Who Earns Most? Ratio of Pay CEO-to-Worker
By Bridget Quigg, PayScale.com
How much do certain CEOs make compared to the employees at their companies? A lot. Many earn hundreds, even thousands, of times more than their typical employee.
Online salary database PayScale.com researched the total cash compensation for CEOs of the top 50 companies on Fortune’s exclusive 500 list. Then, PayScale calculated the median annual earnings for workers at those companies and came up with a ratio of CEO to typical worker's pay and created an infographic showing the results. Spoiler alert: Prepare to be shocked.
See the full infographic by clicking on the image below.
Highest Pay Ratio
Stephen J. Hemsley of UnitedHealth Group brings home $1,731 for every dollar a typical employee at his company earns. Wal-Mart CEO Michael T. Duke sits far behind him with a 713 to one ratio. And, Ivan G. Seidenburg of Verizon Communications comes in third at 613 to one.
Do you earn about $10 per hour? Can you imagine earning $6,130 per hour instead? That is what is happening in Verizon’s corner office. At UnitedHealthGroup, it’s more like $17,310 per hour. With a boost in earnings like that, you could afford to buy a Hyundai Elantra GT 4 door hatchback every hour (MSRP $15,389).
Lowest Pay Ratio
Not all leaders take in cash at the same rate. In fact, Warren Buffet of Berkshire Hathaway earns a humble $10 for every dollar of typical median income earned by his employees.
Microsoft Corp. stands out as a profitable company that pays its employees well. Microsoft boasts the highest typical median pay for full time employees, the fourth highest annual profits, and the 48th highest paid CEO on the list (Steven A. Ballmer) with a ratio of 13 to one.
And, had he lived long enough to still be leading the company he so carefully built, Steve Jobs would have outdone them all, earning his lowly $1 per year salary.
In the Red
Finally, we have organizations where, not only are the CEOs earning much more than their company's typical worker, their companies aren't doing so well.
Fannie Mae, Freddie Mac and Bank of America all made it into Fortune's top 50 but none are profitable.
In better news, workers at Fannie Mae and Freddie Mac make high wages overall so their CEO to typical worker pay ratios aren’t too shabby. Fannie Mae’s is at 66 to one and Freddie Mac’s is at 52 to one.
But who is out-earning their peers the most, without bringing home the bacon? The CEO of Bank of America brought home $6,450,000 in cash earnings last year and, that was 144 times of what the typical Bank of America worker earned. Meanwhile, the company was over-budget by $2,238,00,000.
CEO Pay in Perspective
It’s hard for most workers to relate to earning thousands in minutes, as some CEO’s do. Do they work that much harder to deserve all of that high income? We’ll let you decide. Leave a comment below and let us know what you think.
* For more information, see PayScale's methodology for the "CEO Pay in Perspective" infographic.