Because clearly he does 1,795x the work
May 1, 2013 7:04 PM   Subscribe

Bloomerg compiles a list of the 250 highest CEO-to-employee-pay ratios, estimated based on publicly available information. They also publish any rebuttals issued by those companies.
posted by Freon (65 comments total) 24 users marked this as a favorite
 
Should I be surprised that retailers seem to top the list? It's a bit like a who's who of the as-of-yet unautomated services industry.
posted by pwnguin at 7:16 PM on May 1, 2013 [1 favorite]


This can't be right this is all white men
posted by shakespeherian at 7:16 PM on May 1, 2013 [32 favorites]


When robots take our jobs will the top rate just be ∞?
posted by 2bucksplus at 7:21 PM on May 1, 2013 [1 favorite]


Johnson had about eighty million dollars in unvested Apple shares that he forfeited by signing with J.C. Penney, so he did his old employer far more good in leaving than he ever did for the new employer by joining.
posted by Kevin Street at 7:25 PM on May 1, 2013 [3 favorites]


Yeah, I was initially surprised (and then on reflection totally unsurprised) by the same thing that pwnguin's pointing out. Like, "Oh, yeah. Of course. Duh."

Interesting too that a lot of the corporate responses address the high-CEO-pay angle — "Hey, look, what we pay this guy is pretty close to normal" — and gloss right over the low-worker-pay angle. The Starbucks PR entity at least had enough of a clue to mention that their benefits are pretty okay.
posted by Now there are two. There are two _______. at 7:27 PM on May 1, 2013 [1 favorite]


And when I see companies like Nike and Wal-Mart on this list, it makes me think that a lot of the lowest-paying assembly work has been outsourced to third world contractors, so the CEO-to-employee ratio is skewed.
posted by Multicellular Exothermic at 7:27 PM on May 1, 2013 [11 favorites]


The problem is that this lists pay. The smart people know that if you can rig the books to get gains instead of pay, then you only have to pay capital gains tax. When Mitt Romney was CEO of Bain Capital, he (supposedly) wasn't paid anything. That's why he only paid 15% income tax. I'm guessing this is why Goldman Sachs is so far down the list.

So if you think this is bad, know that this is really just the tip of a well-hidden iceburg.
posted by eye of newt at 7:28 PM on May 1, 2013 [28 favorites]


The smart people know that if you can rig the books to get gains instead of pay, then you only have to pay capital gains tax. When Mitt Romney was CEO of Bain Capital, he (supposedly) wasn't paid anything. That's why he only paid 15% income tax. I'm guessing this is why Goldman Sachs is so far down the list.

That, and I can't imagine Goldman Sachs has many positions at minimum wage.
posted by Pogo_Fuzzybutt at 7:29 PM on May 1, 2013 [7 favorites]


Interesting, though that second column of salaries clearly does not factor in the people at the very bottom, i.e. the people in the third world who stitch Abercrombie's shirts and pick Starbucks' coffee and whatnot.
posted by Sys Rq at 7:32 PM on May 1, 2013 [6 favorites]


I hate it when they say compensation is competitive with the rest of the industry. It's just such a meaningless and empty mush statement considering the compensation system as a whole is becoming more and more broken.
posted by triggerfinger at 7:34 PM on May 1, 2013 [5 favorites]


And when I see companies like Nike and Wal-Mart on this list, it makes me think that a lot of the lowest-paying assembly work has been outsourced to third world contractors, so the CEO-to-employee ratio is skewed.

Exactly - and a few of them are lying in a morgue in Dhaka
posted by Mario Speedwagon at 7:37 PM on May 1, 2013 [1 favorite]


I've been working as a temp in a Nike warehouse for the past year. Probably over seventy-five percent of the people on the floor are temps, most making minimum wage with their employment limited to a year. Place doesn't even pretend they might make you a full-timer - the agency rep once called us together to warn us not to send resumes to HR, didn't want to hurt the feelings, I guess, of the person who might need to toss our resumes in the trash. Our inferior status and income probably isn't reflected in the annual salary provided here for a Nike employee. And, of course, we're treated like princes compared to the people gluing the shoes together.
posted by TimTypeZed at 7:44 PM on May 1, 2013 [17 favorites]


That, and I can't imagine Goldman Sachs has many positions at minimum wage.

