Ethical Dilemma

Ethical dilemma, What would you do?
Executive Compensation

In 2017, the CEO-to-worker pay ratio was about 361:1.65 (Links to an external site.) Oracle’s co-CEOs made about $25.3 million each in 2018.66 (Links to an external site.) A minimum wage full-time employee at Walmart would have to work more than 1,500 hours to earn as much as the Walmart CEO makes in 1 hour.67 (Links to an external site.) Some say top executives are being overpaid; Fortune 500 CEOs all make millions.

However, not everyone agrees. In capitalist countries, talented CEOs, like in pro sports, are entitled to fetch their price. Top executives should be paid multimillion-dollar compensation packages; after all, if it weren’t for effective CEOs, companies would not be making the millions of dollars of profits they make each year. CEOs deserve a piece of the pie they help create.

Questions to answer:

1. Do executives deserve to make 300 times more than the average worker?
2. Is it ethical for managers to take large pay increases when laying off employees?
3. Is it ethical for managers to get pay raises when their companies lose money?
4. Are companies being socially responsible when paying executives premium compensation?

Sources: Information from AFL-CIO, “Executive Paywatch,” https://aflcio.org/paywatch (Links to an external site.) (retrieved March 30, 2019); https://www.bloomberg.com/graphics/ceo-pay-ratio/ (Links to an external site.) (retrieved October 31, 2018). https://www.marketwatch.com/story/walmart-ceos-salary-is-1188-times-the-median-employees-2018–04–23 (Links to an external site.) (retrieved October 31, 2018); R. Lowenstein, “Is Any CEO Worth $189,000 per hour?” Businessweek (February 20–26, 2012), pp. 8–9; R. Fisman, T. Sullivan, “In Defense of the CEO,” Wall Street Journal (January 12–13, 2013), pp. C1–C2.