Three charts have kept my interest for the past few months.
1. Corporate profits are at an all-time high
2. Wages as a percent of the economy are at a low
3. CEO pay continues to grow
4. Workers are more productive, yet wages haven't matched that productivity
Given the combination of the above, I make the following modest proposal to address the above issues:
1. Overall compensation increases for Key Employees and Highly Compensated Employees, as defined by the IRS, will be capped...UNTIL
2. Compensation increases for the rest of the employees averages 5%.
3. Thereafter, the cap is removed.
A simple enough example:
a) It would take $500,000 to raise the compensation of the bottom 92% of employees by 5%
b) The top 8% could not see their overall compensation raised by more than a total of $500,000 until part a is reached.
1. If you want to pay exorbitant amounts of money to your top level people, go wild....as long as most employees see some gain from the success of the organization
2. By averaging compensation at 5% for lower-level employees, it provides flexibility to recognize high performing employees.