CEOs in Fortune 500 companies raking in 129 times their 'ideal salaries'.Byline: ANI Washington, Nov 4 (ANI): CEOs in 35 of the top Fortune 500 companies were overpaid o·ver·pay v. o·ver·paid , o·ver·pay·ing, o·ver·pays v.tr. 1. To pay (a party) too much. 2. To pay an amount in excess of (a sum due). v.intr. To pay too much. by about 129 times their "ideal salaries" in 2008, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. a researcher at Purdue University. Venkat Venkatasubramanian, a professor of chemical engineering, wanted to know if Chief executives in top-notch multinational companies are being fairly paid or not. "One of the most pressing economic and corporate governance Corporate Governance The relationship between all the stakeholders in a company. This includes the shareholders, directors, and management of a company, as defined by the corporate charter, bylaws, formal policy, and rule of law. issues of the day is how to determine fair pay packages for CEOs. The proposed theory allows us to compute what the fair pay is for a CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , including bonuses and stock options, under ideal conditions," said Venkatasubramanian. The ratio of CEO pay to the lowest employee salary has gone up from about 40-to-1 in the 1970s to as high as 344-to-1 in recent years in the United States. But, the ratio has remained around 20-to-1 in Europe and 11-to-1 in Japan, according to available data, he said. Using the new analysis method, he estimated that the 2008 salaries of the top 35 CEOs in the United States were about 129 times their ideal fair salaries. CEOs in the Standard and Poor's Noun 1. Standard and Poor's - a broadly based stock market index Standard and Poor's Index 500 averaged about 50 times their fair pay, raising questions about the efficiency of the free market to properly determine fair CEO pay, he said. "You might ask why a chemical engineer is concerned with economics and CEO salaries. Well, it turns out that the same concepts and mathematics used to solve problems in statistical thermodynamics and information theory also can be applied to economic issues, such as the determination of fair CEO salaries," said Venkatasubramanian. The findings of his study appeared in the online open-access journal Entropy. (ANI) Copyright 2009 Asian News International The Asian News International (ANI) agency provides multimedia news to China and 50 bureaus in India. It covers virtually all of South Asia since its foundation and presently claims, on its official website, to be the leading South Asia-wide news agency. (ANI) - All Rights Reserved. Provided by Syndigate.info an Albawaba.com company |
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