Some large companies are known to pay their top managers very, very high salaries. A consequence of this is a growing gap between the lowest and highest salaries paid in those companies. It is possible that the highest paid employee earns 400 times (or more) as much as the lowest paid one (e.g. $20’000’000 vs. $50’000). Many people don’t understand that. Myself included.

Sure, a company is free to pay as much as they want. But I am missing a bit of a sense of “modesty” and a discussion about fair salaries for top managers. The big question here is of course: “What means fair?”. I think that is something which has to be defined inside the companies (together with the shareholders as they are the owners), and can and will be different from company to company.

An approach to define “fairness” could be to take the minimal wage and to define a multiplier to calculate the maximal wage the company is willing to pay. So a multiplier of 5 means that all salaries would be in the range of $50’000 to $250’000 if the minimal wage is $50’000.

It would be interesting to see which companies are more successful, those with a low multiplier or those with a high multiplier? What do you think?