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Following a year when CEO pay raises were flat, 2010 offered huge gains for many bosses of top companies. Average CEO pay jumped 11%. Topping the list was Viacom’s Philippe Dauman with compensation estimated at $84.3 million. While the biggest across-the-board raises tended to be in oil and gas and telecommunications, all industries showed substantial increases in CEO compensation. At the same time, some oil executives saw their compensation drop substantially.

QUESTIONS:

  1. Is money (pay, compensation) a motivator? Argue from both sides and support your arguments with relevant models/theories.
  2. Philippe Dauman rose to the top of the list on the strength of equity rewards. Using Equity Theory, defend these huge increases in compensation.
  3. Imagine that you were poised to become CEO of a major company (as Michael White did at DirectTV in 2010). How would the information presented in the article influence your motivation? Use Expectancy Theory to explain.

SOURCE: J. S. Lublin, “CEO Pay in 2010 Jumped 11%,” Wall Street Journal (Retrievable online at http://online.wsj.com/article/SB10001424052748703992704576307332105245012.html)

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