Some execs paid more than 1,000 times more than average workers

Even at businesses where median pay is less than $10 grand, CEOs make million$

As a teen, I worked well more than 40 hours a week at Six Flags Over Texas one summer.

One week, I slaved flipping burgers in the Texas heat and trying to run a juice stand for 77 hours. The theme park didn’t even pay me more for overtime. I was a seasonal employee so they could work me to death and not pay what they should.

It seems not much has changed since I was a teen. Robert Iger, the CEO of Walt Disney, the largest theme park operator in the world, pulled in $65.6 million in compensation in 2018, almost double from the previous year. That was 1,424 times what the theme park business claimed its median worker earned, about $46,000.

Now, I know most Disney workers are part-time seasonal employees who make nowhere near $46,000 a year. The median pay figure that Six Flags gave of almost $10,000 is likely closer to reality. Using that figure would result in Disney’s CEO raking in about 6,500 times more than the regular employee.

Six thousand five hundred times. Think of that next time you’re enjoying the rides at Magic Kingdom or Epcot. Even if you take a three-year average compensation, Iger still took in $48.6 million a year.

Image for post
Image for post
Disney World is a magical place, especially if you are an executive there. [Shay photo]

At least three other execs of the company with the Mickey Mouse mascot made $10 million or more last year. That’s at least 1,000 times more than the average worker. At Six Flags, the CEO only made something like 700 times more.

Anyways, I found this out by looking through public SEC filings of proxy statements. These public companies now have to disclose how much more they pay their CEOs than their median workers.

Some figures are eye-opening, to say the least.

In 2017, CEO pay at the Standard & Poor’s 500 large companies rose 6.4 percent to an average of almost $14 million, while the average worker saw an increase of 2.6 percent to $38,613, according to the AFL-CIO.

Hock E. Tan, CEO of high-tech firm Broadcom, topped the 2017 list with compensation of $103.2 million, mostly in stock awards. That salary was 507 times the median pay of the company’s employees, well above the average ratio of around 100 to one. While his compensation was down to $5 million in 2018, at least four other Broadcom executives made more than $5 million last year, according to public SEC filings.

Stephen Easterbrook, Mickey D’s CEO, took in almost $16 million last year, which was 2,124 times the median pay. The median was a part-time worker in Hungary who made $7,473.

Remember, median pay means half of McDonald’s workers make less than $7,473. That may sound about right to some when you factor in international fast-food sites, some of which are adjusted out in computations that don’t seem to have much standards from company to company. It still sounds low to me.

The median pay at retail stores like Five Below was even less than that, while their CEOs still make millions.

Some companies, such as Weight Watchers, have CEO pay ratios even higher than McDonalds. Others have some at zero, claiming CEOs did not accept a salary. But that was usually done to offset hefty compensation in previous years, and other execs made much more than the median-paid employee. In those instances, either a three-year average or the highest paid exec was used in the following chart.

I used a three-year average if the previous years were significantly different from the most current one.

Data on these and other companies:

Business …………..… CEO pay …………. Median worker … CEO Ratio

Weight Watchers … Mindy Grossman $33.4M ... $6,013 ……….. 5,908/1
McDonalds … Stephen Easterbrook $15.9M … $7,473 ………... 2,124/1
Walmart …….. Douglas McMillon $22.8M…… $19,177 …….…. 1,188/1
Walt Disney …… Robert Iger $48.6M* ………… $46,127 ……… 1,052/1
Six Flags …… James Reid-Anderson $8.9M* .… $9,964 …………… 895/1
Dollar Tree …….. Gary Philbin $7.4M* …………. $10,695 …….….. 688/1
Five Below …... Joel Anderson $3.3M* ……….… $6,572 ……….…. 626/1
Target ……….. Brian Cornell $12.2M ……..…… $20,581 ………….. 592/1
Google ………. Sundai Pichai $100.6M* ……… $197,274 ……..…. 509/1
Comcast …….. Brian Roberts $32.5M ………... $71,006 ………….. 458/1
General Motors ... Mary Barra $22.0M …….…..$74,487 ……..…… 295/1
Broadcom …….. Hock Tan $44.3M* ……..….. $202,915 ………….. 217/1
Lockheed Martin … Marillyn Hewson $21.5M ... $112,527 ……… 191/1
Chicago Tribune … Peter Kern $8.4M ………….. $55,673 ………… 151/1
Twitter ………….. Ned Segal [CFO] $14.3M … $161,860 ………….. 87/1
Nathan’s Famous .. Eric Gatoff $1.2M …………. $18,111 ………….. 64/1
New York Times … Mark Thompson $6.1M … $146,636 …………… 42/1
Go Daddy …….… Blake Irving $2.0M ….…… $65,391 …………….. 31/1
*Three-year average, 2015–17 or 2016–18

