CEO pay: 364 times more than workers
Key Excerpts from Article on Website of Money magazine
Posted: September 6th, 2007
Pay comparisons almost always leave someone feeling dwarfed, and none more so than the CEO-to-worker pay gap. But even CEOs have reason to feel seriously dwarfed these days, thanks to the outsized paychecks of private equity and hedge fund managers. The average CEO of a large U.S. company made roughly $10.8 million last year, or 364 times that of U.S. full-time and part-time workers, who made an average of $29,544, according to a joint analysis released Wednesday by the liberal Institute for Policy Studies and United for a Fair Economy. The IPS and UFE pay-gap numbers are also wider than some other measures of CEO-to-worker pay because they count both full-time and part-time workers in their calculations, which effectively lowers workers' average pay due to fewer hours worked. If you just consider the average compensation (wages plus benefits) of full-time year-round workers in non-managerial jobs - roughly $40,000 - CEO pay is more like 270 times bigger than the average Joe's. That's still a far cry from days gone by. In 1989, for instance, U.S. CEOs of large companies earned 71 times more than the average worker, according to the Economic Policy Institute. The top 20 CEOs of U.S. companies made an average of $36.4 million in 2006. The pay gap numbers don't include the value of the many perks CEOs receive, which averaged $438,342, according to the report. Nor do they include the pension benefits CEOs receive. But even including all that, CEO pay can look like chump change next to private equity and hedge fund managers' pay. Those managers made an average of $657.5 million in 2006 - more than 16,000 times what the average full-time worker makes, and roughly 61 times that of the average CEO.