C.E.O.s of Google, Hertz, Peloton and Live Nation Were Highest Paid Last Year

So how do we determine the level of remuneration that is increasing from year to year?

I have no objection to my CEO earning more than I do. Especially if, as a shareholder, I would benefit if the CEO’s decisions contributed to the increase in the value of the company’s stock. And as a working person, I am happy that the CEO is helping me and my fellow employees to be richer.

What’s stopping me is the huge salary gap.

To put the magnitude of this disparity into perspective, consider the following: Peter F. Drucker The economist and management guru, who died in 2005, said most employees understand the CEO’s pay increases. But he also pointed to research showing that CEOs felt “almost right” when they received praise. 10-12 times what the worker earns.

It’s hard to make an exact comparison with CEO-to-employee pay ratios at other times. This is because current calculation methods were not standardized. 2018. But there is no doubt that the wage gap was much smaller in the United States in the 1960s and study It turns out that even in the 1970s, the salary ratio of large companies was less than 20 times. By 1989 it was in its 40s, and Mr. Drucker decided the level was excessive.

In the 1990s, the Clinton administration embarked on a large-scale policy to curb executive pay. tax reform, and unintentionally result. By limiting the deductibility of executive compensation to the following: $ 1,000,000the policy has contributed to an increase in oversized salary packages, while leaving large loopholes in stock options and bonuses linked to corporate performance.

Mr. Drucker columnist He told The Wall Street Journal that CEOs should self-impose “voluntary” limits on their salaries to: 20 Double what the average person earns, and preferably less. Failure to do so will create corrosive levels of income inequality that will harm not only businesses but society as a whole, he said. (Disclosure: Here at The Times, the current salary ratio is 45stated in the company’s proxy statement).

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