Going to Extremes: CEOs vs. Slaves
Recent findings shed new light on the increasingly unequal terrain of American society. Starting at the top executive level: You may have thought, as I did, that the guys in the C-suites operated as a team -- or, depending on your point of view, a pack or gang -- each getting his fair share of the take. But no, the rising tide in executive pay does not lift all yachts equally. The latest pay gap to worry about is the one between the CEO and his -- or very rarely her -- third in command.
According to a just-reported study by Carola Frydman of the Massachusetts Institute of Technology and Raven E. Saks at the Federal Reserve, 30-40 years ago, the CEOs of major companies earned 80 percent more, on average, than the third-highest-paid executives. By the early part of the 21st century, however, the gap CEO and the third in command had ballooned up to 260 percent.
If it doesn't work in the rarified atmosphere of the c-suits, imagine how well it doesn't work for the rest of the people.