Large companies should pay higher salaries to CEOs

Large companies should pay higher salaries to CEOs and executives compared to other workers. To what extent do you agree or disagree?

Model Solution

The question of whether large companies should pay higher salaries to CEOs and executives compared to ordinary workers is widely debated. Some argue that executives deserve significantly higher pay because of their responsibilities, while others believe such income disparity is unfair. I partly agree that higher salaries for CEOs are justified, but the gap should not be excessively wide.

One reason for paying executives more is the scale of responsibility they carry. A CEO’s decisions can influence thousands of jobs, shareholder profits, and the long-term success of the organisation. For example, when a company like Apple or Tesla makes strategic choices, the outcomes affect global markets. Such responsibility requires exceptional leadership, vision, and risk management skills, which justifies higher compensation.

Furthermore, competitive salaries are necessary to attract and retain top talent. Executives often possess years of experience, advanced qualifications, and unique skills that are not easily replaceable. Offering substantial pay ensures companies can secure capable leaders who drive growth and innovation. In this sense, higher salaries serve as motivation for top-level performance.

However, excessive income gaps between executives and workers can create resentment and reduce morale. If employees feel undervalued while executives earn millions, productivity and loyalty may decline. According to a 2022 report by Oxfam, the pay of CEOs in some multinational companies was over 200 times higher than that of their average employees, raising concerns about inequality. Companies that adopt a more balanced pay structure often foster stronger workplace harmony and long-term sustainability.

In conclusion, CEOs and executives deserve higher salaries because of their responsibility and expertise, but the difference should remain reasonable. Companies should strike a balance where leaders are rewarded fairly while ordinary workers also receive adequate compensation to feel respected and motivated.