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Are Ceos Overpaid

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Over the past 15 to 20 years more and more CEOs have been scrutinized and the typical CEO's pay is largely driven by market factors. CEOs pay is strongly related to stock performance.
Because of more bureaucracy, the CEO's job has become increasingly more difficult over the past decade. In fact some would even argue that they are not paid enough and should be paid more. CEOs are being scrutinized more than ever. Some have taken on a celebrity persona such as Steve Jobs, Bill Gates, and Jack Welch. The fact of the matter is their pay is driven by market forces. You don't really hear of athletes being scrutinized like CEOs. However, since the collapse of companies such as Enron, WorldCom, and Tyco, their exposure has put them in the forefront of our society. CEOs are not unique. Other industries with similar backgrounds have earned just as well in the last decade. This includes top lawyers, athletes and top financial executives.
Kaplan contends that it would be difficult to understand how pay increase could be driven by non-market forces when pay to athletes, lawyers and other groups have increased just as much. Their pay is strongly related to stock performance. Kaplan's recent analysis of CEO pays in a given year found that CEOs in the top 20% of actual pay generate stock returns 60% greater.
This is greater than other firms in their industries over the past three years. In addition, CEOs from firms in the bottom 20% of actual pay underperformed their industries by almost 20% over the past three years. Furthermore, most of the financial CEOs compensation is tied directly to the stock price and since the demise of those sectors; many CEOs have lost millions, if not their job!
In this Essay we are going to look at all the factors CEOs go through from fraud, Sarbanes-Oxley
Legislation and the difficulty corporations are faced

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