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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  • scott stone

    This is one I need help with. As a Christ follower I see this information and believe it is something I should care about. But as a business owner and economist it is something that I really don’t get too worked up about. I view it as fodder for the low information voter. It’s red meat for the left of center politic.
    Let us start with what is truly an indisputable fact. A corporation has a sole purpose and it is singular in nature. The goal of a corporation is to maximize shareholder wealth. Like it or not that is the sole purpose of a corporation. Now if it has stated goals beyond that which you may consider noble then fine, but anything else it purports to achieve is just bonus.
    As I’ve said before to you, the term CEO and corporation have become pejoratives in our society. Any word association exercise will undoubtedly confirm this. Your post is nothing more than a validation. CEO’s are easy targets. Here is a different list for you, one that nobody would use to show income disparity in the US. It is a list of the top paid entertainers in 2015.

    Floyd Mayweather $300M
    Manny Pacquiao $160M
    Katy Perry $135M
    Howard Stern $95M
    Garth Brooks $90M
    Taylor Swift $90M
    Cristiano Ronaldo $79.5M

    But really back to some of your assumptions. “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?” I’m sorry but this really shows an ignorance to how markets work and businesses operate. Even if a CEO took less money it doesn’t mean the corporation will be able to add employees. Corporations add employees when labor demand increases. It doesn’t matter how much I pay myself, when my business growth requires added employees I seek them out.
    When it comes to reducing CEO pay so employees can make more money I ran the numbers on GAP just because I love to shop at GAP. If their CEO actually took no salary each employ would see an increase of $9 a month in gross pay. Target was $7. That isn’t moving anyone into a different income bracket.
    My biggest issue though is with the repeated call for a living wage. Nothing shows more ignorance than when someone calls for a policy that insures a living wage. If ever adopted I will be the first to sell everything I own, move to Palm Springs and get a job at the nearest fast food restaurant and ask for my living wage.
    As I’ve said before, when Christians are truly concerned with those who make less money than they do as they are with those who make more money than they do the world will become a bit more just.

  • scott stone

    Please don’t take my rebuke as a defense of the CEO’s in question, I don’t have a clue who they are. But when you refer to them as “offenders” that tends to get my ire up. Statements like that just reinforce the narrative in this country that most CEO’s are bad, evil men. It adds to the divisiveness that I believe is poisoning our country.
    I personally don’t understand why someone would be compensated at those levels but it isn’t for me or anyone else to decide what their value is monetarily. Your comment about finding CEO’s who would be satisfied with $2M-$3M unfortunately won’t stand. There is a large segment of the population that believes if you make $1 more than they do it isn’t fair. Inevitably the call would be “why does anyone need $2M.” It is a slippery slope.
    I also have to disagree with the comparison of the Gilded Age to our current context. While I agree that the difference between rich and poor from a strictly monetary position is valid, that is not the only metric you should be using. The quality of life for those in poverty today is vastly better than the quality of life of the poor in the late 19th century. It’s not even close by a long shot. Stating we are on the verge of another Gilded Age is just hyperbole.
    I’m happy to engage in discussions around lifting up those in poverty but it is all to easy in our society to be distracted by things that have minimal impact on the problem. Shrinking the income of the dude that runs Bed Bath and Beyond isn’t going to have an impact on the homeless shelter in Green Bay or anywhere else.

  • Tim_Suttle

    Hey Scott, I always like engaging w/you around these issues because you are thoughtful about them. You’re right, I’m not an economist or an expert on corporations, so my reaction to your line of reasoning is more theological than practical.

    Here’s what I’ll say in response. Run any metrics you want. There’s no way to justify the Gap’s 705:1 pay ratio (outside of the narrative of Pharaoh & Egypt). How much more valuable is he than the common worker? 705 times? It’s absurd.

    Even if foregoing it altogether would only add $9 a month to paychecks, that’s not a justification. Correcting it might not make a huge difference in a person’s pay, but it’s still right. I don’t care about income brackets & pragmatic impacts. I’m talking about right and wrong, and it’s wrong for a CEO to earn 705 times what the common laborer makes.

    Your bit about the “indisputable facts about the corporation” seems like a move meant to shut down discussion because you know so much more about economics than I do… as though your definition of the purpose of the corporation is self-evident, God-ordained, & monolithic. It’s not. What if the purpose of the corporation is whatever its leaders say it is? We are not a slave to the way things are. We are the ones who have made them this way.

    CEO isn’t a pejorative. It’s the goal to which millions aspire.

    CEOs like those on the list are not easy targets because they are CEOs. They’re easy targets because there’s no way to describe a 1500:1 salary ratio apart from using language like offensive. Any attempt to justify this behavior would be hard to justify to Jesus.

    I actually think your line about the quality of life for today’s poor being better is a bit callous. It’s also not true. A gov’t check isn’t the same as a job. The poor might have a roof over their heads, but try living without hope. For that matter, try living as a single mom on a salary from Starbucks.

    You are wrong that nobody balks at the salaries of entertainers & sports stars. They are also completely out of control.

