Running head: Comparison of CEO to Workers Compensation
Reflection on the Global Mindset
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Date: 4th April, 2021
CEOs’ compensation has been a topic that has been discussed for the longest. The question of disparity among their compensation in comparison to the rest of the workers has always been raised. I believe CEO compensation is excessive in comparison to non-executive employees. The rationale behind my assertion is because the ratio of CEO to the worker has been on the rise for decades. According to McGregor (2020), the CEO-to-worker ratio in 2019 was 320 to 1. This was a rise from 293 to 1 in 2018. In previous years such as 1989, the ratio was 60 to 1. From the above observations, it can be seen that the ratio has been on the rise in favor of the CEOs. The fact that it is in favor of the CEO just shows how excessive it has been against the non-executive employees. Besides the ratio, the next rationale behind my assertion of excessive pay is because of the growth of CEO pay. Locke (2020) indicates that the percentage of CEO pay rise from the year 1978 to 2019 was 1,167%. For the average worker, the rise was 13.7% during the same duration. A look at the two percentages can tell that the growth of the CEO pay over a thousand times for the non-executive employee. In summary, the CEO compensation seems to be improving as time progresses. The non-executive worker on the other hand is stagnating around the same level. It is t