The CEO-to-worker pay ratio in modern businesses

This paper discusses the phenomenon of the growing difference between CEO and worker wages in modern businesses and traces its origins to the Tournament Theory. The first chapter provides an in-depth analysis of the tournament theory, including its foundational principles and Rosen's study on multistage tournaments in hierarchies. The second chapter examines the history of the CEO-to-worker pay ratio, its justifications, and its impact on modern businesses. The chapter also explores the possibility of an ideal pay ratio. The third chapter focuses on the sustainability of the CEO-to-worker pay ratio in the long term, including its implications for businesses, employees, and society. The chapter also examines the factors that contribute to its sustainability and the policies implemented by countries to address the widening pay gap.