I don’t mind CEOs earning more than me, especially when, as a shareholder, I benefit when their decisions contribute to the increase in the company’s stock price. And as a working person, I’m happy when CEOs help make me and my fellow employees richer.
It’s the huge pay gap that gives me pause.
To put the size of this disparity in perspective, consider this Peter F. Drucker, the economist and management guru, who died in 2005, said most workers understood that CEOs should be overpaid. But he also cited research that showed that it felt “right” when CEOs received it 10 to 12 times What the workers earned.
Precise comparisons with CEO-employee pay ratios from other eras are difficult because the current method for calculating them is not standardized. 2018. But there is no doubt that pay inequality in the United States was much lower in the 1960s and 1970s. one Study found that in the 1970s the pay ratio of large companies was less than 20. By 1989, it had reached the 40s, a level Mr. Drucker found excessive.
In the 1990s, the Clinton administration said it would rein in executive pay, beginning a major tax “reform,” with unintended consequence. Limits the deductibility of executive compensation $1 million while leaving a loophole stock options and bonuses tied to corporate performance the policy has contributed to the rise of outsized pay packages.
Mr. Drucker, A Columnist for the Wall Street Journal, CEOs should impose a “voluntary” cap on their pay, no more than 20 Much more than what the rank-and-file achieved and, specifically, less than that. Doing otherwise would create corrosive levels of income inequality, he said, harming not only companies but society as a whole. (Disclosure: Here at The Times, the pay ratio is now 45(says the company’s proxy statement.)
