Should there be a maximum limit that businesses can pay their CEO?

Yes

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by Jeff Franklin

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It is "beyond the beyond" that corporate CEO's can get 500 to 1000 times the pay of the average employee of the company, business or corporation. A generation ago, compensation for CEO's or company presidents settled for 5 to 25 times the average pay, a fraction of what it is today. Add insult to injury, it is a slap in the face to many extremely hard working, loyal employees who face every day on the verge of poverty or out right loss of employment, and economic oblivion, altogether, while their corporate CEO is guaranteed a "platinum" parachute worth hundreds of millions of dollars in severance and retirement pay. I personally do not know what the end game this continued abuse will lead to, but I can imagine it's not any prettier than a full-scale great depression, or a regional war that becomes global, maybe nuclear.

If it were up to me, I would forcibly restructure all American companies like the Japanese model with regard to CEO pay. The Japanese cap their CEO pay to no greater than seven (7) times that of the beginning or lowest pay level of the company. I would use six levels of pay. The following is how it would work:

Pay level one, the base reference annual pay, would be for company supporting personnel such as custodians, general secretaries, clerks, etc. Level two would be the "entry level" for a college educated field of major study related to the position. For example: this would be sales and marketing, computer related, or professional sciences such as engineering. Profession secretaries educated in the related field would be at this level. Level three would be the first promotion of level two employees, and the first level supervisors. Level four would be the final promotion for non-supervisory employees and for middle management supervisors. Level five would be a promotion into upper management (which also includes all board of trustee positions). Level six, the final level, would be held by the CEO, and/or president (including any vice president), or company head which may be titled Director, Governor, or Chairman.

Level one defines a base annual reference pay from which the others are based. Each subsequent annual pay level is equivalent to the preceding level plus the base pay. In others words, level two is twice level one. Level three is three times level one. And so on till level six, which is six time level one.

Now, for example, a reasonable annual base level in today's dollars might be $25,000 per year. Level two is $50,000. And so on to level six, which is $150,000 per year. This pay schedule makes the pay much more fair and in proportion to duties and responsibilities to the company. Note, the CEO's pay is reduced 1000 times from the absurd $150 million they get now. NO ONE deserves that pay for ANY duty, period. This also recognizes more "Indians" and fewer "chiefs", the way any organization should be structured. It's high time today's "chiefs" or CEO's recognize that without the "Indians" they would have no company, product, service or customers - the BACKBONE to any and all companies, whether domestic or global. It's beyond time CEO's quit taking their subordinates and customers for granted.

Finally, there would be automatic, mandated real cost of living increases to these pay levels annually, which would be based on the whole inflation index for consumers, not the half ass lie the government puts out, which doesn't include energy and food costs. In addition to this, every employee receives "longevity pay" which is incremented to his or her pay at one percent per year or five percent every five years, continuously.

Enacting this universal compensation formula and plan eliminates the rampant unfairness, bureaucracy, and profound frustration that has plagued working Americans for decades. It recognizes and rewards the American work force and puts compensation into proper perspective and proportion to services, duties and responsibilities. Employee morale and productivity would soar, as would the general economy, if this plan was put into place. If you look at the preposterous and insane CEO pay today, and cut it down to size, suggested above, the millions of dollars would go a LONG way to raising the "Indians" pay up to where it belongs and in PROPER BALANCE. The companies have the money, plenty of it. It's time it go to the employees and NOT just one person!

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