Amazon and their CEO Andrew Jassy, because I was very interested in the fact that last
year Amazon became the leader in the highest pay ratio at 6,474 to 1 with 99.6% of his
compensation being in the form of Stocks. Amazons CEO last year (2021) had a total
compensation of $212,701,169, while the median worker made $32,855.
In my personal opinion I feel like executive compensation can be a great tool to motive
management as well as allow the board to guide the company to meet their goals. However
there have been studies done showing that CEO who consistently receive compensation
that is higher than the average market has shown a tendency to become complacent and
over confident (Zyung,2022)
It is very important to have internal controls for payroll in place to prevent abuse and
fraud for CEO compensation. These controls should be tested by the auditor to ensure
there are no misstatement. These tests can include testing to see in the company’s payroll
records and authorization align with the terms of the executive compensation stated in
their contracts or from Board meeting notations. The Auditor should give special care to
verify that the proper authorization was made since a CEO has the power to override
authorization policies. Another important test to preform, especially in cases where a
majority of the compensation is in company stocks (such as with Andrew Jassy) would be
to determine the fair value for share-based payments.
https://aflcio.org/paywatch/highest-paid-ceos
Zyung, T.D.(2022). In retrospect: The influence of chief executive officers’ historical
relative pay on overconfidence. Strategic Organization, Aug 2022, Vol. 20 Issues 3,
pg627-651
Messier, W., Glover, S., & Prawitt, D. (2019, October 19). Auditing & Assurance Services: A
systematic approach. McGraw Hill. Retrieved September 15, 2022,
