After years of kicking and screaming, corporate executives have finally released pay data on what their CEO makes versus their median worker.
Unsurprisingly, the gap is obscene. The average chief executive of an S&P 500 company earned 287 times more than their median employee last year, according to an analysis of the new federal data released Tuesday by the AFL-CIO labor federation. America’s CEOs earned a staggering $14.5 million in 2018, on average, compared to the average $39,888 that rank-and-file workers made. And CEOs got a $500,000 bump compared to the previous year, while the average US worker barely got more than $1,000.
This is the first year in which all public companies were required to disclose CEO-to-workers pay ratios in filings with the US Securities and Exchange Commission. Before, companies only needed to report compensation for their top executives.
The new disclosures — largely opposed by corporate America — are part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The purpose is to provide shareholders with more information to judge corporate behavior — and to shame executives for their excessive pay.
Chief executives at America’s largest companies don’t get paid the way the average worker does. Beyond a set salary, CEOs’ compensation packages include other forms of income, such as bonuses, company stock options, and long-term incentive payouts, which can vary based on performance and the status of the stock market.
The new analysis relies on the most conservative measure of CEO pay, based on the value of stock options when they were awarded to executives, not when they were cashed out.
Companies that rely on low-wage, part-time workers were among those with the largest pay disparities. Tesla had the most shocking one: Elon Musk made 40,668 times more money than the median Tesla employee. Among the largest US companies, the clothing brand Gap had the largest disparity. CEO Arthur Peck made 3,566 times more than the median company employee, who only made about $5,800. McDonald’s, Foot Locker, and Estee Lauder reported jaw-dropping pay gaps, too.
Source: Vox.com
