Analysis of Income Disparities within Hierarchy and Profits of Firms and Its Impact

Abstract

This study sets out to look at how pay gaps inside companies move up the hierarchy and how those gaps relate to the firm’s bottom line. Increasingly, the huge difference between what top executives take home and what the average worker earns catches everyone’s eye, raising questions about fairness and profits alike. Here, we map where the pay is spread across job grades and check if it lines up with key financial numbers like profits, return on equity, and shareholder rewards. Drawing on payroll and balance-sheet data from a sample of companies, we run plain-vanilla statistics to spot meaningful trends and to see if bigger gaps really hurt or help performance. Findings should shed new light on in-house inequality and give managers, investors, and workers ideas for fairer pay that still feeds healthy earnings.