Some individuals are of the opinion that CEOs of large organizations receive much higher salaries than standard employees is important, while others hold the view that this trend is unfair. Although both views hold merit, I agree more with the former perspective.
On the one hand, supporters of high executive salaries argue that directors shoulder responsibilities far greater than regular staff. The first reason is that directors can generate a large amount of money to the company. When their plans or products achieve succeed, they can receive great income and distribute to each employees a quiet high salary. For example, in Vietnam, the electric cars of Vinfast company were attracted many customers and received truth from local people. As a result, their products sell well in the market, appear everywhere in the road and earn a large amount of income to the company. Another important reason is that directors are responsible for major decision-making that impacts thousands of jobs. This is because when their plans happen successfully, they can have a high income and use that to recruit more employees. For instance, Vinamilk, a Vietnamese brand, has been successful for many years with familiar products such as fresh milk, yogurt, and cheese. As a result, its logo has become highly recognizable, and many low-skilled workers were applied for this company.
On the other hand, critics claim that the income gap between directors and employees has become excessively wide. A primary reason for this is that corporate success depends on teamwork, not just top-level management. This is because successfully executing a project or a plan, it requires the collective effort of workforce labour combine with stategic senior executives to achieve the greatest performance. For example, in Vietnam, Vinfast company when they want to generate an electric car, they need planners, designers, manufacturers, promoters. As a result, this company not only can create comprehensive cars to launch to the market, but also it’s labour productivity can be boosted. Another key reason is that a huge salary gap creates inequality and lowers staff morale. When the income disparity between standard employees and senior executives is too far, it can lead to feelings of jealousy and annoyment over such injustice. For instance, the CEOs of S&P company in the US earn $16.3M per year, while the income of normal employees is only $200.000. Therefore, some employees can have greed and unethical behaviours, and reduce the company’s efficiency in the long run.
In conclusion, although high salaries for directors can be justified, excessive income inequality within organizations is unfair and potentially harmful. A more balanced salary distribution would benefit both employees and companies in the long term.