If one of your fantasies is having a semi-trailer trailer into your home and dumping a huge mountain of cash in your front garden, you should consider becoming the CEO of a large corporation. Recent data published by the AFL-CIO covered CEO salary rates from 2020 to 2021 and compared them to the average salary of employees working for the same company — and the differences are striking.
The AFL-CIO is a pro-union pressure group, so its motivation behind compiling this data is certainly pro-labor. But nevertheless, the result is rather terrible. While the numbers vary between industry sectors, some comprehensive calculations show that S&P 500 CEOs earned average salaries of about $15.5 million last year, more than 300 times their workers’ payroll.
According to the data, the biggest gap lies in the consumer discretionary segment, which includes the retail operations of Amazon, Nike, and McDonald’s. On average, the salaries of CEOs in this sector were 741 times higher than the salaries of the average worker. Next on the list is Consumer Staples, with just over half the consumer rating gap, with CEOs making an average of 383 times more than their average employee. In case you’re wondering, the discretionary consumer segment covers companies that sell non-essential goods (like a large selection of Amazon hawks, sneakers, or a Big Mac). Consumer Staples refers to daily necessities, the category in which S&P analysts have delegated Proctor & Gamble and Coca-Cola. Personally, I don’t need to drink Coca-Cola every day, but maybe I’m weird.
Healthcare was also a criminal of the ratio of CEO pay to average employee wages, but it had the lowest number of the top five, with CEOs making just 253 times the average employee. As for technology, both communications and information technology services occupied the top five list with ratios of 334:1 and 315:1 respectively. But that doesn’t leave tech companies out of their predicament regarding CEO pay.
Headquartered in Dublin, Aptiv Plc had the second-highest pay differential of any S&P 500, with its undoubtedly smiling CEO, Kevin Clark, making $31,267,329 in 2020 — 5,294 times what his average worker made in the same year. . Only Abercrombie & Fitch had a wider gap, with 6565:1.
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The third biggest divide was also a technology company, namely Western Digital. Its CEO, David Goekler, made $3,572,376 in 2020, which puts it 4,934 times higher than its average employee. By contrast, Tim Cook’s Apple comps of $14,769,259 and Satya Nadella’s income of $44,321,788 from Microsoft put them at 256:1 and 257:1, respectively.
Do CEOs really work hard enough to earn such exorbitant salaries? I suppose it depends on how you define the words “earning” and “work”. But on the plus side, someone needs to keep the luxury yacht industry in business.
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