In Canada the top 100 CEO's earn 240 times the salary of the average Canadian. The trend is up as in 1998 the ratio was 104 times. You may be surprised to learn that I think this is Bullshit!
Lets apply a little common sense here. Suppose you were to set up a salary scale for a large corporation and you wanted to accommodate both entry level, middle level, professionals and executive level employees. Lets start off with the person pushing the broom and cleaning out the toilets. Lets call that job an entry level position and assign it the value of level 1 pay. Level 1 pay may be close to the minimum wage. That's your starting point.
Possibly you have more than one person pushing a broom and cleaning toilets because of the size of your organization and the fact that shift work is involved so you need a Cleaning Supervisor. Lets assign level 2 wages to that person. Your company continues to grow and now you have three plants each with its cleaning staff and supervisors. Now you need a Cleaning Manager and she is paid Level 3 wages.
Well shucks if your darn company doesn't grow like a weed and now you have 50 plants. You need a Director for the Cleaner Managers so that person gets level 4 wages.
Your company needs an expert in engineering so you hire an Engineer and pay him level 4 wages. You need a Senior Financial Officer so you crank up her payroll to level 5 wages. Now you want to let somebody else manage the company so you need a CEO so you pay him level 6 or 7 wages.
Here is how the annual income would work if you doubled the wage at each step.
- Level 1 $15,000
- Level 2 $30,000 or 2X the level 1 rate
- Level 3, $60,000 or 4 X the level 1 rate
- Level 4, $120,000 or 8X the level 1 rate
- Level 5 $240,000 or 16X the level 1 rate
- Level 6 $480,000 or 32X the level 1 rate
- Level 7 $960,000 or 64X the level 1 rate
In this example 240 times the base rate is a salary of 3.6 million dollars a year.
Now dress me up and call me stupid but I would think that a compensation package based on seven levels where the first level is the minimum wage and each subsequent level is double the preceding level would be an entirely fair approach. But to pay the CEO 240 times the base rate is obscene and yes you guessed it -its Bullshit!
I am talking about public companies not private companies owned by the CEO in which case they should be free to pay themselves anything they want to. But in the case of public companies paying these obscene wages is clearly a case of the senior executive using the company treasury as their private piggy banks at the expense of the share holders.
Is there an easy fix here? Absolutely. You could tax the crap out of any payments more than 64 times the minimum wage. You could take a 100% tax. Or you could legislate and change the Company Act to read that CEO salaries be no more than 64 times the annual minimum wage for that year.
Those familiar with even basic math and human nature will immediately see the effect a policy like this might have on sharing the wealth. You see the more the dude at the bottom gets paid the more the dude at the top can take home. Its now in everyone's interests for the firm to do well. There is nothing wrong with being rich or eating well but there is a certain amount of evil in pure raw greed and gluttony. Not to put too fine a point on it there would be no problem here if folks just worked with a common purpose and shared a bit more!
Will it ever be done? Hahahahahhahahhaha. Of course not!
