Bloomberg publishes CEO-to-employee-pay chart

Alan sez, "Bloomberg got tired of waiting for the SEC to implement its own rule requiring disclosure of data on how many times the median salary the CEO makes for publicly traded companies so they did a little sleuthing of public data and a little averaging math and calculated the ratio for the top 250 of the S&P 500 companies. The data are searchable and sortable and there's space for companies to comment, which quite a few have done. To my surprise Oracle is not #1, though it is the only tech firm in the top 10."

Top CEO Pay Ratios (Thanks, Alan!)


    1. With a net worth of 10 billion he laughed at working stiff CEOs and their pocket-change compensation packages.

        1. You don’t get to be in Steve Jobs’ position by enjoying leisure time.

          Ironic that people we give the big bucks are the people who don’t really have a use for it aside from keeping score.

          1. You mean in terms of salaries? Otherwise I can point you at a few few oligarchs, sheiks, heirs who made (and make) tons of money and enojoy it.

            Also, Steve Jobs may not have had the time, but he knew how to spend his money for fun.  Look as as cars, his clothing, his yacht. 

    2.  No, not right. Jobs took a dollar in salary…but many millions of dollars in perks (executive jet at his personal disposal for one example) and stock options (which contrary to popular perception do have a cost for the company.) What you need to look at it total compensation (as is almost surely reflected in these charts of CEO pay), not just “salary.”

      1. When I reloaded again it flashed “3” for a second and then back to 47 or whatever.  Not a big deal but I did click thinking there’d be a discussion to read.

  1. Oracle doesn’t have as many low paid employees as say JCP which has tons of minimum wage earners (or at least close).

    1. Of course, JCP has performed like a one-legged ass kicker for a decade, which one might think should have some negative impact on the CEO’s pay that would be reflected in the ratio. I would think you could pay someone $600,000 or $700,000 to destroy the remainder of JCP instead of $53M.

      1. They have it written into their contracts, that no matter what happens to the company under their leadership, they still get paid what was contractually agreed.

  2. And it looks like the janitorial and food serving service contractors making near minimum wage are not counted as employees.

    1.  Likely caused by outsourcing.  Since they aren’t direct employees, they aren’t included.  This allows companies to have as many minimum wagers with no job security as they need, without it directly reflecting on them.

    2. The column says ‘average employee pay + benefits’.  There are no benefits.

  3. The important thing is to teach our children how the real world works by immediately cutting their allowance and keep the money ourselves, list it as “Home CEO Bonus.”

  4. What I take away from this is that Wynn and HR Block were the only only companies that bothered to provide real numbers to correct the math in their company statement instead of using it as an advertising spin opportunity and that it sucks to work at Tiffany’s and make nothing while most everyone coming into your store is willing to spend a good portion of your annual paycheck on one object.

  5. Interesting, but some more interesting numbers would be CEO pay to market cap ratio for some of these companies.  

    Also, it shouldn’t be surprising that a lot of these people have the same name as the companies the control.  Among those with the highest ratios are probably some people who would prefer to take their pay as salary than as stock dividend, since salaries are taxed once (income tax), but dividends are taxed twice (corporate tax + capital gains).  Paying CEOs with large ownership interests with large salaries is less expensive over all than paying them with dividends.  Prime examples are Ellison and Simon.

    1. Enough with the myth of “double taxation”.

      My paycheck came from a company that was taxed too, then Social Security, Medicare, etc are deducted before I saw a dime. Then I’m taxed on most of what I spend. (Whereas someone making $30 million a year is NOT spending most of what he receives on taxable items.)

      As opposed to companies like GE, Cisco, Pepsi, that paid NO corporate taxes, then the dividends paid to the CEO and major shareholders are taxed at 15%. If they don’t find a way to wiggle out of that much.
      Where’s the double taxation there?
      Remember Romney admitting that he paid “about 13%” the previous year, but nobody knows what he paid the previous decade, if anything?

      1. Double taxation is not a myth, it’s math.  I’m not trying to solicit tears for the poor CEO, but listen, these people are going to be paid, and paid well.  So do you pay them in a tax efficient manner, or do you pay them in a tax inefficient way.

