Top 10 Worst Companies in CEO-to-Worker Salary Ratio: You Probably Use Them All

Top 10 Worst Companies in CEO-to-Worker Salary Ratio: You Probably Use Them All September 7, 2015

CEOtoWorkerRatio smallOrganized labor has seen better days. Plagued by political corruption, changing economic realities, and poor leadership, labor has been weakening for decades. American Christians seem no different from the rest of Americans who are either ambivalent or even happy about this reality, but healthy labor organizations are essential to our society. Their failure–no matter who is to blame for that–is not a good sign.

In the 1950s, the ratio between CEO salary of S&P 500 type companies and their workers was 20-to-1. According to study by the career website featured last week in The Wall Street Journal, the ratio is now 204-to-1.

That means that the average CEO-to-worker pay ratio is up 1000% since 1950.

The Glassdoor study is sobering. According to their research, the worst offenders are high-profile companies that many of us interact with regularly.

Take Chipotle, for instance. I eat there two or three times a month. Last year Steve Ells, Chipotle’s CEO, made almost $29 million. The average worker at Chipotle made only $19,000. In my neighborhood, the vast majority of those workers are immigrants. The worst offender was David Zaslav, CEO of Discovery Communications (Discovery Channel), who received compensation valued at over $156 million last year, 2000 times that of the median income for the company.

According to Glassdoor, The top ten worst CEO-to-worker wage ratios are:

  • Discovery:     CEO, $156 million / Worker, $80k / Ratio – 1,951:1
  • Chipotle:        CEO, $  29 million / Worker, $19k / Ratio – 1,522:1
  • CVS Phar:      CEO, $  32 million / Worker, $27k / Ratio – 1,192:1
  • Walmart:        CEO, $ 25 million / Worker, $22k / Ratio – 1,133:1
  • Target:             CEO, $ 28 million / Worker, $30k / Ratio –   939:1
  • CBS Corp:      CEO, $ 57 million / Worker, $66k / Ratio –   862:1
  • Bed Bath&B: CEO, $  19 million / Worker, $26k / Ratio –   734:1
  • Macy’s:             CEO, $ 16 million / Worker, $23k / Ratio –   724:1
  • Gap:                   CEO, $ 16 million / Worker, $23k / Ratio –   705:1
  • Starbucks:      CEO, $ 21 million / Worker, $32k / Ratio –   669:1

According to Roger Martin, dean of the University of Toronto’s Rotman School of Management, the tide turned on CEO-to-worker pay disparity the day “CEOs switched from asking the question of ‘how much is enough?’ to ‘how much can I get?’” In a staggeringly short period of time–say 1990 to present–Business Executives and Investors redefined the nature of business in their favor. “It’s not that either hates labor or wants to crush their lives,” Martin says. “They just don’t care.” (Bloomberg)

Most people have no sense of what a radical change this disparity represents in our society. A 2014 Harvard University study says, “Americans drastically underestimated the gap in actual incomes between CEOs and unskilled workers,” (from WP). Most Americans think the average CEO salary is somewhere in the neighborhood of 30 times higher than the average worker. In fact it is more than 350 times larger.

The exploding disparity between worker and executive salaries is not a global phenomenon. This is an American problem. In 2013, the average Fortune 500 CEO made $12.2 million in the US, compared to just $3.7 million in the UK, and $5.9 million in Germany.

Organized Labor is not the only answer to the problem, but it’s an important factor. Walter Rauschenbusch, a pastor and theologian who lived in Hell’s Kitchen at the end of the 19th Century, spoke up for workers in the days of the Robber Barons. Rauschenbusch was bothered not just by the suffering, but by the apparent lack of feeling with which fellow human beings—and fellow Christians—would exploit their opportunities, abuse their power, and take advantage of another’s weakness, all the while ignoring their own complicity in the tragic social circumstances. The barons of the Gilded Age seemed content in their ornate homes and churches, while the squalor of the tenements existed nearly undetected, right beneath their noses.

Those days are here again.

What kind of society does it take in order to produce business leaders who are okay making $2-3 million a year, even if they could make $20 million, because they want to be able to employ more people and pay a decent living wage? This is a question that Christians should be asking much more energetically than we currently are.

Income disparity and the health of the laborer is a matter of great importance in the scriptures. Here’s a warning to the CEOs of the world from the prophet Ezekiel:

“Thus says the Lord God: Ah, shepherds of Israel who have been feeding yourselves! Should not shepherds feed the sheep? You eat the fat, you clothe yourselves with the wool, you slaughter the fat ones, but you do not feed the sheep. The weak you have not strengthened, the sick you have not healed, the injured you have not bound up, the strayed you have not brought back, the lost you have not sought, and with force and harshness you have ruled them. So they were scattered, because there was no shepherd, and they became food for all the wild beasts. My sheep were scattered; they wandered over all the mountains and on every high hill. My sheep were scattered over all the face of the earth, with none to search or seek for them… therefore, you shepherds, hear the word of the Lord: Thus says the Lord God. Behold, I am against the shepherds…” (Ezekiel 34:2-6, 9).

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