In the business world, a company’s success often depends on its leadership. The right CEO or executives can turn a small company into a global leader. Because of this important role they play, it is not uncommon for Texas companies to pay their CEOs a substantial income and provide other perks. However, some people are calling for more employment regulations when it comes to CEO compensation. A recent study focused on whether CEO pay gains are justified.
A recent study from the Economic Policy Institute, a liberal think tank, echoes other studies that show a negative impact from high inequality in pay. The authors build on previous research to reach the conclusion that the pay of top CEOs over the country’s largest corporations is not necessarily based on the talents and abilities of those executives, nor is the pay scale directed by fair competition in the marketplace. If this is correct, then lowering the pay of the top CEOs would not affect the corporations’ ability to excel in the marketplace, according to the study.