http://money.cnn.com/2014/04/09/news/economy/executive-pay-europe/index.html?iid=SF_E_River
The European Commission released proposals that would require Europe's 10,000 publicly listed companies to hold binding votes, and to say how employee and executive pay compares. Policies at each company will be subject to shareholder approval and must include "a maximum level for executive pay".
Shareholders having a vote on employee and manager salaries in a company will, theoretically, raise morale and productivity and decrease the inequality gap between CEOs and lower-paid employees. I think fair pay, for both employees and managers, is important for the structure of a business however I am reluctant to believe that shareholders know what these numbers should be. Shareholders only real involvement in the company is what they have invested in for their share due to their faith in the company. Being a shareholder is voluntary and is not permanent and so I wonder what the cap is on what sort of shareholders will be making such a vote on such an important aspect of the business structure of a company.
While I appreciate your concerns, I do think that doing this will reduce the income gap. Particularly because it may be argued that CEOs rarely have skills that make them superior to other employees, though they definitely have a different skill set. While this may be termed "socialist" I think it's an important step.
ReplyDeleteI think that in some situations salary gaps boost productivity. It gives low wage workers something to look forward to if they work hard enough. Salary gaps help when job promotions are in the near future for employees. If they work hard they will be able to move up at work and reap the rewards of higher pay.
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