J.P. Morgan and the “20-to-1 Rule” for Pay Equity

The Claim:

J.P. Morgan — the powerful American banker and industrialist — is famously quoted as saying that no executive should earn more than 20 times what their lowest-paid worker earns.

Core Idea:

  • Morgan believed excessive pay differentials were bad for morale, loyalty, and business integrity.

  • Workers would not respect leaders who enriched themselves too much.

  • A 20:1 ratio was, in his view, a natural upper limit for what felt “just” within a company.

❝No man should be paid more than 20 times what the lowest-paid man in the company receives.❞
(Attributed to J.P. Morgan — though no direct written source confirms the exact quote.)

Historical Context:

  • This view reflected a paternalist capitalism, where capitalists saw themselves as moral stewards.

  • Morgan preferred stability, hierarchy, and harmony in the firm — not the raw inequality of modern shareholder capitalism.

Today’s Relevance:

  • In 1965, CEO-to-worker pay ratio in the U.S. was around 20:1.

  • As of the 2020s, that ratio often exceeds 300:1 in major corporations.