[Arguable] Should CEOs be required to have a salary cap relative to their lowest-paid employees?

Elon Musk’s $56 billion compensation package from Tesla sparked intense debate and legal scrutiny. Approved in 2018, the performance-based package hinged on Tesla reaching ambitious market and operational milestones. As Tesla’s stock price soared beyond expectations, the package’s value ballooned to $101.4 billion by 2024. Notably, Musk would have earned nothing had Tesla not achieved these metrics at the time, few could imagine the company’s stock crossing $400. Was Musk simply rewarded for creating shareholder value, or does this case highlight deeper concerns about executive compensation?

While Musk’s package is an extreme example, the broader debate persists. In 2023, CEOs of S&P 500 companies earned an average of $17.7 million, 268 times more than their median employees.

In this episode, we explore the ethical and practical implications of capping CEO pay relative to lower-wage workers. Would salary caps promote equity or hinder performance incentives? We turn to the philosophies of Immanuel Kant and John Rawls to examine concepts of justice, fairness, and equity in compensation structures. We also look at historical efforts to tackle income inequality and debate how organizations can balance rewarding leadership with ensuring fair treatment across all levels.