Chief Executive Officers (CEOs) make more money as a company gets larger but the median employee becomes poorer according to a survey of 356 public companies by Equilar, a board of directors services provider.
The largest difference in pay between a CEO and the median worker is in retail and hospitality companies at 350:1. Energy companies have the least disparity in pay levels and at 72:1.
It pays to work for smaller companies with less than 2,310 employees, they have the highest median worker wage at $85,580 and the lowest CEO pay ratio at 45:1.
If you are a CEO at a less than $1 billion revenue company you can earn a big jump in pay if get a job at $15 billion plus company - from 45:1 to 263:1.
Equilar conducted the anonymous survey in advance of a new SEC ruling requiring public companies to begin releasing CEO pay ratios in their proxy statements.
The results provide a preview of the disparity in CEO pay levels in each industry.
Matthew Goforth, Senior Governance Advisor at Equilar, who led the survey collection and data analysis. "We know that compensation is not monolithic, and this survey-and eventually, the required disclosure-starts to shed light on that."
Across all 356 companies the CEO Pay Ratio is 140:1 and the median employee pay is $60,000. Therefore the median CEO pay is $8.4 million.
Equilar is concerned about stagnating median employee pay levels since 2008 compared with rapid pay rises for CEOs.
The SEC ruling will provide transparency but it is not known how this will affect the share prices of companies. There are many large foreign companies trading in the US.
Equilar concedes that company strategies such as outsourcing workers makes it difficult to make direct comparisons between companies in the same industry. A survey on pay ratios of Chief Financial Officers is next.
There are several more interesting insights into CEO pay ratios in the report here: