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Synopsis: When the CEO receives a salary raise, it sends a signal to the rest of the business community about recent success. The reason I choose this article is because of our recent class time with the court case A.P. Smith V. Barlow (1953) where Ruth Barlow was upset with her investment money given to a charity. In a way this is a similar situation in that the Board of Directors who are supposed to have the stockholders best interests in mind made the decision to increase Judge's CEO. I happen to own some shares of Paychex; not nearly the amount as some Paychex executives. However, in my opinion, I would rather see that money reinvested into the company. Although it is only $50,000 for a company whose 2005 revenues were $1.4 billion. Paychex is also a company whose stock price has not been very stable over the past year. Some might argue that the fluctuation in stock price reflects transactions and news releases. In today's business world, CEO's expect to be compensated for success and results. My question is that the increase in salary reflects success and results or is it a reputation claim? In THE NEW YORKER, economist Lucian Bebchuk and Yaniv Grinstein write "executive compensation matters to investors because executives now take so much money out of corporations every year." This is my point in that Paychex CEO Jonathan Judge is taking more money away or out of the company; depending on how one looks at it.

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