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Wednesday, October 8, 2014

CEO Compensation

Mr Sirota (letters, October 8th. 2014) links two things that do not need to be linked at all.

The first is the pressing need for the public sector to afford all the things hat we, as citizens, have demanded that it do. This means more income for government. Higher taxes on income might be one way of doing that. Alternatives include taxing financial transactions which I support, or changing the expenditure side by cutting back on subsidies to corporations (which I might support)) and entitlements like Health Insurance or Social Security, which I do not support.

The second is the ratio of an employees wage to that of the top executive. Mr. Sirota is right, the CEO is not in the set of people to which the ordinary worker compares his or her self. However, he ratio has got out of hand. One solution to reducing the inequality would be for firms to adopt a policy in which when bonuses are issued to top managers an equal percent bonus also be issued to all employees. After all, each in their modest way has contributed to the overall success of the firm.

Such a policy would, I believe, enhance morale in the firm.

Sent to New York Times

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