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In 1987,the CEOs of 24 American companies earned in excess of $5 million,including bonuses and stock option profits.At least 300 CEOs earned $1 million or more.Yet only 30 chief executives of European companies,and even less in Asian companies,had seven-figure earnings that year (Tully,1988).Perhaps American CEO salaries are a culture- specific phenomenon driven by the nation's history,social norms,and government policies.While American CEOs are enjoying large financial gains,the companies they lead may be struggling or even losing ground.Sethi and Namiki (1986) contend that the prevailing compensation sys- tem in U.S.industry,particularly in large corporations,has produced executives who are failing either to better economic values for stock- holders or to make American industry internationally competitive.the world market place.Regrettably,executive compensation has traditionally been based on relative status rather than contribution or merit (Kanter,1987).
In 1987,the CEOs of 24 American companies earned in excess of $5 million,including bonuses and stock option profits.At least 300 CEOs earned $1 million or more.Yet only 30 chief executives of European companies,and even less in Asian companies,had seven-figure earnings that year (Tully,1988).Perhaps American CEO salaries are a culture- specific phenomenon driven by the nation's history,social norms,and government policies.While American CEOs are enjoying large financial gains,the companies they lead may be struggling or even losing ground.Sethi and Namiki (1986) contend that the prevailing compensation sys- tem in U.S.industry,particularly in large corporations,has produced executives who are failing either to better economic values for stock- holders or to make American industry internationally competitive.the world market place.Regrettably,executive compensation has traditionally been based on relative status rather than contribution or merit (Kanter,1987).
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