Proposal 2: Income Inequality and Executive Compensation


After doing more research for my white paper, I have decided to change my topic to income equality and executive compensation.  We briefly discussed this topic in class when we did the “AFL-CIO: Office of Investment and Home Depot” case, but I would like to investigate the topic further for my paper.  We also learned how there are some CEOs out there, like AG Lafley, who are ready to make the changes necessary in regards to excessive CEO compensation before the government gets involved.

I came across a website called inequality.org , a new portal for data analysis, and commentary on wealth and income disparity.  The website has data and statistics for income, global, wealth, and racial inequality.  They also have up to date articles about executive pay that I think be useful in providing me with current executive pay data.  One of the articles that caught my attention was talking about how the Dodd-Frank pay disclosure mandate is now needed more than ever because the mandate requires all publicly traded corporations to reveal the ratio between what they pay their top executive and what they pay their median workers.  According to the article, CEO outpaced average workers pay by 380 times in 2011 (http://inequality.org/shoving-ceos-online-microscope/).  Forcing companies to reveal this information puts them in the spotlight and highlights how unfair the degree of compensation inequality is at this point in time.

Eventually I want my paper to address this large gap between workers and upper level management and make recommendations for how the U.S. can work on making this gap smaller.  Closing this gap could have a profound effect on the degree of income inequality in the country and starting by working with CEOs to negotiate plans for this problem could be one solution.

 

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