Study: Big company CEOs make $1.3 million more than their employees, on average
If you work at one of America's biggest companies, the gap between what you earn and your CEO's salary could be mind-boggling.
According to a recent study from job search website Lensa, the CEOs at 100 of the country's largest companies make roughly $1.28 million more per year in salary than their average employee.
It's the latest example of the country's growing CEO wage gap. In August, Washington D.C.-based think tank Economic Policy Institute estimated that CEO compensation had grown by 1,322% since 1978, compared to just 18% for overall compensation.
Lensa's report, published last month, identifies companies with large differences between CEO salary and median employee salary. It uses the Forbes' Global 2000 list for reference, excluding companies that haven't made their CEO salaries or median employee salaries public.
The biggest gap belongs to beverage giant Coca-Cola, where CEO James Quincey's base salary of $1.6 million in 2020 was 14,007% greater than the company's median employee salary of $11,342.
That latter number seems low — for comparison, U.S. federal minimum wage equates to an annual salary of $15,080, based on 40-hour workweeks — but it was confirmed by Coca-Cola's April proxy statement, which described its median employee salary as belonging to "a part-time, hourly" worker in the U.K.
It would take 141 employees making Coca-Cola's median salary to equal Quincey's annual salary, Lensa's report noted. And that's just his salary, rather than his total 2020 compensation of $18.3 million, which included factors like stock and option awards.
Here are the 10 companies with the largest gaps between CEO base salary and median employee salary in 2020, according to Lensa's report:
- Coca-Cola (14,007%): CEO James Quincey, $1.6 million salary; median employee salary of $11,342
- Starbucks (12,617%): CEO Kevin Johnson, $1.54 million salary; median employee salary of $12,113
- Chipotle Mexican Grill (8,378%): CEO Brian Niccol, $1.2 million salary; median employee salary of $14,155
- Viacom (7,571%): CEO Robert Bakish, $3 million salary; median employee salary of $39,110
- Walmart (5,974%): CEO Doug McMillon, $1.27 million salary; median employee salary of $20,942
- Lowe's Companies (5,805%): CEO Marvin Ellison, $1.45 million salary; median employee salary of $24,554
- Target (5,606%): CEO Brian Cornell, $1.4 million salary; median employee salary of $24,535
- Kroger (5,348%): CEO W. Rodney McMullen, $1.34 million salary; median employee salary of $24,617
- Apple (5,092%): CEO Tim Cook, $3 million salary; median employee salary of $57,783
- Home Depot (4,646%): CEO Craig Menear, $1.3 million salary; median employee salary of $27,389
The report also breaks down the smallest CEO wage gaps at America's largest companies. Some surprisingly high-profile names top that list: For instance, Elon Musk's annual salary checked in at 59% less than Tesla's median employee salary of $58,455 in 2019, the last time Musk received a base salary of more than $0.
But that's a misleading number.
The vast majority of Musk's total compensation came from stock options, based on a unique compensation plan approved by Tesla shareholders in 2018. Musk, whose net worth of $267 billion makes him the world's richest person, received $6.7 billion in stock compensation last year, according to Bloomberg.
Similarly, billionaire Warren Buffett appears on the smallest wage gap list in a misleading way.
Buffett took home his usual $100,000 in base salary last year from his investment firm Berkshire Hathaway, where the median employee salary is $68,543, Lensa notes. That means Buffett's base salary was just 46% more than the typical Berkshire employee's salary.
But including other forms of compensation, like the company's spending on Buffett's personal security, the investor's total compensation topped $380,000, according to Berkshire's proxy statement.
Bloomberg estimates Buffett's current net worth at $102 billion.
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