J.P. Morgan, probably the greatest banker of the twentieth century, thought that the ratio between the CEO’s pay and that of the lowest-paid employee in the firm should be 20 : 1. Dr. Peter F. Drucker, one of the fathers of modern management, has repeatedly warned that the growing pay gap between CEOs and workers can threaten the very credibility of management. In the mid-1980s, Drucker said that no industrial leader should earn more than twenty times the company’s lowest-paid employee because if the CEO took too large a share of the rewards, then this would make a mockery of the contributions of all the other employees.
KeywordsHedge Fund Stock Option Exercise Price Option Grant Compensation Committee
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