Wednesday, October 3, 2007
My reaction to Tip #6 - Ronnie Vajdak
Out of all of the suggestions, I believe that tip number 6 - the reccomendation to reduce the perk packages of CEO's is the best way to restore investors' confidence in compensation. Many investors question the large amount of "freebies" that CEO's get with their employment. When these upper level employees are already recieving such high pay and many valuable stock options and retirement benefits, it is difficult to justify also paying for their golf fees and vacation flights. Companies could restore investors' confidence in spending if they eliminated many of the perks that average employees would never have access to. It is difficult for investors to feel confident providing perks to employees who could easily pay for the privaleges themselves, while providing very little to their other employees. Also, the general public is often resentful of the perks that the very rich recieve, which could contribute to investor problems. When the public has more respect for the company's policies, it would be easier for investors to have confidence and support.
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