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by cpeterso
2972 days ago
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Ben & Jerry's originally capped the pay ratio of their highest salaried executive and lowest-earning-worker to 5:1 ($150,000/year and $12/hour in 1995), but over the years they raised the ratio to 7:1, 17:1, and then stopped sharing a ratio after Unilever acquired them in 2000. http://abcnews.go.com/Business/companies-follow-ben-jerrys-l... |
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A hard ratio seems fair minded, but seemed to have failed here because I think there was a misunderstanding around compensation. Compensation is a product of many variables including value created for the company and supply/demand for skillset/talent. As a business climbs the value chain or seeks to hire and compensate those that create greater amounts of value, and it maintains a compensation ratio, it must seek to increase the value produced by the lowest earners (or lose business to competition).