Katlyn’s MGMT 449 Blog

Although this does depend company to company, a CEO has an incredible amount of work responsibilities. Realistically, more responsibilities than we will ever know as their tasks are forever changing. However, taking the trend statistics that were provided through the PBS document, I believe it is highly inappropriate that since 1973, the pay gap between CEO’s and other employees are increasing more and more. This ratio started at 45:1, and grew to 500:1 by 2002. Is this applicable to every company? Absolutely not. However, it is quite alarming that it was an average statistic in the early 2000’s. Although there has been major light shed on this topic since then, there is still an unfair pay ratio today. Upon further research, the CEO-to-worker pay ratio for CVS Health Corporation is 434:1. Yes, it is lower than the ratio given in 2002, but is this large gap necessary even when a company starts to heavily grow? In my opinion, no, but it doesn’t stop there. Some companies are within the thousands as far as their ratio goes! So, why is there a rise within executive compensation?

There are many factors as to why the CEO-to-worker pay ratio has increased. One of them being the extreme competitive nature within the CEO market – especially since the pandemic hit. For obvious reasons, each company wants to have the best CEO, but how do they capture the attention of the best individuals for the job? As each company raises their incentives, surrounding companies will also do the same in order to have the best of the best within their organization. In turn, this creates a positive feedback loop of some sort that only raises the gap within the pay ratio as companies want to remain competitive.

Additionally, since the pandemic has negatively impacted businesses around the world, many companies are willing to do anything to gain the best individual for their CEO position in order to save themselves. However, this plays into the positive feedback loop even more so. Another factor as to why there is a rise in executive compensation is that CEO’s naturally have more power to change their incentives and pay. With such power at the company, they are able to have more stock options and other benefits that only widen the unbalanced ratio.

There is not one aspect or recommendation that can simply work to decrease the large ratio gap. However, there are things that companies can implement in order to manage their own CEO-to-worker pay ratio. For example, they can implement policies that limit CEO incentives and their power to change such incentives and other benefits such as stock options. Companies do want to be competitive in order to have the best and most fitting individual as their CEO, but they need to implement policies in order to maintain an appropriate ratio among their other workers. There also needs to be a change in ideology. Companies do need to pay their CEO’s a fair and competitive wage, however, if their ratio widens, how would this look within the public eye as there is already a push to close the gap a bit? For the purpose of public relations and fair employee compensations, firms need to address this issue through possible policies that limit and reduce some CEO incentives.

My ranking list of benefits:

1. 401 (k) plans
2. Medical insurance benefits
3. Dental and vision coverage
4. Paid sick time
5. Life insurance
6. Flexible scheduling
7. Tuition assistance
8. Relocation options
9. Child care assistance
10. Wellness programs (possible remote options)

As previously stated above, my top three most important benefits I not only want, but need, are 401 (k) plans, health insurance benefits, and dental and vision coverage. I would actually say that a dental and vision coverage would rank within the same position as medical insurance. The reason being that my family has a history of bad vision mainly from my mother’s side, and as of right now, I would say that I most likely take after her. My vision is not terrible, but I am confident that it will worsen as years go by. Additionally, 401 (k) plans are extremely important to me. This might stem from fear due to hearing others say that they wish they had a 401 (k) plan as they are now nearing their 60s, but through their experience, I had the chance to learn from their mistakes. Or at least what they view as their own mistake.

Paid sick time and life insurance has always been important, but since the pandemic, I have come to realize the large impact those two benefits truly have. I’m sure that employers have also come to realize the importance of those two for their employees in recent years as well. These two factors are relatively high on my ranking list due to my priorities and desires changing as the world changes. We did not realize the magnitude of this current pandemic, and who’s to say that we might not realize the impact a future pandemic could have.

My rankings for flexible scheduling, tuition assistance, and relocation options are a bit lower on my list because of where I am in my life. Currently, I do not necessarily have a whole lot of priorities after college other than working a full time employment position. I do have student loans, but with the help of my parents, we have created a payment plan that will work with my life and as my life changes year after year. Additionally, I am at a point in my life where I am not sure where my forever home will be. While looking into companies I was surprised to see that many of them offer relocation options and benefits for their employees. A company I recently interviewed with also offers that option as well. However, I still ranked it lower because relocating is not necessarily a priority and is not something that I am considering or wanting any time soon.

Lastly, child care assistance and wellness programs are not exactly crazy important to me right now. However, I see them intertwining together later in my life. After doing some research it looks like wellness programs are exponentially changing as the world changes. They are starting to offer remote work within wellness programs for employees, and I believe this will come in handy once I start to expand my family later on.

Utilizing my experience in company research for job purposes, I have realized that benefits heavily depend on the average age of employees at that specific organization. Some companies are known to hire employees right out of college, or their entry level positions are filled with bright-eyed and bushy-tailed recent college graduates. From that, I have been noticing a correlation between those employees and the company’s benefits. With a company I recently interviewed with, their entry level positions are filled with recent college graduates, and they offer benefits such as tuition assistance and relocation options. While talking to my older brother, he said that his company does not usually hire recent college grads, and that he does not have those two benefits available. It could be a reach, but I am noticing a stronger correlation between average employee age and stage in life, paired with certain benefits that the company offers. This could be due to wanting to attract certain employees for the company or attempting to keep a certain company culture alive.

A couple of years ago, I found myself landing a job within the housing industry. Although I was not completely satisfied with the work itself, there was one factor that motivated me to stay- that being the benefit of having my rent discounted as I was a resident and an employee of that apartment complex. Not only that, but the pay was great! Although I was not necessarily satisfied with certain aspects of this job, I gave 110% of my efforts every time I went in for my shift. Making phone calls, tending to residents, persuading individuals to sign a lease, the list goes on and on. Not only was it great experience, but it gave great strength to my resume and my set of skills.

Although it sounds as though I completely loved the job, as I said before, I found myself growing to dislike certain parts of my job as time went on. I no longer work here, but looking back, I really only had one motivator that benefitted my work ethic. This apartment complex was not necessarily affordable with my financial means, but I knew that if I kept my job, my rent would be lowered and reasonable. It was not a matter of staying within this job because I felt a sense of loyalty to the company, but instead a sense of loyalty to my parents, as they provide financial help. I felt as though keeping my job would decrease the amount of expenses for my parents and I during my time in college. After my lease had ended, that was when I chose to end my employment and search for another job and a new place to call home for the upcoming academic year.