The topic of executive compensation is one that is seemingly always under review. The UK has hit upon the idea of making public companies publish the ratio between CEO pay and the median pay for other staff with the idea that this will help highlight fairness and abuses.
In this piece, Amanda Flint of Mercer discusses some of the possible unintended ramifications of this - including the possibility that it might lead to increased outsourcing of low paid staff. Worth a read.
if boards feel that they have been unfairly pilloried as a result of a perceived ‘poor’ ratio, there may be a temptation to adjust the ratio by outsourcing low paid workers either to third parties or (if the ratio is for UK-based staff only) to countries outside the UK where labour costs are lower.