(Roughly) Daily

“Rank does not confer privilege or give power. It imposes responsibility”*…

 

Just about everyone on the planet agrees that CEOs earn too much. Except CEOs. But how much is too much? Let’s put it this way: the average American worker would earn almost $2 million a year if he were paid a fair salary based on the compensation of U.S. CEOs.

That’s just one of the many details to emerge from a fascinating post over at the Harvard Business Review, visualizing the pay-gap ratio between chief executives and average workers internationally…

CEOs are making a lot more than what people deem fair. In the United States, the average American CEO makes a whopping 354 times the salary of the average worker. But ask Americans what a fair salary for a CEO is, and the consensus is just 6.7 times the salary of an average worker.

That means that if the average American were paid the “ideal” fraction of the average CEO’s actual salary, he would rake in $1.8 million a year.

In 1984, legendary management guru Peter Drucker argued that paying any CEO more than 20 times the wages of the average American worker was anathema to the well-being of corporations. Pay your CEO more than that, Drucker argued, and all you did was increase employee resentment, decrease morale, and reward greed over responsibility. If Drucker could see the size of the paychecks of today’s CEOs, he’d be spinning in his grave…

Read more at “The Insanity Of CEO Paychecks, Visualized“; read the HBR piece (and see more charts) here; and then read this short piece at the Financial Times that unpacks the mechanics of greed– and its stifling effect on innovation and growth– here.

* Peter Drucker

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As we fume over fatted cats, we might take a moment to celebrate Ask a Stupid Question Day, celebrated by teachers and students on this date (or sometimes, the last school day of September).

 source

 

Written by LW

September 28, 2014 at 1:01 am

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