Boards of directors often focus heavily on CEO compensation, but they tend to overlook a crucial factor that influences organizational trust: the pay gap between the CEO and the average employee. In the United States, public companies are legally required to disclose the ratio of the CEO’s pay to that of the median worker. This regulation, in place since 2017, mandates that this figure be included in every proxy statement filed with the stock exchange. This transparency aims to highlight income disparities within companies and encourage discussions about fair compensation practices.
QUESTION: How might understanding the pay gap between CEOs and average workers influence your perspective on fairness and equality in the workplace?
You’re probably ignoring the most important number in your company