        As owners of these companies, they are entitled to a share of the profits.  It is less expensive to give owners a share of the profits through compensation (such as stock options or salary) than through dividends.  Part of the reason those taxation numbers are so low is because these companies are paying out profits through compensation, rather than through dividends.  Asking them to voluntary pay more taxes makes about as much sense as Republicans telling Democrats to voluntarily pay higher taxes.

        Sorry for making an unpopular comment, but it’s not wrong.  And not believing it will not solve any problems either.  Anyway, my main point is that there are more telling ratios than this one.  

        1.  Taxation aside, are you telling me that CEOs have increased the profitability of their companies by nearly 1000 percent since the 1950s?  That’s when CEOs merely made about 50 times the average worker.

          Even the lowest ranked company on the Bloomberg list is egregious.  It’s a rigged game and has nothing to do with value of the CEO.

        2.  You’re kinda talking two different things when you say, “As owners of these companies, they are entitled to a share of the profits.”

          The CEO’s of Pepsico, etc. are not owners of the companies they run, they were hired by the executive boards of those companies.

          If you’re talking about smaller corporations that are CEO-owned, it’s still a myth that the CEO’s “double taxation” results in higher taxes.

          from SmartMoneyDaily:

          “Let’s say you earn $40,000 working a full-time job, and earn another $20,000 through your Internet business. If you weren’t incorporated (i.e. you ran your business as a sole proprietorship), the effective income tax rate on your $20,000 in business profits would be 24.7%. On top of this, you would pay 15.3% in FICA taxes — 7.65% as the employer, and 7.65% as the employee. Therefore, your total tax rate would be 40%!

          By contrast, if your business profits were sheltered under a corporation, you would pay a tax rate of just 15%. This would leave you with $17,000 after taxes to pay yourself a dividend, which would be taxed at 15% for another $2,550 in taxes. This would total $5,550 in taxes, or an effective tax rate of just 27.7% — instead of the 40% a sole proprietor would pay.”

        3. You are presenting only two possible options for payment for services rendered.

          Payment in stock, preferably common stock rather than preferred (not stock options…don’t get me started) is a great way to directly tie a CEO’s performance to the company’s health.  Not the best way — the market isn’t foolproof, so how companies are valued is not a perfect representation of their actual strength in the real marketplace — but better than a straight salary that bears no relationship to the CEO’s effect on the company.

          The CEO is responsible for choosing to go the public offering route instead of keeping the source of capital closer at hand, determining how much to offer in dividends to preferred shareholders each quarter, and how to allocate company profits in general.  They’re not sitting around waiting to see what HR decides to give them.  Subjects, not objects.

      2. Romney revealing his previous taxes would surely sink his candidacy, so he had nothing to lose by sticking to the one (edited) year. The alternative was worse.

    2. If the CEO is willing to risk some of his compensation on future performance of the company (which most CEOs are–and most shareholders want them to do anyway), long term equity grants can be more tax efficient in the long run than large cash salaries.

      But even if your double taxation explanation made sense in some scenarios, it’s not the case for either Oracle or Simon.

      Ellison’s base salary for each of 2011 and 2012 was $1 and he received no cash bonus.  Almost all of his compensation came in the form of stock options and other incentive awards.  See the Summary Compensation Table in their latest proxy statement.

      And as Simon’s spokesperson pointed out on the Bloomberg chart, it appears that Bloomberg included the entire value of a multi-year long-term incentive plan in his 2011 compensation on their chart.  According to the Total Direct Compensation Table in Simon’s latest proxy, David Simon’s total 2011 cash compensation was about $5.2 million.  He got about $5.2MM more in equity grants.  The rest of what Bloomberg reported appears to have been equity that vests over a much longer period of time and that he doesn’t get if he quits or the company performs poorly.  So it would appear that David Simon  is far from America’s most ridiculously compensated CEO (note: Oracle spent more on security for Larry Ellison’s house than Simon Property spent on David Simon’s salary).

  6. I just listened to Kenneth Feinberg: The Master of Disaster… from Commonwealth Club Radio… @Stitcher

    And a very interesting part of it was how he dealt with the Executives of the companies that got bail outs. He told stories about how these people hired consultants to prove that they were “worth” 7 million a year and how they were “irreplaceable.” They threatened to leave and go to China if they didn’t get the money. He then said how the thing people don’t realize is that to these people it’s not about how many houses they own, but that there really believe that number is tied to there sense of who they are, and if it was less, then THEY were worth less.  (Hmmm, worthless…)

    What happened? They took the cuts, they didn’t leave for China, but what they did was pay back the money to the Government so they could get out from under the thumb of the government. They actually borrowed money (probably at a higher interest rate) so they could pay off that government loan.

