Chief executive officer (CEO) compensation is a hot-button issue around the world, one that is receiving increasing attention from executives, shareholders, reporters, activists and regulators. These trusts typically contract out most of their labor to property management companies. The tiniest jump in the value of Dish stock means far more to Ergen than a few extra million in annual pay. Staff Pick: Brian Wakamo's piece on how progressive ballot measures are popular all across the country, including i… https://t.co/Q4R9qfvCTl, Inequality.org is a project of the Institute for Policy Studies, Content licensed under a Creative Commons 3.0 License, In Arizona, a Progressive Ballot Victory Exposes the Inequitable Federal Treatment of State and Local Taxes, Inequality in America: Far Beyond Extreme. Median $63,000. We have CEOs whose 2017 pay dropped significantly from their normal annual levels. Over at J.B. Hunt Transport Services, another low-ratio enterprise according to the new data for 2017, CEO John Roberts only grabbed $859,000 last year, just 15 times the pay of the median J.B. Hunt worker. Which means this is a good time to point out a few plusses and minuses of this data. CEO Warren Buffet, $100,000. In fact, Richard Fahn, the CEO of Royal Caribbean Cruises, has the lowest pay ratio on our visualization at $728. Listing companies with the highest average salary makes for an interesting read, but I always wondered how the average worker pay compared to the CEO's pay in that same company. The concentration of America's wealth has gone into overdrive. But not all major corporations are reporting ratios at anywhere near these stratospheric levels. I soon learned it's not as easy as that, however. (As one might expect, in most of these … Public access to pay ratio data also puts another spotlight on ever-escalating CEO pay in general, which means more healthy skepticism and pushback on CEO pay--on many fronts. Here's what to take from the new data. So why do some S&P 500 companies have low ratios? Informed commentary on inequality, including the Conference Board’s recent paper, “Tackling Economic Inequality, Boosting Opportunity: A Blueprint for Business,” cites globalization and technological advancement (e.g., office and manufacturing automation) as two driving forces of the recent increase in income inequality in the US. The ratio is up from 120-to-1 in 2000, 42-to-1 in 1980 and 20-to-1 in 1950. But that ratio significantly understates the inequality a company like HCP can generate, as we can see from a close reading of the 2017 HCP annual report. A recent survey of 356 public companies by Equilar, an executive compensation and governance research firm, found that the median CEO pay ratio was 140 to 1. And this growing power at the top has been driving the growth of inequality in our country. According to the AFL-CIO, this is important because this data "shows which companies are investing in their workforce to create high-wage jobs.". Overall, 13 S&P 500 companies have so far reported CEO-median worker ratios of 52-to-1 or less. ... (TDC) was in the lowest third of all the S&P 500 CEO pay packages. Their actual employee workforces tend to be small, highly educated, and highly paid. Companies have some discretion over what numbers are used to calculate the pay ratios. We have quickly learned just how obscenely wide pay gaps between CEOs and average workers can stretch. Importantly, rising CEO pay does not reflect rising value of skills, but rather CEOs’ use of their power to set their own pay. The ratio of CEO-to-worker pay has increased 1,000 percent since 1950, according to data from Bloomberg. I smell more pressure on CEO pay just around the corner. Given that most of us know Warren Buffett is one of the three richest people in the world, it surprised me his company appeared at the top of the list, at first. At Amazon, CEO Jeff Bezos' compensation of $1.68 million in 2018 was a modest 58 times that earned by the median Amazon employee globally, who earned $28,836 (the median pay … Median $157,000. Our list of low-ratio firms includes two utility holding companies. Median $92,000. CEO Marc Benioff, $4.7 million. CEO Gary Guthart, $5 million. The Religious Society of Friends (Quakers)xviiihas a pay policy which commits them to ensuring that there is no more than a 4:1 ratio between the mid-point of the lowest and highest grade of their pay band. Additionally, research shows that the average American thinks the pay ratio is 30:1 when the average is actually closer to 300:1. 33:1 ratio. 