This is a form of price anchoring.[0] By representing salaries as a fraction of CEO income, it makes all employees evaluate their worth relative to the CEO. On

This is a form of price anchoring.[0] By representing salaries as a fraction of CEO income, it makes all employees evaluate their worth relative to the CEO. On the other hand, representing the CEO's income as a multiplier of the company's average income is standardized and represents a company-oriented view.[1][2] [0]: https://en.wikipedia.org/wiki/Anchoring https://en.wikipedia.org/wiki/Anchoring [1]: https://en.wikipedia.org/wiki/Executive_pay#United_States https://en.wikipedia.org/wiki/Executive_pay#United_States [2]: http://www.shrm.org/hrdisciplines/compensation/articles/pages/payratios.aspx http://www.shrm.org/hrdisciplines/compensation/articles/page...