The topic of CEO salary caps has appeared several times in IELTS Writing Task 2 exams, particularly in 2019-2022. This theme reflects growing global concerns about income inequality and corporate governance. Based on analysis of past papers, questions about executive compensation typically appear in Agree/Disagree or Discussion format essays.
Let’s examine one recent IELTS question on this topic:
Some people think that there should be a cap on CEO salaries to reduce income disparities in society. To what extent do you agree or disagree with this view?
Analysis of Question
- Topic: Executive compensation and income inequality
- Task: Agree/Disagree format
- Key aspects to address:
- Economic implications of salary caps
- Social impact of income disparities
- Effectiveness of regulation
- Market forces and competition
Model Essay 1 (Band 8.5)
While growing income inequality has sparked calls for limiting executive compensation, I strongly disagree with implementing strict caps on CEO salaries as this would be both impractical and potentially counterproductive for economic growth.
The primary argument against salary caps is that they interfere with free market principles that drive innovation and economic progress. CEOs often earn their high compensation through delivering exceptional value to their organizations, leading complex global operations, and making strategic decisions that affect thousands of employees. Artificially limiting their earning potential could discourage talented individuals from pursuing these challenging roles or drive them to seek opportunities in countries without such restrictions.
Furthermore, salary caps fail to address the root causes of income inequality. The disparity in earnings often stems from structural factors like education access, technological automation, and globalization. Simply restricting executive pay would not meaningfully improve conditions for lower-income workers or create more economic opportunities. A more effective approach would be investing in education, skills training, and policies that enhance social mobility.
However, there are legitimate concerns about excessive executive compensation that can be addressed through other means. Enhanced corporate governance, increased transparency in compensation practices, and stronger shareholder rights could help ensure CEO pay remains reasonable while preserving market incentives. Additionally, progressive taxation and robust social programs can help redistribute wealth more effectively than arbitrary salary limits.
In conclusion, while income inequality deserves serious attention, CEO salary caps represent an oversimplified solution that could harm economic dynamism. The focus should instead be on comprehensive policies that promote sustainable growth while ensuring opportunities for all members of society.
Model Essay 2 (Band 6.5)
Income inequality is a big problem in many countries today, and some people think putting limits on CEO salaries can help solve this issue. However, I disagree with this idea because it has many problems.
First, CEOs have important jobs that need high pay. They must make big decisions for their companies and work very hard. If we limit their salaries, good leaders might not want these jobs anymore. This could make companies less successful and hurt the economy.
Second, salary caps might not help poor people. Even if CEOs get less money, this doesn’t mean other workers will get more. The main problem is that many people don’t have good education or skills for high-paying jobs. We should focus on helping people get better jobs instead of just cutting CEO pay.
However, some CEOs do get too much money, and this can be unfair. Companies should be more careful about how much they pay leaders. Also, governments can use taxes to take more money from rich people and help poor people.
In conclusion, I think putting limits on CEO salaries is not a good solution. We need better ways to help poor people and make society more fair.
Analysis of Band Scores
Band 8.5 Essay Features:
- Sophisticated vocabulary and complex structures
- Clear, logical progression of ideas
- Well-developed arguments with specific examples
- Cohesive devices used naturally
- Academic tone throughout
Band 6.5 Essay Features:
- Basic but clear arguments
- Simpler vocabulary and grammar
- Less sophisticated development
- Some repetition in ideas
- More informal tone at times
Key Vocabulary to Remember
- Executive compensation (n) /ɪɡˈzekjʊtɪv kɒmpenˈseɪʃən/ – payment and benefits for top managers
- Income disparity (n) /ˈɪnkʌm dɪˈspærəti/ – difference in earnings between groups
- Corporate governance (n) /ˈkɔːpərət ˈɡʌvənəns/ – system of rules for managing companies
- Counterproductive (adj) /ˌkaʊntəprəˈdʌktɪv/ – having opposite effect to what is intended
- Structural factors (n) /ˈstrʌktʃərəl ˈfæktəz/ – fundamental elements affecting a situation
- Social mobility (n) /ˈsəʊʃəl məˈbɪləti/ – ability to move between social classes
- Arbitrary (adj) /ˈɑːbɪtrəri/ – based on random choice rather than reason
For practice, try writing your own essay on this alternative prompt:
“Should governments regulate the ratio between highest and lowest salaries within companies? Discuss both views and give your opinion.”
Share your practice essays in the comments for feedback and discussion.