  • scott stone

    Thanks for the reply Tim. You know these are always difficult conversations for me because I run the risk of sounding like I’m trying to defend the indefensible. I actually hate that position. My point is we all too often miss the forest for the trees and I think this is another case of that. Please be assured that I believe my heart and, more importantly for this discussion, my head are aligned with Christ. Please forgive me but I think you are incorrect to just think theologically about this issue. It’s the practicality of the issue supported by our theology that will make a difference.

    I’d really like to address each point you made in your response starting with your points regarding Gap. First I agree there is no justification for the CEO making 705 times more than the lowest employee but what is justifiable and who gets to set the parameters? That’s a very important question to answer. One doesn’t get to say something is wrong without having a solution to defend. It goes with being part of the solution and not the problem. Secondly I think you really miss the boat on my point about adding $9 to a persons pay. There seems to be more concern with making sure the CEO isn’t paid 705 times the common worker than there is with lifting up that worker. It’s similar to my position on taxing the rich, which I’ve stated multiple time I don’t have an issue with. If the guy down the street pays a higher marginal rate than I do, how does that make my life better? It doesn’t. It just gives people the opportunity to feel better because someone is sticking it to the rich guy. There is a high degree of schadenfreude in our culture.
    On the subject of corporations I definitely have no interest in shutting down conversation. There just needs to be a baseline and like it or not a corporate entity is only beholding to shareholders. They are the ones who take the risk and invest their money in its success. If their wealth is not maximized their investment will move to one that is more profitable. I’m not saying you have to like it, I’m just saying that the function of a corporation is singular in nature and anything else is just colored bubbles.
    Finally, can the truth be callous? I’m not really sure. C’mon, you are a student of history. There is absolutely no comparison between poverty of today and that of the late 19th century. My great-grandparents immigrated from Poland and Italy in the late 1890’s. I was very close with my grandmother and marveled at the stories she told of the hardships endured by her parents. I agree with you completely on the utter despair those who live on the margin must feel. It’s why I work at trying to help improve lives in my local community. But Gilded Age because CEO’s pay is unfair, I don’t think so.
    Once again I think we want the same things. I’m genuinely pissed off that the richest country in the history of the world has a level of poverty that we do. There are so many areas that most of us could find common ground that would make an impact on the lives of those who are the least of us. I just think pointing out what CEO’s make is a distraction. Thanks for allowing me to engage.


  • Tim_Suttle

    I don’t doubt your heart on this stuff, Scott. We can disagree on this one.

    I do have a solution. The CEOs of corporations should–because they are virtuous people–not take a salary that is 705 times what the common worker makes. I don’t think there should be a law forcing them to do so. They should do it because they are part of a community/society that has built that kind of virtue into their character. I don’t think they should do it because it makes the poor person’s life better. I think they should do it because it is the virtuous thing to do.

    You might be missing the forest for the trees, too. Capitalism works for those who have capital. Wealth & capital is concentrating in the hands of fewer and fewer people in our society. Massive executive salaries (not just CEOs) are a big part of how that happens. There’s no law saying that super-personal forces (like the corporation), has to act selfishly. I refuse to be that cynical. The corporation can serve the common good as readily as the individual. It just takes leadership–the kind of leadership the CEOs on this list refuse to embody.

    I’m still going to disagree w/you on poverty today compared to a century ago, Scott. I have spent too much time in the desperately poor, violent, and despairing parts of my city. I have too many friends who live & work among them everyday. Not only that, I spent a lot of time researching and writing on the Gilded Age for the first book I wrote (An Evangelical Social Gospel). There are striking similarities between that era and ours.

    Keep pushing back, though. It’s good to disagree & you may convert me in the end!

    • scott stone

      Oh I think the only conversion may be on my part!
      In my humble opinion what we have is a binary problem. Grotesquely rich people and abhorrently poor people in this country and around the world for that matter. I just happen to believe these are mutually exclusive problems that need separate solutions for each. It’s the two State solution. We can and should address poverty in our nation far better than we currently do. That should be primary and independent of what we do about the schlub CEO or for that matter the left handed pitcher or entertainer that pulls in $100M a year. The more time we allow the anomalies to distract us, (and they are anomalies. Over 50% of all employees work for a small business and the disparity of income is not that great. I know this first hand!) is the less time we invest in those who need it the most. But then again, what the hell do I know.

      Thanks Again

  • The United Methodist Church ‘supports efforts in the U.S. Congress to raise the minimum wage to a “Living Wage” and index it to inflation.’

    UMC Book of Resolutions (#4135 “Rights of Workers”).

    Even though raising the wage to “Living Wage” would bring millions of families into the middle class save taxpayers billions of dollars and boost the economic recovery, many are fighting against it. we must push back against false claims and narratives that stoke fears about things like job loss, economic pain for small businesses, and higher consumer prices.

    Take Action “Living Wage” Toolkit:

    • scott stone

      Not sure if the UMC should be in the business of setting economic policy, especially ones that are untenable.

  • Jimbobillybob Becker

    Love the Ezekiel quote. Next time neo-cons bring up Proverbs, the line that goes ‘He who does not work shall not eat,’ Ezekiel 34 is the response.