A VP friend at a F-200 company just had his review: Great job, valuable employee, greater responsibilities, very pleased with having solved major customer dissatisfaction issues …….. 2% raise. The CEO is getting a 25% raise. My friend voted against Exec Comp and Say On Pay. I think this is worth paying attention to as board members and Comp Committee members. He has effectively lost ground the past five years with his raises not keeping pace with inflation in spite of being a highly valued IT employee, while he has seen the CEO pay skyrocket…… And therein lies the widening income gap issue.
We also talked about the relationship bond that previously existed between employees and companies that doesn’t any more for exactly these reasons. Is this good for companies? For consumer products companies, what is the cost of a work force with low morale who keep losing ground? Aren’t they conveying that low morale to the customer rather than an enthusiasm and excitement about their job & their employer? When we encounter employees “who don’t care”, aren’t we really saying we’ve encountered a COMPANY that doesn’t care about their employees and that attitude has rippled down to the employees and now to the customer? Isn’t that why we love eating at some restaurants with really good food and and not others with equally as good food? Are we thinking about the cost of this income gap to the company and to the future of the company?