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In the course of recent years, the compensation hone
for corporate CEOs has for some time involved discussion, particularly as of
late, as the wages of normal laborers have stagnated and monetary imbalance has
moved to the focal point of the national verbal confrontation. (Holmberg &
Schmitt, 2014). According to American and CEO Pay by The Rock Centre for
Corporate Governance at Stanford University in 2016, 74% of American believe
that CEOs are not paid the correct amount relative to the average worker.

Because a company’s pay structure is well thought out, CEO have more
responsibility than other workers, and CEOs spend more time working than
average workers, I believe that CEOs are worth the high pay.

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Firstly, some companies are willing to pay their CEO
with the high amount of money for a designated purpose. CEO compensation is a
serious problem, but high pay is not the main issue. The public and media pay
more attention to how much CEOs are paid instead comprehend the real
problem—how CEOs are paid (Jensen & Murphy, 1990). At most companies,
CEO’s pay comes from base salary and stock options. The amount of money they
will get depends on their performance. At that point, if a CEO gets a large
payment, it is likely that the company is successful. Then, why most companies
establish this payment strategy? Because they want to attract, retain, and
motivate their CEO to perform at the highest level (Kay, 2006). They want
something in return; for the sake of company’s future success. Pay-for-performance
is an outstanding installment payment-system that utilized by the most
organization on a worldwide level. This payment-system can expand the viability
of workers and in the meantime motivate them to enhance their work-performance
with a specific end goal to bring profit to the company. (Rehman & Ali,
2013). Since CEOs are the main key to determine whether and how well a company
will succeed, this supporting system is essential as it will influence their
CEO performance. This statement supported by graphic CEO Pay vs. Performance
from 2010-2014 from The Wall Street Journal in 2015, 300 top highest paid CEOs
are more likely to increase their performance and bring a positive return to
the stakeholder. 

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