Fortune 50 CEO-to-Worker Pay Ratios Methodology
This list covers the top 50 Fortune 500 companies that are publicly traded and have greater than 5,000 employees.
Definitions:
Company Rank:
Rank on the list of the Fortune 500 Companies from 2011 (http://money.cnn.com/magazines/fortune/fortune500/2011/full_list/).
Profits:
2010 reported company profits as listed by CNNMoney (http://money.cnn.com/magazines/fortune/fortune500/2011/full_list/).
CEO:
Chief Executive Officer of the company found from either Forbes list of top 500 paid CEO's (http://www.forbes.com/lists/2011/12/ceo-compensation-11_rank.html) or from (http://people.forbes.com).
CEO Degree:
This is the highest degree that each CEO has earned. Company Size (by employees):
This is the most current number of employees that work for each company, according to www.Hoovers.com. For most companies, this reflects the number of employees through 2010.
CEO's Annual Cash Compensation:
1 year pay found from the Forbes list of top 500 paid CEO's (http://www.forbes.com/lists/2011/12/ceo-compensation-11_rank.html) and described as below from their website:
- We count compensation when it turns into cash or marketable stock; we do not include the value of options until the executive exercises them. When calculating a chief executive's total compensation for the fiscal year we count the following: salary and cash bonuses; other compensation, such as vested stock grants; and stock gains, the value realized by exercised stock options. We collected the latest available compensation figures reported in companies proxies filed by March 25, 2011.
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Salary: Annual base salary earned during the fiscal year.
- Bonus: Annual non-equity incentives earned during the fiscal year, and discretionary bonuses.
- Other: Includes long-term non-equity incentive payouts, the value realized from vesting of restricted stock and performance shares. Also includes other executive personal benefits, such as premiums for supplemental life insurance, annual medical examinations, tax preparation and financial counseling fees, club memberships, security services and the use of corporate aircraft.
- Stock gains: Value realized during the fiscal year by exercising vested options granted in previous years. The gain is the difference between the stock price on the date of exercise and the exercise price of the option.
* In this list Steve Jobs was still listed as the CEO of Apple so we found the compensation for Timothy Cook from ( http://people.forbes.com/profile/timothy-d-cook/6607) and used Salary+Bonus+All Other Compensation.
Median Pay for Typical Full Time Worker in the Company:
This is the 50th percentile of total cash compensation (including base salary or base hourly wage, bonuses, profit sharing, commissions, tips and overtime, where applicable) for all full time workers in the PayScale database that either work for the company listed or for one of their subsidiaries.
Ratio of CEO Pay to Typical Employee:
This is ratio of pay for the company's Chief Executive Officer over the Median Pay for a Typical Full Time Worker in the Company.
Typical Degree for Full Time Worker in the Company:
This is the typical degree for full-time workers in a given company. Workers that typically have less than a bachelor's degree tend to be in retail positions such as sales associate or retail store manager.
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