Why do CEOs earn such high salaries?

by Tomotaka Isono

CEO or star players in the sporting world earn higher salaries. For example, according to my professor’s presentation, LeBron James who plays in Miami Heat made  about $53,000,000 in one year! And Apple CEO Tim Cook made $375,000,000 in 2011. In other hands, office workers in Japan made about 412 million yen ($51,500) in 1 year. Why are there the differences between CEO and office workers? Is it fair or unfair? Why on earth do they make such higher salaries? I’m writing about this question now.

When we work, we get salary. Then, how is the salary decided? I think there are 4 factors.

First, the business contents are. For example, I work a part-time job, I earn $9.20 per hour. Making papers by using PC in 1 hour deserve earning 9.2 $. But in the business contents, I and CEO are not different very much? CEO also sometimes make papers by PC. So what are the differences between CEO and I? CEO, Tim Cook made about $43,150 per hour.

Second, I think one’s nature is including salary calculation. Steve Jobs has creative power that leave somebody speechless and attractive presentation skill.  Ichiro has good batting eyes and fast running ability. These abilities are not able to be imitated by any other people. Therefore they earn high salaries.

Third, these natures and abilities are based on their efforts. Jobs prepared presentation before 1 or 2 months, and Ichiro come to stadium the earliest in the team and started training.

Finally, effort is very important, but most important factor is good result. Ichiro recorded 200 hits in 10 seasons in a row. And player who produced good results got much salary.

These 4 factors; business content, nature, effort and result decide salaries. So CEO got higher salary than I. CEO’s job is not easy, but very difficult. CEO is the occupation that is to do the job nobody would like to do. It is to determine a course in the difficult situation. His determination make his employee lose their job, and effect bad result to the world.  CEO have to do job in the severe pressure. So CEO get higher salary than employee. I think instead of such high salary, CEO has huge responsibility for his employee, his country and the world.

 

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