Home News Big Company CEOs Outearn Employees by an Average $1.2M, Study Says

Big Company CEOs Outearn Employees by an Average $1.2M, Study Says

Big Company CEOs Outearn Employees by an Average $1.2M, Study Says

News brief:

  • According to job search site Lensa, there is a 2,202% wage gap between the average CEO of a big company in the U.S. and a worker at the same company — equating to $1,276,520.77 more annually on average.
  • The Nov. 9 study results also compared CEO and employee pay across countries. The U.S., U.K., and Germany have the highest-paid CEOs, respectively, while Greece, the U.K., and Italy have the largest CEO pay gaps (the U.S. comes in at No. 7). Estonia, Poland, and Iceland have the smallest CEO pay gaps. In Estonia, workers make 41% of the average CEO’s salary, according to Lensa.
  • For its analysis, Lensa looked at 100 companies’ CEO and employee salaries across the U.S. and data from companies internationally.

Rising income inequality has been an issue of concern for decades in the U.S., leading in part to resistance movements like Occupy Wall Street. The gap between the pay of CEOs and workers at their own companies is an oft-cited example of this disparity, particularly as the gap has risen sharply over the years.

The widening gap is due largely to a kind of arms race between companies, which each believes “that their CEO should be compensated above average,” according to a CNBC interview with Lawrence Mishel, a distinguished fellow at the Economic Policy Institute. The practice ramped up in the 1990s, he told the outlet.

Despite criticism, the pay disparity between CEOs and other workers doesn’t appear to be going anywhere.

Lensa’s study found that Comcast and Apple had the highest-paid CEOs in Brian Roberts and Tim Cook, who took home $3.44 million and $3 million respectively. Coca-Cola and Starbucks had the biggest wage gaps between CEOs and other employees. Coca-Cola CEO James Quincy made $1.6 million, while the median employee pay was $11,342.

Tesla CEO Elon Musk had the smallest wage gap, making less than an average Tesla worker. His compensation demonstrates that base salary is only a small part of total pay, however; in 2020, Lensa noted, Musk received “an astounding $6.66 billion worth of compensation,” mainly through “stock options and rewards should company performance hit certain benchmarks.”

Recently, rising CEO pay has seen pushback even from company shareholders. In April, The Wall Street Journal reported that 1 in 6 companies holding say-on-pay votes the previous September received less than 70% support for proposed payment packages from shareholders, a drop from 1 in 12 companies the year before.

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