The compensation of top executives has far outdistanced the pay of entry-level workers in the 1980s.
"When it comes to the troops, when performance is down, it seems to be an easier business decision to reflect that in their awards," said Michael F. Emig, principal consultant for the Wyatt Co., a compensation and benefits consulting firm.
The top officers, on the other hand, have friends and acquaintances on the "compensation committees" that help determine what salaries will be set by the companies' boards of directors.
"I've seen CEOs negotiate or plead with compensation committees to be lenient," Emig said.
The result has been an increase in the difference between starting salaries and salaries for top executives.
The Hay Group, a management consulting firm, reports that on a compounded basis, salary and bonus paid to CEOs over the past decade increased three times as fast as those for entry-level workers.
The pay of CEOs climbed at a 13 percent average annual clip, compared with a gain of 5.6 percent for entry level workers, who include accountants, engineers and other professionals.
Where are the groups headed?
They are headed even farther apart because CEOs are considered to be in short supply.
Management consultants also say top executives negotiate rich packages up front because the threat of takeovers, and the loss of their jobs, always looms.
In other words, corporate boards believe that good CEOs are hard to find, and they are willing to pay to get them.