''INEQUALITY AVERSION'': A DISCUSSION OF THE DIFFERENTIALS BETWEEN WORKERS AND MANAGERS WAGES AND THEIR IMPACT ON THE EVALUATIONS OF INVESTORS
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In recent years, there has been a tendency to gradually increase the wage of CEOs, in contrast to those of employees who most often remain at the same or lower levels. In this dissertation, the inequality of wages between CEOs and employees in US companies was studied, as well as the impact of this inequality on the valuations of investors. For this purpose, data were collected for each company from all industries for the period 2017-2020 (due to the SEC reform that was activated in 2017). In particular, the Stock Returns of the US companies were studied and specifically to what extent they are related to the Pay Ratio, as well as to other control variables such as Price-to-book Ratio, Total Assets etc. Indeed, the study of empirical analysis showed that the company's Pay Ratio and the valuation are strongly correlated. There is also a link between Stock Returns and other control variables. In general, what emerges is a negative correlation which means that the wider the wage gap, the lower the valuation and returns of companies should be expected.