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CEO – Worker Pay Gap

Let me be clear from the start.  I believe that ability deserves to be rewarded!  I believe in merit pay, I believe that this country became what it is today on the basis of merit, ability, and hard work.  I believe that all of us are, to one extent or another, motivated by the risk vs. reward aspect of our jobs.  We all want to do well, get ahead, get promoted, make it to the C-suites, and make “big money”.  All of us want the material and symbolic benefits that come with getting to the top and drawing down a super-sized salary.

However, a recent report by Bloomberg on CEO compensation has me outraged!  Ok, I get it, big time CEOs have proven their ability. They have a track record.  They have connections.  They know how to make the system work.  They have skills, credentials, credibility.  Hence, they can demand and receive top dollar.  But the kind of numbers being reported are both staggering and, frankly, embarrassing.

Again, let me be clear.  I don’t have any answers for this rather glaring financial and social inequity.  But, I think we have to begin to better address it.  Last year, Ron Johnson and Rebecca Groves got fired from their jobs at J.C. Penny.  Ron, as CEO, made $54 million dollars a year, Ms. Groves, a sales worker, was earning $8.30 an hour.  That may be how the system works, but I think we really need to tinker with the system a little bit!  I know that Michael Jeffries of Abercrombie & Fitch works hard to earn his $48 million salary, but does he work 1,640 times harder than his average worker, who earns $29,310?  Or, what about Howard “Schultz at Starbucks, does he really deserve to earn $29 million a year, which is 1,135 times greater than the $25,500 that his average barista makes?

My business colleagues keep telling me that I’m being naïve.  Big cash always goes along with being the Big Kahuna.  But, as far as I’m concerned, when the average pay ratio distribution for S&P 500 companies comes out to be that the CEO makes 204 times what their employees make, something is seriously wrong.

  • By Marlene LaPorte on 7.8.2013 at 11:06 pm

    I am in complete agreement. It is outrageous that these wage disparities have continued beyond the economic meltdown of 2008 while unemployment has hovered at high levels. And, we don’t really know what the true unemployment rates are since so many people have been forced off the unemployment rolls as they maxed out of benefits…yet they are still unemployed!

    What can we do to get corporate boards to recognize how out-of whack these C-level salaries are? This is yet another embarrassment of ‘corporate America’ that the rest of the world shakes its head in disbelief!

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