Wow, average worker pay + benefits at Ford ($75,565) is very nearly as much as at Goldman Sachs ($76,254). I would not have guessed that at all. Yes, the automotive industry is highly unionized and the pay scales and benefits tend to be very transparent, however, I always had the impression that employees at Goldman Sachs would earn a lot more on average, in return for the crazy hours they have to put in.

I graduated in Finance, I'm glad I chose to work in Automotive rather than Investment Banking =P

This is why the country needs its automotive industry: it generates a huge amount of middle class jobs, and can't destroy the economy the way Goldman Sachs can...
posted by xdvesper at 7:58 PM on May 1, 2013 [3 favorites]


There has never been but one question in all civilization-how to keep a few men from saying to many men: You work and earn bread and we will eat it.


Abraham Lincoln
posted by larry_darrell at 8:00 PM on May 1, 2013 [27 favorites]


I always had the impression that employees at Goldman Sachs would earn a lot more on average

1) Not everyone at a financial firm is a trader. They have admins and janitors too.

2) Much financial-industry compensation takes the form of outrageously large bonuses which are not "salary."
posted by drjimmy11 at 8:03 PM on May 1, 2013 [1 favorite]


I wonder who the lowest paid worker at Goldman Sachs is.

I imagine it'd be vaguely similar to being the nicest guy in the third reich.
posted by cacofonie at 8:03 PM on May 1, 2013 [4 favorites]


Ronald Johnson is worth every J.C Penney
posted by twoleftfeet at 8:14 PM on May 1, 2013 [2 favorites]


I always had the impression that employees at Goldman Sachs would earn a lot more on average

1) Not everyone at a financial firm is a trader. They have admins and janitors too.


I started out as a janitor at Goldman Sachs and now I am a millionaire. My big break came when I worked the deal on 2-ply, getting our toilet paper for a fraction of what we used to pay. I parlayed that into a deal for 3-ply, which is more comfortable. I was promoted, and the rest is history.

That's my lesson to you kids. If you want to get rich, be nice to assholes.
posted by twoleftfeet at 8:24 PM on May 1, 2013 [31 favorites]


In explaining the $35.2 million take of their CEO, Nike likes to use words like reward, retain, incentive, performance. But here on the warehouse floor, even the hardest worker, the very best order-picker or box-taper or truck-loader has ZERO opportunity for doing anything more, has ZERO chance of retaining even their dirty sweaty shit minimum wage temp job after 52 x 40 hours of service. I see good dependable workers being sent back to the unemployment line, to be replaced with a parade of baggy-pants goofballs who won't last two weeks. Little interest in rewarding performance for basic work when you can just watch them all tear at the scraps.
posted by TimTypeZed at 8:25 PM on May 1, 2013 [32 favorites]


And of course all this is small change compared to the take-home of the top hedge fund managers, a handful of whom cleared over a BILLION dollars last year. But those guys often work weekends.
posted by haricotvert at 8:25 PM on May 1, 2013 [1 favorite]


Umm...are you fucking serious? Jesus Christ.
posted by turgid dahlia 2 at 8:49 PM on May 1, 2013


Man, look at all that marbling. nomnomnom.
posted by thsmchnekllsfascists at 8:52 PM on May 1, 2013 [7 favorites]


This is why the country needs its automotive industry: it generates a huge amount of middle class jobs, and can't destroy the economy the way Goldman Sachs can...

