Answered Question

guiltpop

February 11, 2009 12:11 AM

Is there a name for CEO pay based on worker's pay?

"Performance based pay" is a common term for CEO salary tied to company performance. But is there a commonly used term for CEO's who tie their pay scale to the wage of the "common worker" (I believe the CEO of CostCo does this)

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betsyb

February 11, 2009 05:05 PM

I could not find a specific term for what you are describing. Performance bonuses and/or stock options are common for several levels of executives as well as a CEO. I looked into the CEO of CostCo, Jim Sinegal and it appears he has a flat rate for his salary. He says, " I figured that if I was making something like 12 times more than the typical person working on the floor, that that was a fair salary." However, as a co-founder of the company, Sinegal owns a lot of Costco's stock.
In any case, I think your idea is interesting.
Source(s):
http://abcnews.go.com/2020/business/story?id=1362779
http://209.85.173.132/search?q=cache:hIG7wB3vjQcJ:moneycentral.msn.com/cont...
http://209.85.173.132/search?q=cache:0JGMedmjNiYJ:walmartwatch.com/blog/arc...

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