortunately are ourselves. Over the years there could have been investor involvement to stop this inflation of executive pay from happening. Sadly it seems too late.
Boards of directors are responsible for setting CEO pay. Directors have awarded compensation packages that go well beyond what is required to attract and hold on to executives and have rewarded even...
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