GMAC was a huge player in the mortgage backed security crisis, at a certain point, a big enough car company can easily morph into a bank.
posted by T.D. Strange at 8:55 PM on May 1, 2013


TimTypeZed - I worked for H-P in the 90s, and they did this very thing. I am still angry about it. They were much ballyhooed as one of the best places to work in the country at the time, but those reports forgot to mention the rotating temp force that was the only place a poor schlub could get in. Real kick in the balls to get fired after exactly 1 year minus 3 weeks just so they don't have to give you a fucking raise or pay health insurance according to state law. They don't even pretend there's another reason -- they don't have to. That's the real fucked thing. Nobody cares.

It should be illegal, but this is super common in manufacturing, I think. Or, was. The new hotness seems to be having even poorer schlubs in the third world do it for even less. I would argue our dependence as a society on cheap consumer goods were at the heart of it except I worked on bomb parts at H-P, and a couple of base closures by Clinton aside, there was no shortage of money for that.
posted by cj_ at 9:12 PM on May 1, 2013 [11 favorites]


I started at the top of the list, and then when I got down around the middle I found myself thinking, "Oh, only $17 million. That's very reasonable!" *sob*

Read company comment: "Release the hounds."
posted by qxntpqbbbqxl at 9:42 PM on May 1, 2013 [2 favorites]


drjimmy11: "1) Not everyone at a financial firm is a trader. They have admins and janitors too."

Actually, I'll bet that the admins and janitors are contractors, which allows the company to pass the buck for treating its lowest-level employees like shit. It's pretty much the standard practice everywhere these days.
posted by schmod at 9:44 PM on May 1, 2013 [10 favorites]


Okay, new rule: once the spread between CEO and employee pay gets past a certain point, the CEO can be challenged to single combat for their position and assets, no appointing of champions to sub for either party.
posted by jason_steakums at 10:38 PM on May 1, 2013 [18 favorites]


I'm not against a maximum wage limit exactly, but I would be for some law that makes it illegal to have wildly disparate wages within a company. Ideally that would bring down the wages of those at the top AND bring up the wages of those at the bottom, but realistically it would just force those at the top to find more ways to utilize "bonuses" and other non-salary compensation.
posted by dogwalker at 10:51 PM on May 1, 2013


Ron Johnson, for all that money, didn't even bother moving from California to Texas. He and 9 other executives commuted via private jet.

Shows a real commitment to the company. Just as well, because he got fired anyway.
posted by empath at 10:55 PM on May 1, 2013 [3 favorites]


I'm curious what the ordering is in the other half of the S&P 500 (though sadly I doubt there are any outliers thataway).
posted by en forme de poire at 11:25 PM on May 1, 2013


empath: "Shows a real commitment to the company. Just as well, because he got fired anyway."

I'm curious if he lost any of those signing bonuses, or if he successfully converted his Apple unvested stock into capital he can now sell.
posted by pwnguin at 12:31 AM on May 2, 2013


Average Japanese CEO Earns One-Sixth As Much As American CEOs

And this, my friends, is why Japan is uncomptetitive and a third-world hell-hole.
posted by Harald74 at 1:08 AM on May 2, 2013 [13 favorites]


I've always thought Japan to be the world's most successful socialist economy. It gets overlooked as they aren't officially socialist.
posted by jcking77 at 2:59 AM on May 2, 2013


What shocked me was I was thinking whilst reading this list that of course the CEO gets paid like 1000 times the minimum wage guys...
Then I realised that it is ratio to median pay, not minimum pay.
posted by Just this guy, y'know at 3:08 AM on May 2, 2013


And this, my friends, is why Japan is uncomptetitive and a third-world hell-hole.

Japan is a ticking time-bomb of financial insecurity. If anything it's evidence that demographics are more important to economic security than how much the CEO's are paid.
posted by zoo at 3:54 AM on May 2, 2013 [2 favorites]


Now how does one convert the pay rate of Mayor Bloomberg to his underlings for the same ratio publishing?
posted by rough ashlar at 4:07 AM on May 2, 2013


The real silliness here is the idea that somehow a "genius" CEO is so important to your company that everyone is willing to wildly overpay for one. It's the Great Man theory of history all over again.
posted by selfnoise at 4:08 AM on May 2, 2013 [2 favorites]


The Target Company Response:

"We place a priority on providing comprehensive pay and benefits for all of our team members that often exceed the external market. Our executive compensation programs are competitive with companies of our scale and complexity and are designed to attract, retain and motivate a premier management team. –Jessica Deede, spokeswoman"

All our team members?

