(10) You are Chairman of the Board of a fairly successful company. Many of the s

Question

(10) You are Chairman of the Board of a fairly successful company. Many of the shareholders have been complaining about excessive compensation for the CEO of your firm, especially since employee wages are very low. They cite a statement by Warren Buffett that "the ability of corporations to rein in skyrocketing CEO pay is the 'acid test' of corporate governance reform." You find that the CEO earns $22 million a year and the lowest paid worker in the company earns $22,000.  This ratio of 1000:1 seems a bit high to you. A recent study published by the Economic Policy Institute indicated that CEOs at large firms in the United States make about 300 times more than the typical worker. Other members of the Board feel that since the stock has been going up, the salary for the CEO should be raised.  What should you do?

(11) You are Chairman of the Board of a successful technology firm. There is a nominal federal corporate tax rate of 35 percent, yet the effective tax rate of the typical corporation is about 12.6%.  Your firm has been clever with use of transfer pricing and keeping money abroad and has barely paid any taxes over the last 5 years; during this same time period, profits were $28 billion. One member of the board feels that it is un-American to use various accounting devices in order to avoid paying taxes. Others feel that these are legal loopholes and corporations have a fiduciary responsibility to minimize taxes. One board member quoted what the CEO of  Exxon once said: "I'm not a U.S. company and I don't make decisions based on what's good for the U.S."  What should you do?

(12) You are CEO of a small company that manufactures sophisticated drones. Your company's drones are used for non-military purposes such as fighting wildfires, monitoring borders, aerial photography, and law enforcement (finding criminals).  You have just received a huge order worth millions of dollars from a firm located in a country ruled by a vicious dictator. This dictator has been known to suppress human rights and has been waging a war against a group fighting for democracy.  In the past, he has even used chlorine gas against his own people. The company assures you that the drones will not be used for military purposes. You suspect that the company is a front for the government and may modify the drones as weapons so that they can be used to target freedom fighters and terrorize civilians throughout the country. What should you do?

Can you answer #'s 10-12?

Explanation / Answer

(10)

Since the situations from both sides have supporting arguements i.e, the rise in pay and against to this,I will prefer along with the rationale of situation

As a chairmen first i will collect the other board members opinion after that i will decide as per the voting of the comapany board members

After voting if the company members are in favour to cut the pay for CEO, then i will decide how much should it be cut in a salary of CEO, by consulting other experts and professionals in company.

Also i will give breif explanation to CEO about the issue and voting before commence of voting and i will tell him about the decision taken by company board members is final,and i will communicate with him/her about the decision after voting

so that it doesn't sense surprise to the CEO. it makes some sense of fairness

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