Question

According to noted economist Thomas Piketty:
a. the annual pay for top executives should include a small guaranteed salary and should include a very large bonus in years where the firm earns higher profits than competitors.
b. CEOs should not earn much more than 10-20 times the earnings of the company's average salary.
c. top executives are entitled to any level of pay they can negotiate with their board of directors.
d. all bonuses paid to CEOs should be tied to long-run increases in market share.

Answer 1

Answer:

b. CEOs should not earn much more than 10-20 times the earnings of the company's average salary.

Explanation:

Thomas Piketty was a French economist born on the 7th of May, 1971 in Clichy, France.

In 2013, Thomas Piketty published a book "Capital in the Twenty-first Century." The book focused on the wealth and income inequality from the 18th century in United States of America and Europe.

According to the notable economist Thomas Piketty, the Chief Executive Officers (CEOs) of an organization shouldn't earn much more than 10-20 times the earnings of the company's average salary.

He argues that this would help to spread wealth among the citizens (employees) rather than a minority of the larger population.

Thomas Piketty's argument was based on the formula that relates rate of return on capital (r) to economic growth (g).

Rate of return on capital (r) are dividends, profits, interests and rent from capital while economic growth (g) is measured by the nation's income.