The purpose of this project is to bring the real world into the classroom and learn how to analyze a compensation issue and provide recommendations (similar to how a consultant would conduct such an analysis). You are required to choose a relevant situation pertaining to Compensation. You can choose this situation from the internet, a newspaper article, a magazine article (or even a fictional movie or TV episode) etc. You should summarize the situation, analyze the situation using theories from the course, and provide recommendations. The written report should be a max of 15 pages (double spaced; 12-point font; 1-inch margins; properly referenced). This report should present the situation, analyze (using theories) and provide recommendations.

Introduction

The executives of an organization are paid higher because their actions and decisions have more impact on the organization than that of the employees. Their actions or inactions can lead to the progression or deterioration of the business. The executives of an organization also act as representatives, therefore it is crucial for the organization to offer them a pay package that is commensurate with their title and duties.

The subject of executive pay in the United State, however, continues to be a controversial issue. The compensation offered to executives continues to grow at a very fast rate while the pay offered to the average employee remains grows dismally every year. In 2016, the executives of multinational blue-chip companies earned an average of $15 million which was more than 250 times the pay of the average employee (Balnaves-James, 2015). This phenomenon has led to pay inequality. This paper examines the controversies surrounding executive compensation. It establishes the rationale behind the high salaries and whether it is justified. It also recommends measures that the company can implement to reduce income disparity within the organization.