| I am not agreeing or disagreeing with the conclusions, but I find the statistics as used in the article to be weak. They had a whole article to convince me and I still don't have confidence in whether there is a problem or not. A few immediate thoughts: Comparing the top 350 firms in 1978 and 2019 is not a fair comparison. There are more and bigger firms today. It is like comparing the ten fastest sprinters at a school of 10,000 and a school of 100. No one will be surprised to find that a bigger pool produces bigger numbers. Average is not a statistically robust metric. A couple of crazy outliers could skew the statistic dramatically, and may not actually give us a clear idea of the typical case. It is not clear exactly what metric the author uses for "reasonableness" of CEO compensation. Is it reasonable for the compensation to be proportional to the size of the organization? Was the 30-1 ratio reasonable to begin with? Should everybody have exactly the same salary? Without some kind of standard or reasoning here, you can't claim that any salary is too high. There are many ways they could rehash their data in a way that I would find more convincing, and it makes me suspicious that I am being fed an inflated story. I would like to see what the median salary-to-market-cap ratio of CEOs in the largest %5 of companies is. Maybe a hard statistic to measure, but we could get a whole lot closer. Disclaimer: I have almost no background knowledge of CEO compensation or wealth inequality, this may indeed be a serious issue that needs to be addressed. However, as a casual observer I find this article unconvincing. |