    Now as a taxpayer I’m glad they paid off the loan, but if I was a shareholder I would look at these loans they took out (so they could return to paying themselves millions) and wonder if they really should be using the companies money this way.

    The whole program is interesting. Give it a listen.

  7. I’d like to say the percentage of how much CEO pay rose since the recession versus employee pay.

    It’s OK though, as many of these guys obviously work a thousand times harder than their average employee… right?

  8. How much better could peoples lives be made if we just took 100 off of the ratios and paid it to the employees?

    1. Depends on the company. Most of the companies listed have tens of thousands or even hundreds of thousands of employees which means rather modest salary increases if their CEOs salaries were paid to them.

      For example JC Penny with 116K employees would get a raise of about $465/year or $0.23/hour.

      1. Not so modest for the average employee making around 20k a year. They’d probably appreciate that quite a bit. They’d probably also, you know, spend it in their communities.

      2. 1 – Math it isn’t strong with me.  Maybe I should have said 200 or 300… many of the CEOs would still be making 1000 times more.  (That should make more people sick to their stomachs).

        2 – I agree with @google-17d0d29fb3b7ff0dc1433e08bfe175fc:disqus  I highly doubt anyone would complain about making extra, and it might allow them to do things they keep putting off and make their community better. 
        I know if the CEO sent out a memo saying he was taking a pay cut in order to give everyone a raise, it would help the hell outta morale.  The impact on all of the involved people and communities would be way better than the CEO getting another BMW…

      3. As mentioned, that $465/year would likely be spent very quickly, helping out the economy overall for everyone.  Add it up across all these companies and you can see that the wealthy are leaching money out of the economy and repressing it at the same time.

  9. A few of the company comments contest Bloomberg’s figures for employee compensation, saying it’s actually higher or that it doesn’t account for their excellent benefit packages and so forth.

    What’s really interesting is that most of the comments don’t. They just rattle on about how their CEO compensation is “performance-based” and “competitive” or it was a one-time bonus and doesn’t count and blah blah blah and never say a word about their employees. Telling.

    1. In all seriousness, what I took away from those responses–and I read every one of them–is that NONE of them, not even the ones that did address how their employees are well paid, made the company look any better.

      • “Your methodology is flawed.” Sounds whiny and opportunistic.
      • “Our workers get twice what you say they do!” Sure they do.
      • “It’s the industry standard.” Nobody’s arguing.
      • “Most of that is deferred compensation he won’t see for years.” Yeah, but so is the next year’s bundle, and the next year’s…
      • “99% of our shareholders approved our CEO’s paycheck.” So what?
      • “Those bonuses are performance-based.” Why even bother saying this?

      And really, what could they say that would explain away a $20M pay package? So what I’ve learned from all this is how INCREDIBLY easy it is to troll corporate PR types on this subject. Every single one of those companies dumb enough to respond would have done better to write back “lol u mad bro?”

      Incidentally, I do find myself wondering what Bloomberg’s current CEO makes. The ratio-to-median-industry-salary might not be astronomically high, but I bet it’s enough in absolute terms to make your average salary earner see red.

      1. Re: “99% of our shareholders approved our CEO’s paycheck.” — Ever own stock before?  A couple times a year they send out a card asking you to vote on a few questions.  If you don’t turn in the card, you are still counted in the vote: as in favor of the board of directors position.  There’s not much risk of that turning into democracy.

        1. And most investors have signed over the responsibility of voting to their account rep anyway.  Which way do you think an account rep at Morgan Stanley, Merrill Lynch, etc. is going to vote the aggregate numbers of shares under his/her purview….with the company’s recommendations, or against them?

      2. Those replies where the most interesting part for me as well. They each show a disconnect so egregious that they almost seem like troll comments. These people live in a gilded echo chamber. I don’t think they even understood why ‘normal’ people are so offended by these numbers.

