There has been some discussion as to the impact on employee morale of the
growing earnings gap within organizations. As a compensation consultant
who has been watching this develop over the past many years, I may have
some insight as to why this trend exists. The justification I have heard
most often from corporate executives is that:
1. Since employee payroll costs are such a large part of total
operating expenses, we must control this cost very carefully either
through modest increases or through head-count reduction
2. Since executive payroll costs are such a small part of total
payroll costs, it is not a major concern. It is much more important that
we pay our executives generously so that we can get and keep the best
talent that money can buy.
My fellow compensation consultants earn a good living by feeding lines
like the above to Boards of Directors. And since most boards are made up
of executives who all sit on each other boards, it only makes good sense
to take care of each other.
-- Roxanne Abbas Compuserve: 75263,3305 Internet: "Roxanne S. Abbas"<75263.3305@compuserve.com>