37:1 ratio. Practically all of Warren Buffett’s $85 billion net worth consists of his just over 17 percent ownership stake in the company. companies with the highest average salary. Traditions in different countries, along with laws and guidance from government agencies, have led to differing CEO-to-worker pay ratios by country. Overall, the pay ratio numbers were lower than forecasted, with an average of 144:1 and median of 69. It says the real pay ratios are likely to be higher than those reported because 25% of workers are earning less than the lower quartile threshold. Thus, access to this data could have the unintended effect of further escalating CEO pay to attract or retain the best top executives. Berkshire Hathaway. Barclays, Lloyds and RBS declined to comment. to the bottom salaries. In the case of CSX, which had two CEO's in the same year, they based the pay ratio off the prior CEO's salary (not listed above) which netted a better ratio. NOTE: For companies with more than one CEO during the year, the highest-paid CEO is included in the database. The corporate cultures at the 13 companies appear to be just as greed-driven as the cultures at corporations where CEOs make hundreds of times the wage of their most typical workers. It is a measure of wage dispersion.. They enjoy special tax or regulatory treatment. Some pundits have even said that while "average workers" benefit from salary comparisons, so can CEO's. So that 15-to-1 ratio reported for 2017 appears more than a little misleading. Last year, CEO pay at an S&P 500 Index firm soared to an average … Kartsotis again refused all forms of compensation for fiscal 2014. The lowest CEO pay ratio was zero at Fossil, whose CEO Kosta Kartsotis reported $0 compensation in 2014. Employees there enjoy store discounts and other perks, but the median pay is among the lowest of any major corporation, … The average pay ratio of CEO to median worker was 204-to-1, the report found. A new SEC ruling forces companies to provide the pay ratio between CEO and median employee salary. The bottom line? 54:1 ratio. The commitment of executives is clear as well, as the pay ratio of W. Craig Jelinek, Costco's CEO, to his median employee's salary is far below that of some of his peers. I, for one, am all for the transparency, even if most of the ratios make me lose my rations. 30:1 ratio. Median $168,000. Median $181,000. The amount of money paid out to … Median $180,000. 2:1 ratio. Median $106,000. Pay ratio between CEO pay and median employee pay are displayed as disclosed by each company’s proxy statement. Today, the SEC proposed a rule to require companies to report that ratio every year. 27:1 ratio. CEO Patricia Poppe, $6.9 million. Median $57,000. While Japan maintains a relatively low CEO-to-worker pay ratio, the average American CEO now earns 319 times as much as the average American worker. Beyond employee satisfaction, companies with high CEO-to-worker pay ratios also had lower shareholder returns over a five-year period compared to companies with low CEO-to-worker pay ratios, according to a CtW Investment Group study of S&P 500 companies. Our research found very little correlation between CEO tenure and pay ratio, however, as the average CEO tenure is fairly consistent across all companies. Today Fortune 500 CEOs make 204 times regular workers on average, Bloomberg found. job, the higher the ratio might be, as CEO pay tends to rise over time. In 2016, HCP also paid a large severance package to a departing CEO. Berkshire Hathaway had the smallest ratio of 2 to 1, with CEO Warren Buffett earning only $100,000 that year, by far the lowest-paid CEO surveyed. Take Berkshire Hathaway, for example. Median $120,000. CEO Harris Simmons, $3.4 million. The pay gap between top executives and workers continues to be wide. At the top of the list, four CEOs earn more than 1,000 times the salary of their median worker. Now, I know. Ben & Jerry's once, admirably, had a 5 to 1 rule limiting the pay of its CEO -- $81,000 -- to the company's lowest paid worker. With a new SEC ruling, public companies are now required to disclose what the pay ratio is between the CEO and the average worker. 53:1 ratio. HR officials everywhere fret that public access to median pay salaries will over-sensitize workers and create many salary-dispute nightmares. Since then, however, CEO pay has recovered smartly—Mishel and Schieder project2 that the CEO-to-worker pay ratio reached 312-to-1 in 2017.3 In 2017, the average level of pay for CEOs in the 350 largest firms was $18.9 million. This new information can also be used in other ways. Over at J.B. Hunt Transport Services, another low-ratio enterprise according to the new data for 2017, CEO John Roberts only grabbed $859,000 last year, just 15 times the pay of the median J.B. Hunt worker. CEO Mark Zuckerberg, $8.9 million. 53:1 ratio. Ditto for Dish Network Corporation chairman Charles Ergen. All of this, Clifford believes, harms American industry and curbs economic growth. They can include employees of subsidiaries or contractors with higher pay in their figures, which artificially creates lower ratios. Median $105,000. Do they indicate that we have a significant chunk of Corporate America that rejects the avarice that so pervades American society? Companies with the lowest pay ratios (under 35) have CEOs with average tenure at 7.5 years, while those on the In 2017, Ergen pulled down $2.4 million in compensation, a pittance compared to the typical take-home of his fellow corporate chief execs. See contact details below. Other companies on our low-ratio list also have atypically small worker populations. Median $47,000. The low ratios at these 13 companies do not in any way reflect a rejection of standard-issue corporate avarice. Do these low pay ratios give us cause for hope? Access to median pay data is useful for prospective job seekers or switchers and helps keep pay competitive (transparency is a good thing for setting wages). 