Timothy: “There is a much larger talent pool of people willing to work for reasonable (vs outrageous) salaries”, really? In the interests of shareholder return, why are these people not employed at a lower rate? is there a conspiracy to exclude qualified people with a social conscience? Can a business not be successful if run with a social conscience? Dick Hubbard seems to do OK.
I respect janitors, perhaps more than executives, but I suspect once the janitor has a suit on he might believe he is worth as much as the next guy doing the same job.

If the salary cap was a proportion of the company’s average wage with bonus/performance additions regulated to stricter success measures and the ‘golden handshake’ made illegal, it would help redress the inequality and wage stagnation and certainly send a signal of the way we want our businesses to behave.

Don’t underestimate the janitor. Seriously though, we over-estimate the ability of so-called top executives. There is a much larger talent pool of people willing to work for reasonable (vs outrageous) salaries. And I’m guessing those are the people more likely to work in the interests of the broader social good rather than just line their own pockets.

I understand the issue, but the horse has long bolted I fear. Capping executive salaries will see a trail heading offshore and who will manage the company? The janitor?

I’m not how this would work but have thought about it many times myself. A boss of a company that get a salary could be limited by the avaerage pay of their employees (i.e. 200% of avaerage pay). There would have to be thought towards bonuses & perks. No CEO should get bonuses when a business is underperforming either. Owners would just use drawings instead of pay which is completely understandable.

Agree, spotlighting the true value of work and rewarding with fair remuneration/respect along with equalising the disproportionate gaps NZ has is a real issue to tackle. Affects people at all levels of the pecking order. A % pay increase of bugger all equates to bugger all. Pretty clear from our impacts of recent natural disasters, that when the chips are down the people who actually do the manual typically under-valued work eg. sort out sanitation, water quality, teleco connectivity, food safety and availability (shop workers), nursing care/first aid, road workers … these are in fact some of our most essential people to keep the cogs turning. We’re all in this together. So, share the wealth and watch crime, mental illness, family violence, child mortality, healthcare burdens …. reduce. Unleash the creativity and invention of people currently shutdown and tied up, by their low incomes.

I like Graeme Kiyoto-Ward’s thinking – some form of ratio based cap. Of course it can be easy to circumvent through stock options and the like. Instead, why not have a super high top marginal tax rate. Like anything over $1M per annum gets taxed at 85%. It wouldn’t raise much revenue because it sends such a strong signal that companies and sports team owners would soon stop paying such salaries.

We’ve seen the result of Brexit and the Donald Trump phenomenon, the same could happen here if the wage inequality continues.
I would like to see a day in the life of a CEO earning $4,000,000.00

Perhaps a better approach is a ratio between average/median pay and executive pay taking into account size of company. This does fall apart of the CEO is also the owner of the company as it could cap the reward of their effort. e.g. CEO cannot be paid more than 5 times the median wage plus 2 times the median wage for each 1,000 currently permanently employed full time equivalents. Would encourage higher median wages and hiring more permanent employees. Downsizing would come with a pay cost for the CEO. Not sure how I feel about this topic but that’s some kicking the ball around to get some mental juices flowing. Over to the rest of the team.

Part of the problem is that if the CEO gets a pay rise of, say, 3%, and the cleaner gets that same 3% rise, then year after year the CEO stretches their lead. A wise man once said to me that the rubbish collector’s job is just as important as the surgeon. But we only start valuing the rubbish collector after a couple of weeks of no collection. And, just for arguments sake, realistically, who really needs more than $100k to live on?