What Is Equality In Pay

Decent Essays

Equality in Pay
Equality in pay between CEOs and employees is a big deal, bringing more and more controversy due to a lack of action. This has been an issue for decades now and is a hard topic to bring towards a solution. Closing the pay gap is extensive in the business world today, and could bring equality and peace inside companies throughout the world. Making recovery and poverty become one of America's least worries could all start by equalling pay between CEOs and employees.
CEO pay is a good thing but only towards the actual CEO, making employees and other a lower level workers struggle due to their inconsistent income. According to Susan Holmberg & Mark Schmitt, “CEO pay has been controversial in the United States for more than a century, …show more content…

The problem is not that the political system does not want to deal with excessive CEO pay. There have not been any number of formal efforts to rein in executive pay, involving a host of direct regulation and tax changes. Most of the specific efforts to reduce executive pay through major policies such as a limit on the tax deductibility of high salaries, as well as more modest accounting and disclosure legislation, have fallen short.While the huge multi-million pay packages of a few hundred CEOs get all of the media attention, what usually receives much less attention is the small number of CEOs represented in the annual salary surveys. For help, the Dodd Frank Act was passed in 2010 to drop CEOs’ lavish pay during recession. During the time of the Dodd Frank Act, companies were required to calculate and disclose the ratio between CEO pay packages and the median workers. Glassdoor called the Dodd Frank Act and their CEO pay-ratio rule study on income a “sneak preview,” by going into companies and CEO pay disclosure rules approved by the securities and exchange commission each month. Instead of obsessing about how much CEOs earn, it would make sense to focus on how their pay is determined. CEO pay is almost always tied to how well a company's shares are doing. The question is whether they …show more content…

Headlines have seized on dramatic accounts of outrageous amounts earned by executives (Kay). The CEO-to-worker compensation ratio was 20-to-1 in 1965 and 29.9-to-1 in 1978, grew to 122.6-to-1 in 1995, peaked at 383.4-to-1 in 2000, and was 295-to-1 in 2013, far higher than it was in the 1960s, 1970s, 1980s, or 1990s. Chipotle boss Steve Ells earns 28.9 million, 1,522 times the median salary of 19,000. CVS Health boss Larry Merlo’s 32.4 million pay is nearly 1,192 times than that of a median worker’s 27,139; many more CEOs are in this same case, where they are making a disturbing amount over their workers. This image of executives shows just how much they are paid, and when it is put beside their median workers, it becomes a problem. This tragedy can befall both shareholders and employees when CEOs line their own pockets at the organization's expense (Kay). On the bright side, Google’s CEO Larry Page, has only been paid a dollar a year along with Zuckerberg since both company went public. Larry Page got exactly 1 dollar in 2014; his median worker got 153,150 (Reuters), which is a common move for tech CEOs who have already made their money and or take home a hefty amount of stock. Another case would be CEO Dan Price and his decision to dramatically increase wages at his company Gravity Payments, making himself go from being a millionaire, to making a salary

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