Economic Issue Surrounding Executives Wages.docx

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ECONOMIC ISSUES SURROUNDING EXECUTIVES WAGES 1 Economic Issue Surrounding Executives Wages Jean Delois Jackson Columbian Southern University American Government Unit V111
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ECONOMIC ISSUES SURROUNDING EXECUTIVES WAGES 2 Economic Issues Surrounding Executive Wages Researchers in recent years have looked at executive pay, income inequality and the effects of globalization, but not at the same time. The Economic Policy Institute in 2015 found executive pay had grown by 99.7 percent between 1978 and 2014, while the average compensation for a private-sector production and nonsupervisory worker increased by just 10.9 percent. There has been agreement that trade, driven in part by bringing China into the world economy has caused a rise in income inequality in many high-income countries as well as the United States. Researchers looked at the increase in executive compensation as a sign of rising inequality. To examine the connection between executive pay and globalization, they looked at industry exports of top company officials and compensation matched up, which showed a 10 percent increase in exports which gave a 2 percent increase in the compensation of executives. In other words research suggest that executives are seeing pay gains partly because they're expanding into new markets, getting bonuses and perks because of their efforts of less authority or more political freedom. Some changes would be to keep the board chair independent of the company separate from the CEO, he would probably made a better decision on the pay of executives. There would be a need for having an advisory or mandatory vote on executive compensation plans of shareholders. If executive compensations are reduced it would improve corporate governance and further government regulations could be prevented. However it has been said that tax breaks to corporations are used to create a positive impact on the economy by using the incentives to create jobs, stimulate the economic spending with other taxes that help fund the government.
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