As a business reporter for more than 20 years, I’ve heard many reasons why CEOs make so much.

Most come down to stock market awards. Still, some observers believe that when most workers make less than $10 grand annually at a business, the executives should not be making $16 million or so.

Some other trends that stand out from the data:

  • Most large publicly traded companies have more than the CEO making significant compensation. Sometimes the chairman or CFO makes more than the CEO.
  • It’s hard to believe that Warren Buffet, as well as the CEOs of Twitter and other companies, make less than the median-paid employee, as they claim on government filings. They must have other compensation in previous years or some other way they are paid, such as stock shares, that is not noted.
  • It’s weird for execs at a Dollar Tree to make millions. That means they are either not paying employees enough or that even at a dollar, you’re overpaying for that roll of paper towels or container of laundry detergent.
  • Media companies may look better than many on CEO pay. But the median employee pay claimed by The New York Times is significantly higher than expected. The Tribune’s figure seems closer to reality.
  • Comcast has at least four execs making more than $20 million a year. Remember that the next time you get your bill.

With such a pay scale, it’s little wonder that annual earnings of the wealthiest 1 percent of Americans climbed six times faster than the 90 percent of people in lower-income brackets between 1979 and 2015. That’s what Elise Gould, a senior economist with the Economic Policy Institute, said during a late March hearing before the U.S. House Ways and Means Committee. For those at the very top 0.1 percent, earnings jumped 15 times more.

“Income inequality is the primary reason why the vast majority of Americans experienced disappointing growth in their living standards over the last four decades,” Gould said. “Most Americans are seeing slow income growth because most of overall income growth is going to households at the top.”

Furthermore, productivity grew six times faster than hourly pay between 1979 and 2017. In other words, most workers are doing more and effectively making less.

Gould tied the earnings stagnation to the declining influence of labor unions and not adjusting the minimum wage for inflation. Of course, that is not the entire story. When I went to college in the late ’70s and early ‘80s, paying something like 10 times less than my son does now, I could still get grants. Ronald Reagan and other Republicans cut many of those grant programs in favor of loans. To many, that was a signal that keeping you in debt and funneling fees to banks and other lenders were more important than helping students gain a college education.

If the 1970s was the so-called Me Decade, the 1980s was the Me First Decade. And the 1990s was the Me First 2.0 Decade.

Of course, many politicians don’t want to see unions strengthened or minimum wages raised. Donald Trump’s tax plan, passed in late 2017, will give most benefits to corporations and the wealthy, according to the Institute on Taxation and Economic Policy. Taxes for the wealthiest 5 percent of Americans declined about 3 percent in 2018 but much less for the rest of Americans.

By 2026, the poorest 20 percent of Americans will even pay a little more in taxes, if the plan is not changed. Corporations will keep paying less since the corporate rate was slashed to 21 percent from 35 percent.

Moreover, about 11 million taxpayers are losing out on state and local tax deductions — which are now capped at $10,000 — worth more than $300 billion, according to a report by the U.S. Treasury Inspector General for Tax Administration.

These are extreme times. And they seem to only be getting more extreme. But hey, enjoy the Mickey Mouse rides, if you can afford it. And try not to think about how much the execs are making.

Written by

Written for 45+ newspapers/mags. Written some books — see https://www.amazon.com/Kevin-J.-Shay/e/B004BCQRTG. Visited 48 states, 30+ countries.

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store