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It provides a proxy to whether the management is looking to increase worker morale and productivity for long term gains, or inflate stock prices for short term
by dbcfd 11y ago
It provides a proxy to whether the management is looking to increase worker morale and productivity for long term gains, or inflate stock prices for short term gains. It also provides a way to compare companies within an industry, to see which might be overpaying management, with stock returns varying accordingly.
- austenallred 11y agoBy median pay of other employees? OK, so McDonalds is 10,000:25,000,000 Now what?
- dbcfd 11y agoSo Burger King has a ratio of 10,000:30,000,000, but it has a lower profit margin. Shareholders can then push for a change to compensation, since their CEO is likely overpaid, or their workers are underpaid.