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Dan - your arguments make sense. But they do not provide guidance on addressing the pay inequality (and it shouldn't just be the CEO - the entire executive suite ought to be considered when comparing to the lowest paid employee). Might I suggest the idea of addressing the performance factors which are used as metrics for determining executive pay. Should only the board decide the goals for lucrative pay packages? Perhaps the whole company should have a say as to what needs to happen before the C-suite earns their $1m+ equity package?

Thanks for the comment Roger

There are good reasons to do an internal comparison of executive pay to broadbased staff. Sadly the "pay ratio" rules for publicly traded companies are too broad and simplistic to be of any use.

Company size, operational strategy, employee location etc are low hanging fruit in regard to things missing. Performance factors are a more complex issue that is also missing.

In smaller companies, there are examples of employees having a say on executive pay. As companies get larger and more complex this becomes impossible. There simply isn't any way to educate people well enough for them to have a truly informed opinion. The result would be pay packages that may end up making the companies uncompetitive and then everyone ends up losing.

The best answer is for boards and executives to not be jerks. They need to have enough empathy to create programs that are just. They also need to be honest about the level of pay needed to be the company they want to be.

There is no formula or "pat answer" that will work. It is hard. It requires effort and adjustment.

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