From the Economist Magazine
RIGHT and left, Americans and Europeans, stockmarket investors and anti-globalisation campaigners all share one belief: top managers pay themselves too much. The evidence seems to bear them out. For almost half a century the ratio of top executives’ pay to median earnings was as smooth as a boardroom table. Then, starting in America in the 1980s and a few years later elsewhere, this ratio began to increase before taking off exponentially and peaking around the turn of the millennium (see chart 1). At that point the worker on an American shop floor was earning in a year roughly what his boss on the top floor took home each evening.
Most people think they know what lay behind this. Greedy chief executives, abetted by weak, sycophantic boards, gorged themselves at the expense of saversmore often than not the very pension and mutual-fund investors who, as workers, had seen their salaries and benefit packages fail to grow.