Executive pay has become highly controversial, especially recently. Abigail Disney, an heir to the Disney fortune, publicly criticized

CEO Bob Iger’s compensation package last year, which amounted to $66 million—more than

1,000 times the average pay of Disney employees.

It was also revealed that Microsoft CEO Satya Nadella received a 66% increase, bringing his total

compensation to nearly $43 million.

Although we discussed the CEO’s responsibilities in a previous article, here we’ll explore them in a little more detail and weigh them

against their salary to determine whether they truly deserve it.

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Read also:6 Important Tips to Consider Before Setting Employee Salaries

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Challenges Faced by CEOs

Every dedicated CEO faces many challenges, both internal and external. These challenges include

The internal challenge is that they must continually hone their skills to better navigate changes in the market.

External challenges include the need to stay informed about the market and its changes, as well as the need for

strong public relations skills to build the company’s reputation and help it seize opportunities.

In a globalized context, the challenges facing executives are growing. They are now expected to understand not only their home

markets, but global markets as well, as companies are no longer limited to a single country and have instead become

international, transcending borders and geographic barriers.

Despite everything that has changed, senior executives still have to do the job they have always done, which includes motivating

employees, setting an example for the organization, helping define and scale the company culture, and understanding internal accounting,

as well as presenting budgets and business plans to the board.

If we put executive salaries in the context of these challenges, I think we would conclude that executives deserve

their already high salaries.

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Read also:10 Steps to Set Your Employees’ Salaries

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Factors That Determine CEO Salaries

To understand executive compensation properly, we need to understand how it is determined;

There are many factors at play here. A CEO’s salary is determined in part by comparing it with the salaries

paid by other companies.

On the other hand, an experienced CEO with a proven track record can deliver real value to a company. As a result,

their experience and the value they can bring to the company are key factors in determining their salary. What’s more, an in-house CEO—that is, someone

appointed from within the company—doesn’t earn as much as some people might think.

If a company recognizes this and insists on bringing in an experienced CEO from outside, it understands how much it stands to gain

from its revenues and profits.

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Read also:Pay and Performance Systems: How to Expand Your Salary Range

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CEO Responsibilities

We should recognize that many responsibilities are handled only by the CEO. For example, the CEO is responsible for shaping the company’s external meaning

for the company. It’s true that Peter Drucker, the renowned management expert, once wrote that “the purpose of a business is to create a customer.” But the CEO

doesn’t create the customer; rather, the CEO creates meaning for the customer and sets the company’s overall strategy, enabling it

to serve that customer as effectively as possible. The CEO defines the company’s “external meaning,” allowing it to look outward and open

آفاق أوسع.

One of the responsibilities handled only by the CEO is identifying competitive arenas where the company can win. Peter said

Drucker: “The one task that only the CEO can perform is to decide: What is our business? What should it be? What is not

our business? And what should not be?”

Drucker’s words may be brief, but they say that it falls to CEOs to take all the critical steps

in the company’s history.

Resolving the tension between short-term and long-term priorities is sometimes a challenge as old as business itself,

and it is a challenge the CEO must resolve by deciding how to balance returns from current activities with investment

In a largely unknown and uncertain future.

These are some of the factors that explain the high salaries of executives, who have been shown to deserve them if they do their jobs exceptionally well,

after all.