The pay gap between executives and the average American worker has always been pretty big, and seems to have increased as the world's economy grows. But with the recent recession bringing the most desperate financial conditions the world has seen since the Great Depression, one could be excused for expecting this gap to be reduced.
However, the recession has only served to make things tougher for the American workforce as unemployment recently hit a 26-year high and companies made drastic cuts to salaries and working hours.
Surprisingly though, the position of the CEO seems to be little affected by the recession. Many people continue to be shocked by the excessive salaries and bonuses received by top executives. During the global financial slowdown, job stability appears to have actually improved for some corporate leaders, and many still enjoy size-able compensation even as they cut the salaries and positions of their staff.
It can be argued that company directors face a difficult balancing act during a recession - they must retain top executives and reward those who make the hard choices that will improve the bottom line often leading to jobs being cut and/or labour concessions. However, they must do their utmost to remain sensitive to the image portrayed to their employees, and in particular to those they may have just let go. It is very hard to accept the idea of business leaders reaping high rewards at a time when they're demanding sacrifices from their workers.
Hostilities can emerge when you consider that the companies who needed government bail-out cash in order to stay afloat, such as AIG, are also continuing to hand out excessive high-level bonuses.
Yet, with such large figures being quoted in the pay packets of top CEOs, the numbers can quickly lose any meaning as multi-million, or even multi-billion, dollar bonuses mean nothing to those earning less than a single percent of that. It is important for these numbers to be put into context.
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