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Ceo Pay And Ethics Essay

796 words - 4 pages

The CEO of General Electric (GE) Jack Welch had said he only had three jobs: selecting the right people, allocating capital resources, and spreading ideas quickly. When talking to hundreds of GE managers Welch used to ask them not only about their ideas but who they have shared their ideas with, and who else has adopted them. He was the head of GE from 1981 till 2001. In 1980, the year before Welch became CEO, GE recorded revenues of roughly $26.8 billion. In 2000, the year before he left, the revenues increased to nearly $130 billion. When he left GE, the company had gone from a market value of $14 billion to one of more than $410 billion at the end of 2004, making it the most valuable and ...view middle of the document...

If there was to be a leadership scale of sorts, it will be balanced between respect and responsibility. When leaders instill respect as a value, they foster sense of partnership, equality and fairness. When responsibility is prevalent, each person is willing to take initiative and act for the good of the entire organization.

When the economy slowed down in the last decade, CEO pay fell sharply at many companies. Corporate boards also seem to be acknowledging criticism of executive pay from shareholders and the public. Some companies have reduced discretionary bonuses and linked executive pay more closely to performance metrics like revenue and share price. Last year, companies also began to hold shareholder votes on executive pay packages, so-called "say on pay" polls required by Dodd-Frank, the Wall Street reform law (Singer, 2012). These new "say on pay" votes, though nonbinding, have caused some companies to make a greater proportion of pay contingent on chief executives' achievement of rigorous performance goals. Some companies have even eliminated stock option awards — the grants of stock that executives are able to buy at a fixed price — in favor of full-value stock awards that vest only if executives meet specified goals.
The near-crash of the American financial system stirred a lot of questions about the ethical culture of Wall Street (or the absence of such) (ERC, 2010). The gap be¬tween the boss and workers...

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