The first comprehensive study of the massive pay gap between the US executive suite and average workers has found that the average CEO-to-worker pay ratio has now reached 339 to 1, with the highest gap approaching 5,000 to 1.
The study, titled Rewarding Or Hoarding?, was published on Wednesday by Minnesota’s Democratic US congressman Keith Ellison, and includes data on almost 14 million workers at 225 US companies with total annual revenues of $6.3tn.
Just the summary makes for sober reading.
In 188 of the 225 companies in the report’s database, a single chief executive’s pay could be used to pay more than 100 workers; the average worker at 219 of the 225 companies studied would need to work at least 45 years to earn what their CEO makes in one.
It also shows how some of the most extreme disparities in CEO-to-worker pay exist in industries that are considered consumer discretionary, such as fast food and retail, with a 977 to 1 disparity, one of the widest gaps.
“Now we know why CEOs didn’t want this data released,” says Ellison, who championed the implementation of the pay ratio disclosure rule as it was written into the Dodd-Frank financial reform bill of 2010. “I knew inequality was a great problem in our society but I didn’t understand quite how extreme it was.”
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