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2018-12-10
CEOs made 20 times their median employee's salary in 1965. As of 2017, at America's largest companies, that multiple has jumped up to a shocking 312.
And, at many companies, the CEO-to-worker compensation ratio is even higher. The CEO of McDonald's earned 3,101 times the median worker in 2017 ($21,761,052 versus $7,017). That's partially because McDonald's employs workers all over the world, where the cost of living is often lower than the US.
But another reason for the jump in CEO compensation is a new perspective on how company earnings should be distributed. For the past few decades, as The New York Times reported, the majority of corporate profits have been going to corporate investors and chief executives, whose compensation is often based on stocks, or foreign mergers and acquisitions.
Meanwhile, proposals to up worker compensation are met with resistance from major shareholders. When American Airlines announced last year they would be giving raises to pilots and flight attendants, the company's stock tanked by 5.2% in one day.
In 2018, the public finally got to understand just how much more CEOs are paid than their workers. The Dodd-Frank Act of 2010 requires, among other provisions, companies to disclose their company's CEO-to-worker compensation ratio. That part of the law came into effect this year.
Here are 15 major employers and how their CEO's salary compares to their global median employee, ranked from the smallest difference to the biggest:
Rachel is a senior features reporter at Business Insider.Rachel has reported on Bon Appétit's culture of racism, safety concerns among pilots who fly for Amazon, and the 2019 trucking "bloodbath." She has appeared on ABC News, NBC Nightly News, The Today Show, France24, and other major outlets to discuss her coverage.She was a Stigler Center Journalist-in-Residence at the University of Chicago Booth School of Business in the spring of 2019.Before joining Business Insider, she was a journalist in Seoul, South Korea. Her articles were published in The Washington Post, Forbes, Foreign Policy, The Ringer, Quartz, CityLab, Business of Fashion, The Verge, and others. She's also published research on the Korean and Japanese economies in SAGE Business Researcher, a business school textbook. Originally from Metro Detroit, Rachel studied history at the University of Michigan, Ann Arbor. Her Twitter account is @rrpre. If you'd like to get in touch with Rachel, please email her at rpremack@jkmperu.com or rpremack@protonmail.com.
