24 Mar '12, 11am
The Wealthy Employee: Why Money Ought to Go Below the CEO #susty
You would expect higher levels of CEO compensation to correlate to increased shareholder value. But does the ratio of CEO-to-worker pay correlate with higher financial performance? For an overall portfolio, HIP has calculated that a lower ratio of CEO pay to average staff pay correlates to higher levels of financial performance. However, results for individual companies may vary widely. HIP investors realize that CEOs can be paid relative to increases in long-term shareholder value, but that overall lower CEO-to-worker pay ratios connote more employees sharing in the wealth, which fosters higher employee dedication and productivity resulting in financial success—for the CEO, the workers, and you as an investor.