The solution to CEO Compensation
Congressman Barney Frank introduced H.R. 42918, "The Protection Against Executive Compensation Abuse Act" to address concern over escalating CEO compensation. The legislation doesn't set any limits on individual CEO compensation but increases the requirements for the amount of information that needs to be provided to shareholders about management pay packages and thereby empowers shareholders to take action against management abuse and self-dealing.
1. Should there be legislation that goes another step beyond what Congressman Frank has introduced and caps CEO compensation so that it will be more in line with compensation levels throughout the organization? Why or why not?
2. What should be the determinants for a CEO's salary? List and describe at least three.
3. Does public awareness of the CEO's salary influence the branding of an organization? How? Give two examples, one negative and another positive.