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I have thought once I establish a company, I might tie CEO salary to be limited to being a multiple of the least paid employee. Then what the good ratio is bec
by mey 11y ago
I have thought once I establish a company, I might tie CEO salary to be limited to being a multiple of the least paid employee. Then what the good ratio is becomes an interesting question to me. Is 10x enough? Is 100x too much? Is a CEO's productivity worth 100x the lowest paid employee?
If we go with the lowest paid employee is making 30k a year, and the CEO is making 3mil? Is that too much, not enough, just right?
There isn't a right answer and it entirely depends on the purpose of the company and the model, but I do think it's an interesting way to keep a reality check on inequality voluntarily inside a company.
- atmosx 11y ago> Is a CEO's productivity worth 100x the lowest paid employee? No. Not if you want to live in a peaceful society, but we're talking religions again... You are correct, there is no right answer. Views vary based on how much 'socialist' or 'liberal' someone is.
- deleted 11y ago[deleted]
- slg 11y agoWhatever ratio you decide, it introduces a variety of problems. For example, it gives the CEO incentive to cut the lowest paying jobs so they are no longer factored into the ratio. Suddenly your customer service call center is outsourced to a contractor because it allows the CEO to give themselves a raise regardless of whether it is good for the customers or the company's long term business interests. It also isn't factoring the problems that would arise if your max ratio prevents you from being competitive in the CEO hiring market.