The Structure Of Financial And Business Organizations

The structure of financial and business organizations have evolved over time, and the subject of remuneration of CEO’s has become a debate across society particularly during the global financial crisis. With the current economic situation, the debate over CEO pay has further intensified with more people questioning whether CEO salaries commensurate with their overall contribution to the value and overall success of the organization. A chief executive officer is a person within an organization’s senior management group who is employed at a corporate level (Perkins). It cannot be denied that CEOs have a great amount of influence over their company and are responsible for defining and executing a company’s strategy. Through their actions CEOs†¦show more content†¦Looking at the pay within hospitals highlights many of the issues surrounding the pay of CEOs. The question of whether CEOs are paid too much for their contribution to a company is difficult to ans wer. In some cases, CEOs are overpaid for their contribution; however, we also see the opposite, where CEOs are underpaid. For example, the CEO of a public organization, such as a hospital, is essentially running a company where people’s lives are at stake. The CEO of a hospital is the operator of an organization that must always be running effectively and efficiently. However, the great amount of responsibility held by the executive director of a public hospital is not reflected in their remuneration. Furthermore, studies reveal that there is no correlation between the pay of hospital CEOs and the quality of the hospital. A study undertaken by the Harvard school of public health in 2013 suggests that the pay of CEO’s of hospitals does not truly reflect how good they are (gunderman, 2013). The study was published in the Journal of the American Medical Association: Internal medicine, and revealed that there is no link between CEO pay and multiple quality indicators such as motility rates and readmissions rates (gunderman, 2013). Thus, the study shines light on the idea that CEO pay does not necessarily reflect the quality of the CEO, nor the company they work for.