Fundamentals of Management, 8th ed

Chapter 10: Managing Employee Motivation and Performance

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Finally, we should note that the gap between the earnings of the CEO and the

earnings of a typical employee is enormous. First of all, the size of the gap has been

increasing in the United States. In 1980, the typical CEO earned 42 times the earnings

of an ordinary worker; by 1990, this ratio had increased to 85 times the earnings of an

ordinary worker; in 2009, the ratio was 263 times the earnings of a typical worker. In

Japan, on the other hand, the CEO-to-worker pay ratio is 16 times; in Germany, the

ratio is 13 times.

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