  10. I wonder what it feels like to be the corporate spokesperson tasked with justifying the CEO’s compensation, which is 500-1000 times his/her own.  I bet it burns.

    1. No. You are expected to feel just lucky to have a job, with health care. And if you buy into the world view of the people you are a spokesperson for you believe that you will be getting that kind of money soon too. You will get some 2nd tier stock options that will be underwater but SOMEDAY might be huge. Of course you aren’t going to begrudge this brilliant CEO a dime because it is your job to make it look normal. You ARE the person that Upton Sinclair talks about. Your Salary depends on you making the outrageous compensation “normal” to the media. 
      You don’t compare your CEO to the workers you compare them to OTHER CEOs who all have rigged the game. 

  11. Interesting that the number 1 CEO on the list, Ronald Johnson, has just been fired from JC Penney and replaced by his predecessor.  His policies badly damaged the company’s performance.  JC Penney is actually running ads on network television apologizing for the changes he made.

    1.  JC Penney is actually running ads on network television apologizing for the changes he made.
      Really? I don’t watch Network TV what do they say?

      1.  The ads are really vague.  They say that Penney’s recently made changes, and some of those changes people liked and some they didn’t.  But now they’ve fixed things, and they want people to come back.  When I saw the ad, I had to Google it to figure out what’s going on.

        Probably their take-away from this will be that they should have spent more on their CEO.

        1. Or perhaps they might have tried spending that money more wisely. Just a thought….

  12. It would be interesting to compare CEO salaries with wages internationally. For example, Nike would probably be much higher on the list if they included factory workers in Asia who are producing the shoes.

    1. Interesting, but I suspect that is hard to calculate as the definition of “employee” gets fuzzy. Even for completely domestic companies, often low-paying jobs are shoved off on contract laborers who get 1099s rather than W2s, and are responsible for their own taxes because they’re technically not employees. (Of course, a lot of highly paid consultants might also be getting 1099s, but it’s hard to figure out how these balance out for any given company).

      Many of the people who do the dirty work of putting together consumer goods overseas actually work for a different company who then have an exclusive supplier contract.

      I bet if we could account for these situations, the numbers would be even more stark.

  13. I feel proud that the $1B+ company I work for is not on that list. The people at the top make a lot of money but the overall distribution is much more equitable than what’s on that list.

  14. Here’s the thing – people should be able to get what they can get for their work, including tradespeople, union members, teachers, engineers and CEO’s.
    Putting aside the shocking income gap just for a second (which is bad enough) at the level of the latter, there is NO EFFECTIVE accountability.  Zero.
    If they fail at their company, they get a handshake worth millions and walk away.  Hell, not even always at that high level, often it’s like that all the way from VP’s up at larger companies.
    If an engineer can’t code like the other guys, then he needs to go look for another job.
    Anyone that’s worked in corporate America for any length of time has seen this radical shift from people that actually led (often from a place of having helped found the company) and worked towards a goal, to people at the top for whom there is only “take what I can get now”.
    In the grand scheme of things, I consider myself very fortunate.  My wife and I have good jobs and are paid well, but you never know.  I’ve had to work with my back when I was younger, I’ve been though strikes in the old days and layoffs – most recently 2009 – so I don’t take anything for granted.  And I assure you, like everyone commenting here I am QUITE accountable for the work I do.
    If someone could explain to me the value that your average 1000x salary CEO brings to a company other than being some rockstar figure head to talk to analysts once a quarter, I’d love to hear it.

      1. This is capitalism and it does not define America’s people unless we accept that definition.  The political experiment is ongoing, so there’s still hope.

  15. Hell, I could run a corporation into the ground for a fraction of what these execs get paid.

    1. Activision is listed on the NASDAQ.  I would look for my husband’s co. as well, but it is privately held and ‘not for profit’.

  16. If we assume the JC Penney CEO is payed proportionally to how much wealth he creates personally for the company, and that he works 10 hours a day for 365 days a year, then just 2 hours of his work should be roughly equivalent to a full year of work of a median employee under him. If he works a more reasonable 8 hours a day for 230 work days in a year, he would generate that much value for the company in roughly 1 hour.

    He must be an amazing worker! So productive! A year of work before coffee break Monday morning! Either that, or he’s grossly overpaid — but that’s impossible because, as we know, we live in a great meritocracy. /s

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