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This article on CEO compensation packages is relevant: https://www.theatlantic.com/business/archive/2017/06/how-companies-decide-ceo-pay/530127/ https://www.the
by heurist 9y ago
This article on CEO compensation packages is relevant: https://www.theatlantic.com/business/archive/2017/06/how-companies-decide-ceo-pay/530127/ https://www.theatlantic.com/business/archive/2017/06/how-com...
> Through the 1970s—when the ratio of CEOs’ pay to that of the average worker was much lower, at somewhere between 20:1 and 30:1—the lodestar was “internal equity,” or how an executive’s pay compared with that of other employees in the company. A nascent industry, executive-compensation consulting, changed this. Consultants recommended switching to “external equity,” meaning compensation would be based on what other CEOs were paid. This was merely a useful sales tool—even though the consultants didn’t have solid evidence or theoretical justification for this method, they could attract business by vowing to set ambitious goals for their clients. Still, corporations adopted the standard of external equity, and CEOs got a lot richer.