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07/21/2017

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Yeah, it's true. CEOs are really squeezing the employees to obtain the maximum productivity and profit for the company. However, employees' payment is not up to the extent of their efforts. CEOs cannot enjoy their status without the contribution from their employees. And in my opinion, employees should be paid a share of the company. I'm working for an academic writing company, https://www.essayschief.com and get payment on the basis of works completed.

I suspect the CEO pay ratio disclosure rule will not change top executive pay practices. Most companies enjoy favorable Say-on-Pay results. Some industries might outsource their staff to a third party to achieve a better pay ratio. You can avoid including low-skilled, lower paid workers from your pay ratio if they are really employed by another company. I think that is what I fear most from this rule.

Yeah, It's true.
Great Post! Thanks for sharing with us. very informative post.
100% right. Well said.

CEO pay is a very tricky topic. Some research has shown that the largest contributor to CEP Pay increases is the growing size of companies as a whole. The bigger the company is, the more someone earns to run it. But, big companies don't need to pay non-executive positions any more just because of their size.

It is unlikely that Pay Ratio will have an impact on voting. That is, unless, a scandal or two occurs where pay ratio problems also correlate.

Are CEOs concerned about the public knowledge of their pay ratio? Their pay currently is out there but having it scrutinized by the employees in this way, do you think it will be a motivating factor if the employees view the ratio unfavorably? If so, what do you think most CEOs would do? Offer to lower their pay or work to increase the employee compensation?

Great question Karen,

I think that small minority of CEOs are concerned about the perception of their employees. Most are concerned about their own perception of pay relative to the people they measure themselves against.

If a company has a materially different CEO pay ratio to its close peers, it is possible they may make changes, but I do not expect that will happen often (if at all).

So it will be up to the employees or public to shame the CEOs who have a wildly excessive ratio into making a positive change - one way or the other. I would love to see more "do the right thing" on their own.

Of course these days we are so preoccupied and overloaded with info, employees may not even notice or see what the ratio is.

I forget the specifics of the pay included in the employee average rate, but that rate could also be skewed due to some high level earners, so it will be he lowest paid employees who will need to stand up and be heard if they feel the CEO pay is excessive.

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So how about TMRs for CEOs and the rest of the C-suite, administered by Boards of Directors and reportable in financials? Instead of dollar amounts, tie ratios (made up of salary, perks, etc.) to min, midpoint, and max. Allow geographic and industry differentials (or whatever is deemed to make sense by whomever does the deeming). Just like we do for employees, but this time, for the C-suite.

And not following the TMRs would have tax consequences for the company and for the C-suite position holder. Maybe overages could be clawed back and distributed to the employees pro rata.

Yes, administering this would be a bureaucratic nightmare, but that describes a lot of programs that attempt to ensure fair and respectful behavior.

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