41:1 ratio. CEO to median employee pay ratios at rival FTSE 100 lenders Royal Bank of Scotland and Barclays were not too far behind, at 97:1 and 96:1 respectively. Some enterprises are reporting 2017 pay ratios that seem, especially by comparison, almost reasonable — or even astonishingly low. Nearly half don’t at all resemble typical publicly traded corporations. Given that most of us … It compared CEOs’ pay with the annual equivalent of the national minimum wage and found the median CEO/low paid worker ratio is in fact 253:1 for FTSE 100 firms and 133:1 for FTSE 350 organisations. In … But Roberts had been grabbing annual pay packages in the $5 million range before last year, and earlier this year, in January, the company granted Roberts additional shares valued at $4,877,428. 54:1 ratio. Some states, for instance, have regulatory limitations on how much top utility executives can make. The average American's pay and benefits have been growing at the slowest pace in 33 years, according to the Washington Post, while CEO pay soars, and that's a good thing. The Trump 2017 tax act penalizes states that tax income responsibly. HCP CEO Thomas Herzog, according to the new pay-ratio disclosures, took home $7.3 million in 2017, 40 times more than that median worker. This report notes that HCP expects to record charges of $9 million for severance pay and other items related to the previously announced departure of HCP executive chairman Mike McKee, who had served as the company’s CEO before Herzog. There were quite a few cases where the ratio was at or near zero, which were outliers in cases where the CEOs either declined to receive pay or were paid a nominal sum. The industry with the highest average ratio of CEO to worker pay was the consumer discretionary industry with a ratio of 977:1. Median $155,000. What about the other companies on our low-ratio list? Institute for Policy Studies associate fellow Bob Lord practices tax law in Phoenix. Chief executive officers (CEOs) of the largest firms in the U.S. earn far more today than they did in the mid-1990s and many times what they earned in the 1960s or late 1970s. Median $82,000. CEO Patricia Kampling, $6.5 million. Auto parts maker Aptiv reported a 2,264 to 1 CEO-to-worker pay ratio. But Ergen owns 41.2 percent of the equity in Dish. But overall he gets paid more than 9 other chief executives on the list. But it … But then I didn't know he only collected a CEO salary of $100,000, nor did I know the average worker at Berkshire makes "only" $54,000, both of which skews the ratio tremendously. Pay Tracker: Comparing CEO pay in the FTSE 100 with average pay and low pay in the UK Our brand new Pay Tracker report reveals that CEOs in the UK’s top 100 companies now pocket an average of £5.3m each year, or 386 times that of a worker earning the National Living Wage. Sift through the list of corporations with low CEO-to-worker pay ratios and you’ll find nothing that contradicts the stark reality — reflected in the pay ratios of the great majority of publicly traded corporations — of a horrifically unequal society where those at the top nearly always earn more in a single week than their workers earn over the course of an entire year. One example: Berkshire Hathaway CEO Warren Buffett’s modest $100,000 salary only doubles the pay of his company’s median worker. 32:1 ratio. Kohl’s CEO Kevin Mansell, for instance, last year drew compensation equal to 1,264 times the median wage of Kohl’s workers. CEO Thomas Herzog, $7.3 million. ET Correction (09/24/2018): Due to data parsing errors and dual-class shares, a previous version of this graphic computed incorrect median and lowest CEO pay ratios… Median $54,000. 4) About One Society & LVSC Some 20 major companies have revealed CEO-median worker pay gaps over 1,000 to 1. This year, for the first time ever, publicly traded corporations in the United States must disclose the ratio between what they pay their CEOs and what they pay their median — most typical — workers. CEO E. Hunter Harrison, $151 million. In each low-ratio case, we can point to a unique reason that has nothing to do with an egalitarian sensibility. Several companies pay their CEOs well over 1,000 times as much as the average worker. Many companies pushed back on the original SEC ruling because gathering the data can be much trickier and more labor-intensive than it would appear. CEO Susan Story, $4.4 million. Companies must now disclose the ratio of pay between the CEO and the company’s median employee, shining a brighter light on how high CEO pay has become. 