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S&P 500 CEO Pay by Pay Ratio
- fizwhiz 6y agoWhat's the source of the median pay data that the ratio seems to be completely based on?
- umeshunni 6y agoEspecially since most widely reported pay data is base salary only and not stock.
- fizwhiz 6y agoExactly. Also, Broadcom on this list seems to have one of the higher median pays of $354k. Paysa seems to disagree https://www.paysa.com/salaries/broadcom https://www.paysa.com/salaries/broadcom
- kpmcc 6y agoIt's from here: https://www.wsj.com/graphics/ceo-pay-for-the-sp500/?mod=hp_lead_pos10 https://www.wsj.com/graphics/ceo-pay-for-the-sp500/?mod=hp_l... "according to a Wall Street Journal analysis of data from MyLogIQ and Institutional Shareholder Services"
- fizwhiz 6y agoThat link is paywalled but from the title it appears that discusses CEO pay but not so much median employee pay.
- asdfadsfgfdda 6y agoThe original data is probably from SEC disclosures, as required by the Dodd-Frank Act. https://www.sec.gov/news/pressrelease/2015-160.html https://www.sec.gov/news/pressrelease/2015-160.html
- vecinu 6y agoThis isn't a fair representation of CEO pay. Jack Dorsey is not paid $1.40/year, his share ownership is paying him out millions per year. What is the validity of this data set? Netflix Median Pay being lower than Google's doesn't sit right with me. Broadcom's Median Pay is $354k? Impossible. Again, I'm not knocking the idea as it's a good thought exercise but it's important to be realistic and factual when coming up with conclusions.
- rococode 6y agoA lot of companies with <$15k median pay as well. Seeing as US federal minimum wage is ~$15k (higher than that in more than half of states) and there are companies listed with even <$10k median pay, either part-time or outsourced workers are being included, neither of which seems like a fair comparison to make.
- kpmcc 6y agoWhy don't you think it's fair? Legit ask, not a snipe.
- gvhst 6y agoSame reason why it’s not accurate to include a worker who work 1 month and quit as having made $10k/year on an annual salary of $120k.
- bhupy 6y agoIt needs to be PPP adjusted, like any global comparison.
- TremendousJudge 6y agoDon't know about outsourced, but part-time isn't a fair comparison since their hourly wage could be comparatively high but their total wage low. It would be fair if salaries were given per-hour, but I'm pretty sure that top executives don't have the same concept of working hours as low level employees
- 6y ago
- modeless 6y agoShouldn't Jack Dorsey's pay be $2.80 now?
- ganstyles 6y agoThis is cool. I was less interested in the ratio and more interested in the median pay at places. Some places I’ve never heard of have a significantly higher median pay than my company! And I’m pretty surprised at how high median pay is at FAANG
- gok 6y agoSeems to exclude stock based compensation?
- derpistan 6y agoSundar Pichai does not make a quarter billion per year in salary, almost all of it is in stonks.
- refurb 6y agoSeems like a bad way to measure. You're heavily penalizing CEOs who lead companies with low median wages. If I wanted to see if CEO wages were unjustifiably low or high, I'd look at things like total revenue, profit, stock price growth, etc. Then you could at least tell if pay is linked to performance.
- deleted 6y ago[deleted]
- txcwpalpha 6y ago> You're heavily penalizing CEOs who lead companies with low median wages. I have a feeling that this is the entire point. edit: to be clear, I disagree with it because it's a terrible way to measure what I think OP is trying to measure. As another commenter mentioned, this simple ratio doesn't tell the whole story.
- kpmcc 6y agoPrecisely.
- missedthecue 6y agoIt doesn't really prove anything. No one expects Walmart to pay the average employee as much as Facebook. Makes for some political rhetoric but nothing insightful
- azinman2 6y agoI didn't realize Sundar makes so much at Google. It's pretty mind boggling.
- gowld 6y agoIt's a bad point. Why is it more ethical to outsource low paying work to vendors to get it off payroll?
- B4CKlash 6y ago
- dalrympm 6y agoIt would be great if there were a clear definition of what "pay" means. Sundar Pichai's pay includes his $240m stock package granted in 2019. That's a truckload of stock but is that to be considered pay? https://www.theverge.com/2019/12/20/21031629/google-ceo-sundar-pichai-pay-package-amount-alphabet-compensation-stock https://www.theverge.com/2019/12/20/21031629/google-ceo-sund...
- txcwpalpha 6y agoMeanwhile, Bezos's pay on this is listed at $1.7 million/year, which seems off, even if it is some form of technically correct.
- MattGaiser 6y agoHe gets billions a year from stock increases. Salary is just so he has cash to order lunch.
- gowld 6y agoIt's just garbage data, two ways. It's ignoring his stock but including his security expenses. https://www.marketwatch.com/story/amazon-ceo-jeff-bezos-has-made-the-same-salary-for-decades-a-little-more-than-double-the-median-us-employees-pay-2020-04-16 https://www.marketwatch.com/story/amazon-ceo-jeff-bezos-has-...
