How Your Pay Stacks Up to Your CEO’s
Executive compensation in the U.S. has never been higher, with the average S&P 500 CEO making more than $10 million annually. This year marks the first time U.S. publicly traded companies must disclose how much they pay their chiefs compared with the median worker. The 2010 Dodd-Frank Act requires that businesses disclose the ratio in regulatory filings for fiscal years starting on or after Jan. 1, 2017, with some exceptions.
The ratio is calculated by dividing the CEO’s compensation by the pay of the median employee, meaning half of a company’s workers make more and half make less. Honeywell International Inc., which was one of the first large U.S. companies to disclose it, had a ratio of 333-to-1 last year. The ratio at Hanesbrands Inc. was 1,830-to-1 while Zynga Inc.’s Frank Gibeau had a ratio of 12-to-1. These are the companies that have filed, including those with the median, lowest and highest CEO pay ratios.