4. Other Recommendation – Although not a Drucker recommendation, an additional solution that was discussed was setting a limit on the amount of executive compensation a company could deduct for tax purposes.

Drucker admitted that perhaps there were other ways to balance executive compensation with performance and at the same time maintain an equitable relationship between top-management compensation and that of the other employees.

He concluded by saying, “And some answers will be worked out within the next few years – unions and politicians will see to it.” Were they?

Wage Gaps & Bailouts According to the Economic Policy Institute, “Pay packages for average CEOs were 262 times higher than the average worker’s pay

in 2005, up from 71 times in 1989 and 24 times in 1965. ”In 2007, CEOs in the S&P 500, averaged $10.5 million annually, 344 times the pay of typical American workers.

This was a drop in ratio from the year 2000, when they averaged 525 times the average pay.

But to answer whether Drucker’s earlier insight into whether excessive executive compensation issue has been addressed, the economic turmoil of 2008 provides some interesting perspectives.

The Troubled Asset Relief Program, commonly referred to as TARP, was a program of the United States government to purchase $700 billion of assets and equity from potentially failing large financial institutions to strengthen the financial sector and supposedly to prevent the economy of the world from collapsing.