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Discussion Questions

1. Is it ethical for CEOs to be paid 500 times what other employees earn? Is it ethical for CEOs to accept compensation packages in the millions of dollars?

The CEOs must be paid on the basis of the performances and the achievements have been made in terms of the organization or a company. It is unethical that the CEOs get such a large amount of the pay as compared to the average pay of an employee. Employees work hard enough to ensure the progress of the company and are not rewarded enough as compared to the CEOs. They do deserve more than employees,but this should be on the basis of the goals or criteria set by the company. It is unethical forthe CEO to accept the compensation in the millions of dollars as if compared to the average pay of an employee. They work hard to meet the requirements and goals set by the organizations to meet or to complete before the deadlines. For which, employees give their hundred percent to meet the required result and still the pay is not enough in many cases. While the CEO compensation, which they receive, totally points out as being ethically not correct.

2. Discuss the potential for conflict of interest in CEO pay. Should a company's board of directors determine CEO pay?

The pay of CEOs must be determined on the basis of the performance or progress. This unjustified compensation must be avoided. One of the main reason is the involvement of the compensation consultant as they design and provide the plans for the job. When the hired compensation consultant makes changes, the compensation value increases;therefore there is a need for the increased compensation as well. The contact between the consultant and CEO can lead to increased compensation as well. The compensation must be determined on the basis of the statistic information of the progress been made.

3. As a shareholder, how do you feel about CEO pay? Is the high compensation of Michael Eisner, CEO of Disney, justified? How about that of Dennis Koslowski? Would you feel any differently if you were a shareholder in Tyco during Dennis Koslowski's tenure as CEO?

The CEO pay should be justified and should be based on the progress. This is not just if seen by the policies in which profits and performance-based pay are provided. It is unethical as well. In the Case of Michael Eisner, CEO of Disney he gets about 2% of the profit above the increased threshold annually. Only a fewhave complained about his unreasonable pay as he helped in creating almost $7 billion shareholder wealth since he joined the company years ago. The compensation of Koslowski is not justified clearly as is mentioned in the source. Being a shareholder, I would have felt the same way for CEO compensation.

4. Some critics have called for more government oversight of CEO compensation. Do you agree with this?

There is no need for the government to oversight the compensation of the CEOs. The reason for this is because there is corporate governance available to determine the compensation of the CEOs. They can determine it by the progress or performances of the CEOs. As I have mentioned already that board of the directors should focus on the compensation which is based on the performance and to avoid the conflict of the interest in CEO pay. Therefore, I do not agree with the oversight of the government about the pay or compensation of the CEO.

5. Discuss the ethics involved when a CEO manipulates financial information to influence a company's stock price. Is this practice acceptable as long as it is legal?

As CEOs can manipulate the financial information in possible ways. By manipulating financial information, they can find their way to set their beneficial options in. They try to find ways to interfere with the financial information and manipulate them according to their options they can fit in. This finding the ways to fit in the financial information can have an impact on the market. This can lead to a corrupt market at some point (Hour, 2012). This, of course, is ethically not right and not acceptable. This is the reason that the public wants to have a more regulated market or a free market in other words. This manipulation is not acceptable,but when it comes to being legal, it is only acceptable in this case as long as it is legal.

 

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