Saturday, October 04, 2008

An Equitable Way to Pay CEO's

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For those who think understanding a home loan should have been a no-brainer for an inner city person, you will have no trouble following this potential cap on CEO earnings. The notion is, the bigger a company is, the more stable it is at earning income. Yes GM may be the exception.

The CEO may not earn per year more than 10 million time more than the minimum wage worker who works 8 hours a day, 5 days a week, all year long, divided by the total number of employees earning twice that amount, or less. If a company has just one such employee, the CEO can make 137 billion at current rates. Of course, if a company has 100,000 such employees, he will make considerably less. This will incentivize paying more to existing employees, and raising the minimum wage. It will also discourage MegaCorps.

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