Sometimes it’s difficult to put the extremely high pay of today’s Wall Street CEOs into perspective. It’s simply hard to imagine tens of millions or hundreds of millions of dollars when you have no personal experience with it. Luckily, the folks at the personal finance website NerdWallet have done the math and produced some startling statistics and graphics to help us put the gap between CEO pay and average worker pay in perspective.
2013 CEO Compensation
The median compensation for a CEO at the ten companies who paid their CEO the most was $7,334,000. Starbucks Corporation (NASDAQ:SBUX) had the highest-paid CEO in 2013, forking out a total compensation package of $9,637,000. McDonald’s Corporation (NYSE:MCD) was right behind, paying their former CEO upwards of $9 million from June 2011 to June 2012. The lowest-paid CEO on the top 10 list (Best Buy) took home a total compensation of $6,517,000 in 2013.
Hourly CEO compensation comparison
NerdWallet broke down the CEO compensation per hour and compared it to the average sales associate compensation per hour and created a chart reflecting the almost comical disparity. Hourly CEO compensation was determined by dividing each chief executive’s total compensation (per the company’s annual report) by 60 hours a week times 50 weeks per year. Sales associates’ pay data was taken from Glassdoor.com.
When you do the math, it turns out that the average CEO on this list enjoys an hourly compensation 874 times that of an average sales associate. The CEO to sales associate pay multiple was the highest at McDonald’s Corporation (NYSE:MCD), where it turns out the boss makes an astounding 1,196 times what an average sales associate makes. The lowest multiple was at AT&T Inc. (NYSE:T), where it turns out the CEO only makes 558 times the compensation of the average sales associate (mainly because of significantly higher pay for sales associates).
Sales associates’ overtime pay
NerdWallet also pointed out one more eye-popping statistic. It would take the average sales associate at a company on this list a full 40-hour week and an additional 466 hours of overtime pay (1.5 times regular pay) to equal the average pay received by a CEO on this list in just one hour.
In light of the negative media coverage, some companies have begun to reconsider their executive compensation plans, and a few have introduced reforms, including switching to performance-based pay.
