We discussed it a few months ago: While Germany’s CEOs preach team spirit, many of them are paid as if the well-being of the company depends first and foremost on them alone. And in the meantime more and more studies prove that high salary differences can poison the climate. “The growing inequality can have a demotivating effect on the entire workforce and harm the company as a whole,” said business administration professor Joachim Schwalbach recently to WirtschaftsWoche. A study by the University of Berkeley, for example, confirmed that employees rate working conditions worse when salary differentials are high.
Low pay ratio: advantage in competition for talent
In addition, it became apparent that such companies are less attractive to applicants – a considerable disadvantage in the age of a shortage of skilled workers (especially since analyses of the pay ratio have caused headlines and, most recently, Deutsche Post has been in a bad light). Conversely, this means that with fair salary structures, supervisory boards can give companies an advantage in the competition for specialists and managers. The pay ratio is particularly low at Commerzbank, for example: CEO Martin Zielke received 25 times the pay of a typical employee in 2017, making him one of the “best” managers’ salaries – at least from the company’s point of view.