A while back, I was involved in benefits benchmarking studies, and worked with people who provided executive “total compensation” studies to our clients.
The norm was this:
Our clients wanted to be at the 50th percentile for broad employee benefits, and would look at increasing where they fell behind or decreasing, say, health insurance contributions, where they came out as more generous than average.
At the same time, our clients targeted the 75th percentile for executive compensation.
You can see how each and every company targeting the 75th percentile for executive compensation would produce out-sized executive compensation growth. The impact of the 50th percentile target is less clear — depending on whether employers with relatively rich or relatively poor benefits provision were more likely to commission employee benefits studies.
But is this a cause of income inequality, or just an effect?
Ad-Free & Subscriber Log-In