Average CEO pay for major U.S. companies rose more than 6 percent last year, as income inequality and outsourcing of good-paying American jobs increased. According to the new AFL-CIO Executive Paywatch report released today, the average CEO of an S&P 500 Index company made $13.94 million in 2017 – 361 times more money than the average rank-and-file worker.
The Executive Paywatch website, a comprehensive online database tracking CEO pay, showed that in 2017 the average production and nonsupervisory worker earned about $38,613 per year. When adjusted for inflation, those wages have remained stagnant for more than 50 years.
“This year’s report provides further proof of America’s income inequality crisis,” said AFL-CIO Secretary-Treasurer Liz Shuler. “Too many working people are struggling to get by, to afford the basics, to save for college, to retire with dignity, while CEOs are paying themselves more and more. Our economy works best when consumers have money to spend. That means raising wages for workers and reining in out-of-control executive pay.”
For the first time, companies must disclose the ratio of their own CEOs’ pay to the median pay of their rank-and-file employees. The newly updated Executive Paywatch website now includes company-specific pay ratio data and median worker pay in addition to CEO pay levels. Pay ratio disclosure sheds a light on companies’ compensation strategies and helps shareholders figure out whether CEO pay is out of balance compared to what a company pays its rank-and-file workers.
Mondelez International continues to represent one of the most egregious examples of CEO-to-worker pay inequality. The company, which makes Nabisco products such as Oreos, Chips Ahoy and Ritz Crackers, is leading the race to the bottom and continues to embrace inequality.
According to its Securities and Exchange Commission filings, former Mondelez CEO Irene Rosenfeld received $17.3 million in 2017 – 403 times the median pay of rank-and-file employees. Mondelez also had a new CEO start in 2017. Dirk Van de Put made more than $42.4 million in total compensation in 2017 – more than 989 times the median rank-and-file employee pay. Last week, a majority of Mondelez shareholders rejected the company’s advisory vote on executive compensation.
Toy-maker Mattel had the most egregious pay ratio of any S&P 500 company. Mattel’s median employee pay – for manufacturing workers in Malaysia – was $6,271, resulting in a CEO-to-employee pay ratio of 4,987:1.
Investor Warren Buffett’s company, Berkshire Hathaway, Inc., had the lowest pay ratio of all S&P 500 companies, just 2:1.