Wage asymmetries in Portugal: The top executive–worker pay gap and its implications for Sustainable Development Goal 10
Year: 2025
Type: article
Abstract: The debate regarding executive compensation frequently arises, questioning management models, the fairness of the distribution of surpluses generated by companies, and their relation to corporate performance. In this context, the relationship between executive compensation and the wages of other employees gains significance and is a topic discussed in various countries. For some, this is merely the result of market mechanisms. In contrast, for others, concerns arise from (potential) information asymmetry between managers and shareholders, discussions about the purpose of companies, and the boundaries of business ethics. This study examines wage asymmetry in Portugal using data from the largest companies listed on the Euronext Lisbon stock exchange. It employs the ratio between the CEO's annual compensation and the average annual worker salary—a proxy for the CEO–Worker Pay Ratio, which publicly listed companies in the United States are required to disclose. Portugal presents a compelling case for analysis, as it occupies a distinct position within the framework of varieties of capitalism and ranks among the European Union countries with significant income distribution asymmetries. Our findings suggest that, while wage asymmetry in these companies is substantial, it remains lower than in several other European countries, and particularly the United States.
Source: Innovation and Green Development
Authors: Pedro Verga Matos, Pedro Neves
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: gold
Estimated APC paid: $1,900
OpenAlex ID: W4416440507