The company comments are in the HTML if anyone wants to copy-paste them, or make a tumblr or tweet them.
posted by marienbad at 4:15 AM on May 2, 2013


Average Japanese CEO Earns One-Sixth As Much As American CEOs
And this, my friends, is why Japan is uncomptetitive and a third-world hell-hole.


Interesting POV.

Yet, in the 1970's Japan was very competitive in autos and was kicking Detroit ass and taking names. And the ratio of CEO pay to the lowest worker pay was closer together back then.

But as long as speculative claims are being made I'd stake out a claim that 3rd world hell-hole status comes from having leaking Nuclear power plants and looking to dump over 40 years of money and man-hours into a festering open wound of toxins would have an effect.

But really, what's Detroit's excuse then?
posted by rough ashlar at 4:16 AM on May 2, 2013


selfnoise: "The real silliness here is the idea that somehow a "genius" CEO is so important to your company that everyone is willing to wildly overpay for one. It's the Great Man theory of history all over again"

And yet, when the shit hits the fan, these same colossi who were "essential" to the operations during the good times, claim to be uniformly ignorant of and uninvolved in anything that their companies do.

I'm also disappointed that the Starbuck's reply doesn't highlight the main value that the CEO brings:

Campaigners point out that since first opening its doors in Britain in 1998 Starbucks has paid only £8.6m in corporate income taxes there. In testimony last month before a parliamentary committee, Starbucks had said this was because it had made a profit in only one year in Britain, though it also admitted that its British business had made large payments for coffee to a profitable Starbucks subsidiary in Switzerland and large royalty payments to another profitable subsidiary in the Netherlands for use of the brand and intellectual property...Although Starbucks denies using tax havens, it admits to having negotiated a secret low rate of tax with the Dutch taxman for its subsidiary in Amsterdam. (From well-known pinko rag, The Economist).
posted by Jakey at 4:46 AM on May 2, 2013 [5 favorites]


I hate it when they say compensation is competitive with the rest of the industry.

They also say that to justify the insultingly small amount they pay to workers. It's OK, because pay scales in the [whatever] industry are so far from equitable! If we reduced the inequity, we wouldn't be competitive!
posted by Kirth Gerson at 4:57 AM on May 2, 2013


Wow, average worker pay + benefits at Ford ($75,565) is very nearly as much as at Goldman Sachs ($76,254).

My ex-boyfriend's father spent his entire working life at Chrysler. Not only was he able to work up from entry level to some top level position at the plant near St Louis, when he retired he had an insane benefits package (that included the ability for his wife and 5 children to forever be able to buy Chrysler vehicles at sticker cost). Unfortunately, I remember driving past that huge Chrysler plant not too long ago and it was vacant. Seeing that really bummed me out. That man had no education whatsoever and was still able to move his family into a different class with hard work. Every time I saw that old man I thought about how great America could be and how the "dream" wasn't dead yet.

Long live the auto industry (even with all of it's faults). But fuck the rest of these CEO's and companies, for real.
posted by youandiandaflame at 5:20 AM on May 2, 2013 [3 favorites]


I like the common refrain that the CEO pay is "performance based". They of course mean that the company has to do well for the guy to get that (which isn't true; fail Nike and you'll be booted out, but with a very generous severance package. There's zero risk here, unless getting not quite as many millions of dollars will harm you) but that can also be read that the non-CEO pay isn't performance based, it's just generously offered from the goodness of the CEO's heart. He has to perform of else he doesn't get this, but everyone else can just show up and have chair races all day and they'll get paid.

