Question

Identify the reasons why some have concerns about high executive compensation.

A) Widening income inequality
B) Limited impact on company performance
C) Potential for unethical behavior
D) Encouraging long-term business sustainability

Answer 1

Some concerns about high executive compensation include widening income inequality, limited impact on company performance, potential for unethical behavior, and discouragement of long-term business sustainability.

Step-by-step explanation:

There are several reasons why some people have concerns about high executive compensation:

1. Widening income inequality: High executive compensation can contribute to the gap between the rich and the poor. When executives earn excessive amounts of money, it can exacerbate income inequality in society.
2. Limited impact on company performance: Some argue that high executive compensation does not necessarily result in improved company performance. There is a lack of evidence to support the idea that higher pay leads to better business outcomes.
3. Potential for unethical behavior: Excessive executive compensation can create an incentive for unethical practices, such as manipulating financial results or prioritizing short-term gains over long-term sustainability.
4. Encouraging long-term business sustainability: Critics argue that high executive compensation can discourage a focus on long-term business sustainability. Executives may be more inclined to prioritize immediate financial gains instead of investing in the future of the company.