A friend of mine sent me an article from MSN that talks about CEO wages relative to the “Average Joe’s” wages. I’ve heard similiar information before but this one reminded me of how different someone’s life is down in the trenches as compared to an average CEO of a Fortune 500 company.
A few of the statistics from the article:
- The CEO’s at the biggest U.S. companies last year made as much money in a single day as the average worker made for the whole year.
- Top execs at Fortune 500 companies averaged $10.8 million in total compensation in 2006
- The average worker made $16.76 an hour which worked out to $29,544 for the year
- The top bosses at the top 20 investment shops earned an average of $657.5 million for the year
- Many workers got a break on July 24th when the minimum wage was increased from $5.15 to $5.85 (do you detect any sarcasm in my typing?)
- The minimum wage is 7% below where it was 10 years ago when adjusted for inflation
- CEO pay has gone up 45%, adjusted for inflation, in the same period
- CEOs at S&P 500 companies retire with an average of $10.1 million in their supplemental executive retirement plans
- Only 36% of American households headed by someone over 65 had a retirement account in 2004. They had an average of $173,552 in those accounts
Anyway, I’d recommend reading it. It is pretty interesting.
http://articles.moneycentral.msn.com/Investing/CompanyFocus/IsACEOWorth364TimesAnAverageJoe.aspx
Great post. I love the information you presented here.
I’m not sure it’s meaningful to only compare CEO salaries from the fortune 500 companies.. My mom was CEO of a very small company. Her salary was perhaps 5% – 10% higher than a typical worker, which made sense because she had only a handful of employees.
On the other hand somebody who’s working at a company with 200,000 employees has a lot more responsibility, and the company has a lot of minimum-wage employees doing menial labor. Comparing the salary of someone responsible for overseeing tens of billions of dollars of revenue with the salary of the janitor seems odd.
There are a lot of CEO’s that forego their salary or donate it all to charity. Maybe if more publications went out of their way to praise those CEO’s, other CEO’s might do it too so they can join the ranks of “the noble”. No one is gonna pass up a huge salary without sufficient motivation to do so.
Also, a lot of those “average workers” are also stockholders (via ESOP, 401k, etc.). That means those workers have voting rights, so it’s not as if all workers are without a say in how much the CEO makes.