CEO pay blows up average workers’ wages
If one of your fantasies is to take a tractor-trailer home and throw a giant mountain of cash on your lawn, you should consider becoming the CEO of a large corporation. Recent data released by the AFL-CIO covered CEO pay rates from 2020 to 2021 and compared them to the median salary of employees working at the same company, and the differences are staggering.
The AFL-CIO is a pro-union lobby, so its motivation behind compiling this data is definitely pro-worker. But even so, the result is quite glaring. While numbers vary across industry sectors, some aggregate calculations show S&P 500 CEOs earned average salaries of around $ 15.5 million last year, more than 300 times the scale. wages of their own workers.
According to the data, the biggest gap is in the consumer discretionary sector, which includes the retail operations of Amazon, Nike and McDonald’s. On average, the salary of CEOs in this industry was 741 times that of their average worker. Consumer Staples ranked second on the list, just over half the gap in Consumer Discretionary, with CEOs earning an average of 383 times more than their average employee. In case you were wondering, the consumer discretionary sector covers companies that sell non-essential goods (like a huge chunk of what Amazon offers, sneakers or Big Macs). Consumer Staples refers to daily necessities, which is the category that S&P analysts have delegated Proctor & Gamble and Coca-Cola to. Personally, I don’t need a Coke every day, but I might be weird.
The healthcare industry was also a violator of the median CEO-to-employee pay ratio, but it had the lowest number of the top five, with its CEOs only making 253 times more than their average employee. And when it comes to technology, communications services and information technology each ranked in the top five with ratios of 334: 1 and 315: 1, respectively. But that doesn’t quite let tech companies off the hook in terms of CEO pay sin.
Dublin-based Aptiv Plc had the second-highest pay difference of any company in the S&P 500, with its undoubtedly smiling CEO Kevin Clark making $ 31,267,329 in 2020, or 5,294 times what its worker average won the same year. Only Abercrombie & Fitch had a larger spread, at 6,565: 1.
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The third biggest gap was also a technology company, namely Western Digital. Its CEO, David Goeckeler, raised $ 35,723,376 in 2020, which puts it at 4,934 times more than its median employees. In contrast, Tim Cook’s Apple income of $ 14,769,259 and Microsoft’s Satya Nadella income of $ 44,321,788 put them at just 256: 1 and 257: 1, respectively.
Do CEOs Really Work Hard Enough To Earn These Exorbitant Salaries? I guess it depends on how you define the words “earn” and “work”. But on the upside, someone has to keep the superyacht industry going.