- riknos314 6y agoThe $1.7million reflects not the increase in Bezos' net worth, but the cost of Bezos' employment to the company (salary + security and transportation). This is what actually shows up in expenses in Amazon's financials. AFAIK, Jeff hasn't gotten a stock grant since the IPO in 1997, so the vast majority of his net worth gains are purely capitol gains from holding amazon stock for over 20 years. Since there have not been additional stocks granted, this increase in Bezos' wealth actually costs Amazon nothing, not even dilution, as it's just an increase of value of existing shares.
- pmiller2 6y agoWhy wouldn't it be? Would you consider Steve Jobs' "pay" back when he was running Apple for the second time to be $1? I consider Jack Dorsey's entry to be an error, or a case of incomplete data.
- crb002 6y agoNo surprise that Warren Buffet is paying himself a reasonable salary.
- crimsonalucard1 6y agoLike someone else mentioned that's not a fair representation. Warren is paid in growth of his net worth.
- fbelzile 6y agoI'm not sure this ratio is very useful unless you also account for dividends/stock options paid out to shareholders.
- ivalm 6y agoThe low ratio end up being founders since they benefit from large ownership share.
- kpmcc 6y agoThe data is scraped from this (which is paywalled, apologies): https://www.wsj.com/graphics/ceo-pay-for-the-sp500/?mod=hp_lead_pos10 https://www.wsj.com/graphics/ceo-pay-for-the-sp500/?mod=hp_l... Edit: Seeing a lot of people complaining about the data quality. A lot of the more interesting breakdown on salary vs stock etc was only available by clicking on each row. Maybe a more advanced scrape could reveal that stuff.
- coderintherye 6y agoThis is a great idea and the Google Sheet share is a great format, but there are many flaws in the representation of the data. A great, immediate change would be to add a row at the top indicating some of the flaws, and then start making incremental changes to fix them (e.g. create a column for stock based compensation). Cause overall this is a great topic, just needs some work so people can focus on the topic at hand rather then get bogged down in the data quality issue.
- kpmcc 6y agoAppreciate it. Meant it mostly as a "Wow didn't know X company had 1000 to 1 CEO to median pay ratio". I'll see if I can get some more data / detail on what goes into the pay numbers.
- ncmncm 6y agoBig surprise to me is Broadcom paying median $354k. Second biggest surprise is Valero. I imagine they contract out most of the work, so have few employees. (Correction welcome.) Alphabet at $259k seems high. I wonder if the median includes any actual Google/Youtube/etc. employees, or only Alphabet management.
- dvirsky 6y agoThe Alphabet number includes RSUs, so definitely the actual median pay for all employees. See https://www.wired.com/story/what-tech-companies-pay-employees-2019/ https://www.wired.com/story/what-tech-companies-pay-employee...
- chadash 6y agoSome of these numbers seem to be off. For example, Harley Davidson has a median pay of $187k? Where is that coming from? They've got 5000 employees... I assure you that 2500 of them aren't making more than $187k. Meanwhile at the other end of the spectrum is Gap, with a reported median pay of ~$6k. This seems very low. At first I thought that maybe the overwhelming of their employees are oversees working in factories, but then I looked up their SEC filing and they don't manufacture their clothes. I'm assuming they have a bunch of part-time employees, but even then, $6000/year assuming $10/hour means employees are working an average of 11 hours per week, which still seems low.
- azinman2 6y agoPerhaps it should compare against the hourly wage to factor these concerns in.
- benkuhn 6y agoInteresting that the top of the list is more or less companies ranked by median pay ascending (give or take), plus Google.
- pmart123 6y agoThis is a bad way to do this. There's executives with multiple c-suite roles, compensation for multi-year performance targets, founders who elect to take low salaries and company size disparities.
- el_nahual 6y agoContrarian viewpoint: Having a CEO make ~1,000x the median wage doesn't seem that practically wrong to me, seen from a lens of "At most of these places, if the CEO messes up many, many thousands of people will lose their jobs." Ie, if one thinks of "right" compensation as being proportional to impact, not to skill or job difficulty.
- klahtnun 6y agoAnother way to think about this is how much the CEO is actually taking vs others. If the Aptiv CEO worked for free, giving his $15 million pear year to the 147k employees that would only be $100/year per employee. Meaningless. Aptiv spends $1 billion per year on salaries. So the very "worst CEO" (by this metric) receives 1.40% of all salary paid by the company. Google's CEO receives is 1%. I think this explains why CEOs make so much relative to an individual. Paying them 1% of all salaries feels, and is, very cheap given how important their role is. If Steve Jobs had been paid 50% of all salary it would have been worth it to shareholders. Of course lots of bad CEOs get paid huge amounts as well but why is this bad? The salary they received is not what hurts the company, it only cost around 1%. What really hurts is the damage a bad CEO does to the company. That can cost the entire resources of the company.
- outside1234 6y agoSundar makes $280M a year!?!?!?
- WarOnPrivacy 6y agoI like how most of the 6 figure employee salaries are clustered around the lower ratios - evidencing that top employee pay isn't at all dependent on top CEO salaries.
- davidivadavid 6y agoAlthough such ratios are fun for headlines, it might be more interesting to look at company-level Gini ratios for a better picture of inequalities.