2:1 ratio. Sign up for our weekly newsletter- the latest horror, humor, and hope around economic inequality in your inbox every Monday. As noted in Fossil’s SEC filing, “Mr. CEO Joseph Hamrock, $5.4 million. The median pay at HCP, one of the real estate investment trusts on our list, stood at $181,076 in 2017. CEO Conor Flynn pay of $5.6 million vs. median pay of $99,000 = 56:1 ratio. The disclosures reported so far have been eye-popping. Median $104,000. Median $240,000. 35:1 ratio. Working for the Man—literally All of the companies included in our analysis have male CEOs. We have CEOs at companies that face special tax or regulatory treatment. CEO Neal Patterson, $4.6 million. CEO Charles Ergen, $2.4 million. 54:1 ratio. As of 2011, the average CEO was paid 230 times the salary of an average worker at his company. HCP’s executive compensation package apparently includes a healthy severance bonus that’s not reflected in its CEO pay package in any given year. In the 1950s, a typical CEO made 20 times the salary of his or her average worker. CEO D. James Bidzos, $9 million. ... a pay ratio of 763 to 1, with the CEO paid $8.9 million compared to a median employee salary … First, on to a report by howmuch.net that reveals the top 20 best ratios (built from raw data from the AFL-CIO). CEO Steven Kean, $382,000. In economics, the wage ratio refers to the ratio of the top salaries in a group (company, city, country, etc.) So we end up with several unique reasons that explain the low CEO-worker pay ratios of the companies on our low-ratio list. Median $54,000. Two of the other companies on the list qualify as real estate investment trusts. CEO James Risoleo, $6.2 million. However, overall CEO compensation does not exactly follow the ratio. 53:1 ratio. Amazon CEO Jeff Bezos has had the same ‘low salary’ for decades, a little more than double the median U.S. employee’s pay Published: April 17, 2020 at 7:18 a.m. CEO Warren Buffet, $100,000. While both phenomena have made material goods more affordable for US consumers, they have also resulted in wage growth that lags the growth in productivity for those worker… This site lists pay ratios released for S&P 500 and Russell 1000 companies, tracks them on a graph divided by industry, and provides shortcuts to the lowest, median, and highest pay ratios released so far. We are keen to hear examples of good practice. Any salary Buffett pays himself would be trivial compared to what he can pull in from even a miniscule upward movement in Berkshire Hathaway’s share price. Average CEO pay at the 3,000 largest U.S. companies is $3.5 million, including stock options and bonuses, according to the Corporate Library, a research group. CEO: Median Worker Annual Pay (Cash) CEO Annual Pay (Cash) Pay Ratio (Cash) Total CEO … What does all this mean? Median $70,000. Access to CEO versus median pay ratio data highlights disproportionate discrepancies and can give (in some cases) consumers/customers another discerning factor on where to spend their money. There has been a resurgence for the importance of equitable wage ratio. CEO Nigel Travis’ 2017 compensation was $5.3 million, while the median employee pay during the same period was $110,471. They also earn far more than the typical worker, and their pay has grown much more rapidly. CEO John Roberts, $859,000. For every 0.1 percent bump up in that share price, Buffett’s net worth rises an astounding $830 million. Do they signal a meaningful countertrend against excessive CEO compensation? This year will see Roberts back at his $5 million level, about 100 times what his typical workers are making. Over at J.B. Hunt Transport Services, another low-ratio enterprise according to the new data for 2017, CEO John Roberts only grabbed $859,000 last … In other words, we actually do have some major corporations whose top execs do not make more in one week than their workers make in one year. 52:1 ratio. We have corporations with small, highly paid workforces. The biggest gap was at media company Discovery Communications, where CEO David Zaslav earned $156.1 million last year, nearly 1,951 times the firm's median salary of $80,000. I'll start with number 20 and build to number 1, which is a surprise. While anyone could look up CEO pay before the SEC ruling, now anyone can look up any S&P 500 company and see the average workers pay and thus the pay ratio. 15:1 ratio. CEO Terry Spencer, $5.6 million. CEO: Fran Horowitz CEO pay: $10,262,749 (2017) Median worker pay: $2,991 CEO/median worker pay ratio: 3,431:1 Fran Horowitz served in a variety of executive roles at Abercrombie & Fitch, including Hollister brand president, before taking over as CEO in 2017. Disney's Robert Iger highest-paid CEO making over $65 million in 2018, while Amazon CEO Jeff Bezos made the least (a paltry $1.6 million). 40:1 ratio. Median $172,000. You know, chump change. We have CEOs whose upside potential from stock ownership renders their actual annual compensation practically meaningless. The maldistribution of America’s income and wealth has reached levels that our conventional economic stats have trouble revealing. 51:1 ratio. Median $99,000. CEO Steven Johnston, $5 million. 4:1 ratio. Note: average worker (median) pay is rounded in each case for simplicity.