Part of the reason for this, is because shareholders and the board of directors are allowing this to occur. To prevent the situation from becoming worse, shareholders and the board need to be more independent, by questioning the motives / actions of management. At the same time, there must be some kind regulations in place that can prevent the runaway abuses from occurring. If this kind of strategy can be implemented, it will reduce the abuses that are taking place, by letting management know that this behavior is no longer acceptable. At which point, the underlying amounts of compensation, will be tied directly to the performance of the individual vs. their position in the company.

Bibliography

Case Studies: Citigroup. AFL CIO, 2010. Web. 24 Oct. 2010.

Citi 2009 Annual Report. Citigroup. 2010. Web. 24 Oct. 2010.

Trends in CEO Pay. AFL CIO, 2010. Web. 24 Oct. 2010. ...
[ View Full Essay]