EXECUTIVE BARGAINING

American CEO pay has risen exponentially since the 1980s as labor union power has declined. The key reason is executive compensation committees are detached and thereby raise CEO pay as if they were spending other people's money.

 

Executive bargaining is a solution to the above problem in which employees from across the company directly negotiate executive compensation with the CEO. Employees have information of the inner functioning of the company and motivation to negotiate for efficient executive compensation as alternative beneficiaries of these resources. By keeping executives accountable to employees, this process could also improve company culture and morale.

To hear more about the historical and comparative research behind this idea, email us at info@outsideinnovation.org.

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