Sunday, 20 September 2015

CEO to worker pay

CEO to worker pay is a controversial topic. It's becoming even more so with the wealth gap between those that own assets and those that rely on income widening. We believe the best companies are those that balance the needs of employees, customers and shareholders. Glassdoor a favorite site of ours shares insights into the intangible qualities of companies with employees rating their firms and CEOs. Last month Glassdoor released their estimate of CEO to worker pay. The numbers are staggering the average CEO earns 204 times the median worker pay. Retailers rank highly as the gap between CEO and staff earning minimum wage is large, surprisingly Discovery Communications topped the list. Another surprise was that the median pay at Microsoft was $137,000 (they will probably have a few more resumes sent their way). The chart can be seen below.

Typically the greater responsibility you have the greater the pay, technology seems to be the exception to this rule. I'm always impressed by CEO's who take a small salary and align themselves with shareholders by focusing on options and shares. It's a big trend in technology with Larry Page (Google) and Mark Zuckerberg (Facebook) famously earning $1 in salary. Also joining them is Kosta Kartsotis the founder of fashion brand Fossil and Richard Kinder from the pipeline company Kinder Morgan.

As always Glassdoor is only a sample beginning 2017 public companies will be required to disclose their ratio of CEO to worker pay. It will be interesting to see if CEO pay rises ahead of this deadline and just as likely falls after the disclosure.


The material in this article is for informational purposes only and in no way constitutes a solicitation of business or investment advice. The material has been prepared without regard to any client's or other person's investment objectives. Before making an investment decision you should consider the assistance of a financial adviser and whether any investment or service is appropriate in light of your particular investment needs.