📋 Written Ability Test (WAT)/Essay Analysis Guide

🌟 Understanding the Topic’s Importance

CEO salary caps touch on broader themes like income inequality, ethical leadership, and corporate governance—key issues that resonate with B-schools emphasizing leadership values and organizational sustainability.

📝 Effective Planning and Writing

• Time Allocation:
• Planning: 5 minutes
• Writing: 20 minutes
• Review: 5 minutes
• Preparation Tips:
• Note key statistics (CEO-to-worker pay ratios).
• Identify stakeholder perspectives (e.g., CEOs, employees, governments).

✨ Introduction Techniques for Essays

• Contrast Approach:
  “While CEO pay has soared globally, the average worker’s wages remain stagnant, raising ethical and economic concerns.”
• Solution-Based Opening:
  “CEO compensation reform could address income inequality while aligning leadership performance with company growth.”
• Historical Context:
  “The last three decades have seen an exponential rise in CEO salaries, with wage gaps reaching unprecedented levels.”

📖 Structuring the Essay Body

📌 Achievements

• High CEO salaries attract and retain competitive talent.
• Incentivizing leadership drives innovation and shareholder returns.

📌 Challenges with Comparative Analysis

• Inequitable compensation impacts employee morale.
• Global benchmarks like Japan show a balance between equity and performance.

📌 Future Outlook

• Implement performance-linked compensation.
• Encourage policies that narrow wage gaps without stifling leadership talent.

🏁 Concluding Effectively

• Balanced Conclusion:
  “Capping CEO pay could reduce economic inequality, but a balanced approach, linking salaries to performance and organizational impact, may achieve sustainable results.”
• Global Comparison Conclusion:
  “Countries like Japan demonstrate that fair compensation enhances trust, while unregulated pay gaps risk damaging organizational culture and economic balance.”

📝 Sample Short Essays

Balanced Perspective (100 words):

CEO salary caps spark debate globally. While competitive pay attracts talent and drives innovation, excessive pay exacerbates inequality and lowers employee morale. Countries like Japan, with equitable pay structures, demonstrate that leadership excellence does not require excessive compensation. A balanced approach—linking CEO pay to performance and employee welfare—offers a sustainable solution to this complex issue.

Solution-Oriented (100 words):

To address widening income gaps, companies should adopt performance-linked compensation models. This ensures CEOs are rewarded for measurable success while addressing concerns over excessive pay. Transparent pay policies, profit-sharing models, and government guidelines can balance market demands with economic fairness, improving trust and morale.

Global Comparison (100 words):

Countries like Japan and Switzerland highlight contrasting approaches to CEO compensation. While Japan emphasizes equity with a CEO-to-worker ratio of 67:1, Switzerland rejected strict caps, fearing talent loss. India and the U.S., with ratios exceeding 200:1, face mounting criticism. Adopting globally benchmarked policies, such as aligning compensation with corporate impact, can help achieve fairness without compromising competitiveness.