Saturday, May 26, 2018
Chief executives at the biggest public companies got an 8.5 percent raise last year, bringing the median pay package for CEOs to $11.7 million. Across the S&P 500, compensation for CEOs is often hundreds of times higher than typical workers.
The pay increase matches the bump that CEOs received in 2016, according to salary, stock and other compensation data analyzed by Equilar for The Associated Press.
For the first time, the government required companies to show in their annual proxy statements just how much more bosses make than the typical employee. The typical CEO made 164 times the median pay of their employees, according to Equilar’s analysis.
Because the government gave companies wide leeway in how they calculated the median pay of their workers, and because some industries rely heavily on part-time workers, the CEO-to-worker pay ratios are imperfect and make comparisons difficult. Despite pushback, Congress forced companies to publish the data as a way to shine a spotlight on income inequality.
A debate has already ensued about the significance of this newly released data.
“High pay ratios send a dispiriting message to the workforce,” said Liz Shuler, secretary-treasurer of the AFL-CIO, which has been calculating its own tally of CEO-to-worker pay ratios for years. “Companies are asking their workers to do more with less, at the same that CEO pay is on the rise.”
Detractors among business groups, academics and compensation consultants say the ratio can give a false impression. For example, some companies exclude some of their lower-paid foreign workers, which regulations allow. And companies with large part-time workforces will show much greater disparity between the CEO’s pay and median pay.