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In: Finance

What is the difference between equal pay and comparable worth? Why are these concepts so important....

What is the difference between equal pay and comparable worth? Why are these concepts so important. To what extent (if at all) do you feel CEOs are overpaid? Explain

Solutions

Expert Solution

The Equal pay concept is to provide the same wages to a woman and a man, in that case if a woman who is doing the exact same job.

Comparable worth : is more focussed on sex equity, it states that both men and women should be paid the same wages for the work which required comparable skills, responsibilities and effort.

These concepts are important so that no one is underpaid or paid below their efforts irrespective of their sex as it is illegal to pay different wages to male and females for performing the same work, requiring the same level of skills and effort.

The CEO'S are in the top level management of the company. This work requires a lot of skill and effort and hence they are paid accordingly. Their skills are worth the amount of money they are paid. Since, the value of a good CEO is extremely high, thats why it justifies the pay for these top level executives of the firm. Hence, overpaying them is actually beneficial for the firm as it leads to an increase in the corporate performance and increase in the shareholder value as well.


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