I was about to type that all salaries are performance based, but that's not true. Michael Jeffries of Abercrombie and Fitch isn't going to find out one morning that the company doesn't feel like giving him the minimum benefits he's required by law to get and is fired or is having his hours cut so that he doesn't qualify for some measly thing or other.

So did everyone have a good May Day yesterday?
posted by Legomancer at 5:23 AM on May 2, 2013 [2 favorites]


On a more serious note (than me, above), Japan has the world's lowest Gini coefficient, indicating that the CEO pay is not terribly out of step with wealth distribution in society as a whole, especially when we compare with the US, which has a terrible score.
posted by Harald74 at 5:49 AM on May 2, 2013 [1 favorite]


This can't be right this is all white men

24) Irene Rosenfeld (Kraft); 54 Carol Mayerowitz (TJX); 124) Indra Nooyi (Pepsi); 130 Meg Whitman (HP); 132 Ellen Kullman (Dupont); 138) Ursula Burns (Xerox); 156 Patricia Woertz (ADM); 169 Andrea Jung (Avon) (after which I stopped looking.)

Disproportionate, granted, but not absolute. Bottom line, from the data presented, it would appear that, given the chance, women are happy to stoop just as low as men.

Next question is, how many of these are hired hands, how many actually founded the company? And how much of a difference, if any, should that make in our outrage? And why has this happened in the first place? Time was, and not so very long ago, that senior execs got nowhere near this kind of compensation. Thoughts?

It's the Great Man theory of history all over again.

Occasionally that theory does fit. Think Steve Jobs, think Robert J Watson, think Michael Eisner. Granted, they are the exceptions, but they are not myth any more than Napoleon or Julius Caesar are myths.

I hate it when they say compensation is competitive with the rest of the industry.

Similarly with college tuition. As goes Harvard....
posted by IndigoJones at 5:51 AM on May 2, 2013


(I had to check my own company, BTW, which has 7000 employees and a revenue of about 2.6 billion USD. My CEO is paid 10 times what I get (as a lowly engineer) and about 20 minimum pay in Norway. Not too bad, and I'm fairly sure he works harder than me.)
posted by Harald74 at 5:52 AM on May 2, 2013


I'm amazed how many of the corporate statements boil down to "Don't pick on us! Everyone else is doing it too!"
posted by Karmakaze at 6:04 AM on May 2, 2013 [3 favorites]


I'm amazed how many of the corporate statements boil down to "Don't pick on us! Everyone else is doing it too!"

Except of course for the #3 pick which is just a big "Fuck you, you incompetents".
posted by Runes at 6:15 AM on May 2, 2013


"Read company comment: 'Release the hounds.'"

I'm honestly surprised they haven't realized the cost they can shave by outsourcing their comments to youtubers.
posted by Eideteker at 6:19 AM on May 2, 2013


They should compare the CEO pay to the whole payroll of the company. CEO pay is almost irrelevant. You can fire all the CEOs and spread out that money to the rest of the employees and they'd barely notice the difference.
posted by gjc at 6:32 AM on May 2, 2013 [1 favorite]


I used to work for McGraw Hill in 1997. I see their salaries still suck.
posted by stormpooper at 6:40 AM on May 2, 2013


You can fire all the CEOs and spread out that money to the rest of the employees and they'd barely notice the difference.

That is not really the issue. It is more that it is indicative of corporate values. If I remember correctly the CEO pay ratio was something Buffet used to look at when buying a company back when he was a value investor. If it was out of whack he felt the CEO was not interested in running the company well but was instead interested in fleecing the company for personal game and short term targets.
posted by srboisvert at 6:46 AM on May 2, 2013 [3 favorites]


I think it would be interesting to see this same exercise done for educational institutions and other "non-profits," as well. A small community college can have a president making $350,000 a year while the bulk of the teaching is done by people making less than $20,000 a year: five three-hour classes per week, at $28 an hour, for ten months of the year, totalling about $16,800. Not as gruesome, obviously, but perhaps even more loathsome when you look at the mission statements and propaganda of these institutions.

