There is now intense debate about how the pay levels of top executives compare with the compensation given to rank-and-file employees. But, while such comparisons can tell us much about the dynamics of inequality, the distribution of pay among top executives also deserves close attention, because it may very well point to serious corporate governance problems.
CAMBRIDGE – There is now intense debate about how the pay levels of top executives compare with the compensation given to rank-and-file employees. But, while such comparisons are important, the distribution of pay among top executives also deserves close attention.
In our recent research, we studied the distribution of pay among top executives in publicly traded companies in the United States. Such firms must disclose publicly the compensation packages of their five highest-paid executives. Our analysis focused on the CEO “pay slice” – that is, the CEO’s share of the aggregate compensation such firms award to their top five executives.
We found that the pay slice of CEOs has been increasing over time. Not only has compensation of the top five executives been increasing, but CEOs have been capturing an increasing proportion of it. The average CEO’s pay slice is about 35%, so that the CEO typically earns more than twice the average pay received by the other top four executives. Moreover, we found that the CEO’s pay slice is related to many aspects of firms’ performance and behavior.
To continue reading, register now.
Subscribe now for unlimited access to everything PS has to offer.
Calls at this year’s Shangri-La Dialogue in Singapore to improve military-to-military communication between the US and China, especially in light of increasingly aggressive encounters at sea and in the air, fell on deaf ears. Despite the best efforts of the US and its allies, China is in no hurry to re-engage.
considers the implications of the complete collapse of defense diplomacy between the US and China.
To think that technology will save us from climate change is to invite riskier behavior, or moral hazard. Whether a climate solution creates new problems has little to do with the solution, and everything to do with us.
offers lessons for navigating a field that is fraught with hype, unintended consequences, and other pitfalls.
CAMBRIDGE – There is now intense debate about how the pay levels of top executives compare with the compensation given to rank-and-file employees. But, while such comparisons are important, the distribution of pay among top executives also deserves close attention.
In our recent research, we studied the distribution of pay among top executives in publicly traded companies in the United States. Such firms must disclose publicly the compensation packages of their five highest-paid executives. Our analysis focused on the CEO “pay slice” – that is, the CEO’s share of the aggregate compensation such firms award to their top five executives.
We found that the pay slice of CEOs has been increasing over time. Not only has compensation of the top five executives been increasing, but CEOs have been capturing an increasing proportion of it. The average CEO’s pay slice is about 35%, so that the CEO typically earns more than twice the average pay received by the other top four executives. Moreover, we found that the CEO’s pay slice is related to many aspects of firms’ performance and behavior.
To continue reading, register now.
Subscribe now for unlimited access to everything PS has to offer.
Subscribe
As a registered user, you can enjoy more PS content every month – for free.
Register
Already have an account? Log in