Although employment contract forms are still hard to come by for many Americans, CEOs are doing quite well. According to a study reported on USA Today, the average CEO is making an average salary of $9.6 million last year. Unemployment rates for teens across the country is 24.9%, averaging over 20% for more than 40 months now, and many are wondering how it is that so many are unable to find jobs while others are pulling an average of almost seven-figures a year.
The way that most CEOs are able to achieve these figures is not in cash compensation, but rather stock options. Whereas cash bonuses were the course de rigueur prior to the fall of 2008, the extreme disparity between what the people at the highest levels of the business world, compared to those lower down the corporate food chain. Although the common response may have been to seek an employment contract with another company, the problem was so widespread that this became nearly impossible, leading to many making accusations within the industry that there had been gross mismanagement of funds on nearly level.
Many attributed this mismanagement of funds as the cause of the economic collapse, but the reality is that it was a far more complicated matter that is still in the process of being fully understood and worked out. Employment contract forms are in short supply today because people are afraid of their money suddenly evaporating, or being misused, and have become far more reluctant to taking risks than before. Of course, this is only a shallow explanation, as there is far more at work, but the fact that CEOs have essentially just found a loophole that allowed them to engage in the same behavior with a new twist is leaving many reluctant and on end.
What brought real attention to the issue in 2008 was that so many companies that were once considered to be staples of their industries were suddenly closing shop, at which point people began taking a closer look at the practices being employed at the top levels. Things have changed, though. No longer are the employment contract forms of these CEOs ensuring ever-higher pay. Today, many stockholders are reserving the right to cut the pay of executives who artificially inflate the financial numbers of their companies, which reduces the incentive for these CEOs to lie. However, out of more than 3,000 companies that had this option, only 43 voted to invoke this right.
Many are in disbelief that employment contract forms could be in such short supply while CEOs across the nation are making millions of dollars, despite all the efforts to reign in white-collar mishandlings that were revealed in the fall of 2008. The good news, though, is that many are noticing the discrepancies before they evolve into a bigger problem. Still, there needs to be a fundamental shift in the psyche of corporate culture before any real, meaningful change takes place.
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