The Compensation Conundrum

Executive compensation has grown by leaps and bounds over the last two decades. By 2003, the average large firm CEO made 500 times what the average worker made. In the aggregate, during the five-year period 1998-2002, compensation paid to the top five executives at 1500 large public corporations totaled roughly $100 billion.


Yet, we live in an era in which many occupations carry such vast rewards. Lead actors routinely earn $20 million per film. The NBA's average salary is over $4 million per year. Top investment bankers can earn annual bonuses of $5 to $15 million. Unless one's objection is solely based on the size of executive compensation, perhaps for redistributionist reasons, critics of executive compensation must be able to distinguish corporate managers from these other highly paid occupations.

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