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Career website Glassdoor today released a new report focused on comparing CEO pay to average worker pay in 2014 for large U.S. companies. As you might imagine based on previous studies that highlighted the gap between employee and executive salaries, the picture is not a pretty one.
The firm examined the ratio of CEO pay to median worker pay for companies listed in the S&P 500, finding that the average CEO pay was $13.8 million per year across all companies, the average median worker pay was about $77,800, and the average ratio of CEO pay to median worker pay was 204. In other words, on average, a CEO earns around 204 times what his or her median worker earns.
While CEO compensation numbers are widely available for public companies, information about average worker pay is not. Glassdoor notes that new pay ratio disclosure rules adopted by the Securities and Exchange Commission (SEC) this month mean that will change in 2017, when public companies will be required to disclose the ratio. In the meantime, Glassdoor wants to use its voluntary and anonymous salary reports from employees to get as close as possible to accurate figures.
While the report digs into the biggest U.S. companies, we’re only interested in tech. It just so happens that many big names (Microsoft, Yahoo, Apple, Salesforce, HP, IBM, Nvidia, Seagate, Amazon.com, Facebook, and Google) fall into either the top 10 or bottom 10.
Here are the 10 tech companies with the largest pay ratio:
|Company||Worker Pay||CEO Pay||Ratio|
|Computer Sciences Corp||$87,476||$13,267,195||152|
Here are the 10 tech companies with the smallest pay ratio:
|Company||Worker Pay||CEO Pay||Ratio|
Because Glassdoor only looked at CEO pay for publicly traded companies on the S&P 500, the list is not representative of CEOs in the broader U.S. market. Indeed, the firm notes that because executives at many small and mid-sized firms are paid dramatically less, looking at just the largest firms gives a misleading view of the ratio of CEO pay to worker pay.
Glassdoor lists three other limitations of the above findings:
- CEO compensation is highly volatile from year to year. Most CEO pay at large companies is made up of bonuses and stock compensation that swing sharply from year to year.
- While CEO pay for bonuses, stock options, and other pay beyond base salary is accurately reported in SEC filings, most workers underreport bonuses and stock options in surveys (such as Glassdoor’s salary survey). Most workers simply don’t know or don’t recall the details of non-salary compensation. As a result, total pay is likely underreported for workers, which could overstate CEO pay ratios.
- The distribution of job titles for salary reports on Glassdoor does not necessarily represent the full distribution of positions at these companies. Companies for whom a disproportionate number of low-skilled (or high-skilled) workers have reported their pay on Glassdoor may have median worker pay that is biased downward (or upward), especially as companies don’t typically disclose their actual distribution of job titles.
Median worker compensations (adjusted for inflation into 2014 dollars) are based on Glassdoor salary reports for U.S. employees between January 1, 2009 through August 17, 2015. In some cases, two or more CEOs were reported for 2014, so Glassdoor chose the CEO who served for the majority of the year.
You can read the full report from Glassdoor here: CEO Pay vs. Median Worker Pay
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