Managerial Economics & Organizational Architecture 6th Edition by James Brickley , Clifford Smith ,Jerold Zimmerman

Exercise 9

The United States congress has considered proposals that would limit the level of top executive pay to some multiple of the lowest-paid employee in the company (for example, executive pay must be less than 10 times the lowest-paid employee). Do you think this type of proposal is a good idea Explain what effect the proposal would have on the involved companies.