Executive Compensation Research Paper Example | Topics and Well Written Essays - 750 words

Executive Compensation - Research Paper ExampleThis essay demonstrates that Stumpff (2011) lamented that in the past three decades, executive compensation has been on a brace rise contrary to the growth of the average salary for employees, companies profitability, and even the national economy. In particular, between 1984 and 2004, it is reported that the executive compensation had recorded as the firm growth of 8.5% annually whilst the growth of go withs profitability only grew by 2.9% annually and the growth of per capita over the same period was only 2.9%. Stumpff (2011) promote added that by 2006, company executives were earning 400 times more than average employees in America and the compensation was seemingly pegged on the size of the company and not of necessity the performance of the company.In a natural sense, if executive compensation was a reflection of a companys performance then there would have been an capable growth of employees compensation to reflect the increa sed profitability. Moreover, if the executive compensation would have been directly pegged on the financial performance of a company then it would not have recorded a steady growth, this is because the cyclical nature of business performance would have equally meant that executive compensation fluctuates rather than remain steady. Conclusively, this submit study asserts that executive compensation does not necessarily reflect the financial performance of an organization and also at times, it is excess especially when a company is performing poorly.