Just for the record, if you fired that president and spread his salary around the rest of the faculty and staff, they'd each get about a $1500 raise.
posted by sonic meat machine at 6:54 AM on May 2, 2013 [3 favorites]


This is the fault of institutional investors (like me) who fail to kick and scream enough about what we all know are absurd compensation practices. So, uh, sorry.
posted by mullacc at 6:55 AM on May 2, 2013 [1 favorite]


gjc: "You can fire all the CEOs and spread out that money to the rest of the employees and they'd barely notice the difference."

My CEO makes just shy of 300 times my salary. If you fired him and spread his pay evenly around our employees, we'd each have an additional $175 in our pockets.

Very few people would turn down $175 if you offered it to them.
posted by schmod at 6:57 AM on May 2, 2013 [4 favorites]


Someone who is a local "hero" here is Jack Stack. He wrote, and practices (in his company) THE GREAT GAME OF BUSINESS. He would be more than happy to show your company how to be set up like this too.
I have been to many of his meetings, worked for companies that practice his preachings, and IMHO if the whole business/finance industries would do such things, hell 75% of our problems would be solved.
posted by QueerAngel28 at 7:11 AM on May 2, 2013 [1 favorite]


but I'm a socialist.
posted by QueerAngel28 at 7:12 AM on May 2, 2013


It's the Great Man theory of history all over again.

Occasionally that theory does fit. Think Steve Jobs, think Robert J Watson, think Michael Eisner. Granted, they are the exceptions, but they are not myth any more than Napoleon or Julius Caesar are myths.


When a theory fits occasionally, it is even more disproven than if it never fits -- at least a negative correlation shows that you can just add "not" to the theory.
posted by Etrigan at 8:19 AM on May 2, 2013 [2 favorites]


The smart people know that if you can rig the books to get gains instead of pay, then you only have to pay capital gains tax.

Ha ha ha, suckers! I've been deferring my million dollar salary for the last 20 years, so I've only had to pay the same taxes as a wage slave. Stress in lieu of pay, baby! I'm telling you, that's the way to go. Another 10 years and I can trade all of my stress in at inflated market rates. With all of the stress I've been banking, I might even be able to afford that new heart the Doc says I'm going to be needing soon.
posted by It's Raining Florence Henderson at 9:22 AM on May 2, 2013


I recall when Ben & Jerry's, before they sold out to Unilever, were looking for a CEO and noted that the salary would be six times that of the least employee.

They had a bit of a time turning up suitable candidates.
posted by IndigoJones at 11:00 AM on May 2, 2013


You can fire all the CEOs and spread out that money to the rest of the employees and they'd barely notice the difference.

I agree with you that most people in these companies would barely notice the difference if their CEO was fired.
posted by Riki tiki at 11:06 AM on May 2, 2013 [3 favorites]


Very few people would turn down $175 if you offered it to them.

Spread over a year of full-time work, it's less than 9 cents an hour. Very few people would be impressed with a raise of 9 cents an hour.
posted by Longtime Listener at 3:09 PM on May 2, 2013 [1 favorite]


It isn't just the CEO though, the CEO gets the biggest check but the CFO, COO, CTO and a bunch of other top executives get similarly disproportionate pay.

JC Penny's COO Michael Kramer made $33 million in 2011.
posted by VTX at 6:03 PM on May 2, 2013 [1 favorite]


This is why terrorist bombing schemes to mobilize the public against plutocrats will never work; the only effective "propaganda of the deed" is to kill at the top first and work your way down.
posted by klangklangston at 7:05 PM on May 2, 2013 [1 favorite]


Okay, new rule: once the spread between CEO and employee pay gets past a certain point, the CEO can be challenged to single combat for their position and assets, no appointing of champions to sub for either party.

I love the idea that the straight razor, switchblade, or buck knife could be the ultimate class-levelers. Failing that, maybe a pick-axe or a pipe wrench.
posted by thsmchnekllsfascists at 4:22 PM on May 7, 2013


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