Research participants were more willing to buy towels from a company with a small gap between CEO and worker pay than from one with a large gap, according to research by Bhayva Mohan, a doctoral student at Harvard Business School, and HBS professors Michael Norton and Rohit Deshpande. In the experiment, the large-gap company was said to pay its CEO 1,000 times more than the average worker (that's believed to be the gap size at Walmart). Smaller-gap companies ranged from 5 to 1 to 60 to 1, but participants showed the same preference across the board. In fact, more than 30% said they would pay more for the towels when given the option of two different companies with two different compensation ratios, Gretchen Gavett writes on HBR.org.
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