In all the uproar about The Globe, I seem to have missed a hugely important factor: the Executive Compensation Ratio (ECR).
What is the ratio of executive pay to “average” worker pay at the Globe? While I understand that none of those numbers are exact, surely we can still see whether the number is closer to 40-1 (as it was in the US in 1980) or 400-1 (as it has been during the Cheney/Bush era).
If the Executive Compensation Ratio is in the vicinity of 40-1, then I suggest that all parties batten down the hatches, get their foul weather gear on, and work together to get their enterprise through this hurricane.
If the same ratio is in the vicinity of 400-1 (or more), then I suggest that it’s time to examine the size of the resulting excess compensation pool, and ask how far that wealth will go in helping weather the storm.
I submit that a 40-1 Executive Compensation Ratio is already generous for the executives. I submit that the unions should not budge a penny until the executives have calculated the total excess amount they’ve bled from the company.
The executives should then deposit, from their own wallets, that amount. They should reset their own executive compensation packages to line up within the 40-1 constraint, before any further concessions are demanded from the workers.
Then, and only then, should labor and management together address the question of what changes to compensation structure, from today onward, might or might not be needed to weather the storm.