
S&P 500 CEO Pay by Pay Ratio - kpmcc
https://docs.google.com/spreadsheets/d/1Rn-vkGy22ULMk8zPSZa_vObx8VoDtherQqqq_2s-oFY/edit#gid=292613888
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vecinu
This isn't a fair representation of CEO pay. Jack Dorsey is not paid
$1.40/year, his share ownership is paying him out millions per year.

What is the validity of this data set? Netflix Median Pay being lower than
Google's doesn't sit right with me.

Broadcom's Median Pay is $354k? Impossible.

Again, I'm not knocking the idea as it's a good thought exercise but it's
important to be realistic and factual when coming up with conclusions.

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rococode
A lot of companies with <$15k median pay as well. Seeing as US federal minimum
wage is ~$15k (higher than that in more than half of states) and there are
companies listed with even <$10k median pay, either part-time or outsourced
workers are being included, neither of which seems like a fair comparison to
make.

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kpmcc
Why don't you think it's fair? Legit ask, not a snipe.

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azinman2
Because it must include labor in other countries where the pay scale is very
different. A barista at Starbucks in NYC is going to have a different income
than one in Vietnam. By making these all US companies, you are comparing the
CEO pay of an American against an average of global norms which are far lower.

It would be useful (to me) to include another column that's just the median
pay of US-based employees.

Another interesting tact would be to show what a Vietnamese CEO makes versus
their company's median pay, or what this looked like in the US in 1950, for
example.

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refurb
Seems like a bad way to measure. You're heavily penalizing CEOs who lead
companies with low median wages.

If I wanted to see if CEO wages were unjustifiably low or high, I'd look at
things like total revenue, profit, stock price growth, etc. Then you could at
least tell if pay is linked to performance.

~~~
txcwpalpha
> You're heavily penalizing CEOs who lead companies with low median wages.

I have a feeling that this is the entire point.

edit: to be clear, I disagree with it because it's a terrible way to measure
what I _think_ OP is trying to measure. As another commenter mentioned, this
simple ratio doesn't tell the whole story.

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refurb
So whether or not a CEO is "overpaid" depends on their business model?

Hire a part-time janitor at $15k and you look like Mr Burns, but out-source it
so your next lowest paid employee is making $150k and you look like a saint.

But nothing's change with how much the CEO is paid.

~~~
txcwpalpha
Correct, and that's the entire point.

I think what you're missing is that this particular metric doesn't care about
performance of the company or if the CEO "deserves" that much money or not,
and that's by design. When people compare the pay of a CEO to the pay of their
employees it's typically because the _entire point_ of the comparison is to to
draw judgement on the CEO's business model.

For example, a common example where this metric is used is to cast judgement
on the owners of Walmart for being multi-billionaires while their employees
make near minimum wage. The point is not to say anything about the specific
performance of those owners or of the employees (and often intentionally
ignores it as a factor), but rather to specifically call attention to the
disparity in distribution of wealth within the company and to cast judgement
on the business model where one person gets rich while depending on the work
of people who remain poor.

Again, I don't agree with the use of this tactic to measure anything. I'm just
explaining why its done.

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chadash
Some of these numbers seem to be off. For example, Harley Davidson has a
_median_ pay of $187k? Where is that coming from? They've got 5000
employees... I assure you that 2500 of them aren't making more than $187k.

Meanwhile at the other end of the spectrum is Gap, with a reported median pay
of ~$6k. This seems very low. At first I thought that maybe the overwhelming
of their employees are oversees working in factories, but then I looked up
their SEC filing and they don't manufacture their clothes. I'm assuming they
have a bunch of part-time employees, but even then, $6000/year assuming
$10/hour means employees are working an average of 11 hours per week, which
still seems low.

~~~
azinman2
Perhaps it should compare against the hourly wage to factor these concerns in.

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dalrympm
It would be great if there were a clear definition of what "pay" means. Sundar
Pichai's pay includes his $240m stock package granted in 2019. That's a
truckload of stock but is that to be considered pay?
[https://www.theverge.com/2019/12/20/21031629/google-ceo-
sund...](https://www.theverge.com/2019/12/20/21031629/google-ceo-sundar-
pichai-pay-package-amount-alphabet-compensation-stock)

~~~
txcwpalpha
Meanwhile, Bezos's pay on this is listed at $1.7 million/year, which seems
off, even if it is some form of _technically_ correct.

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riknos314
The $1.7million reflects not the increase in Bezos' net worth, but the cost of
Bezos' employment to the company (salary + security and transportation). This
is what actually shows up in expenses in Amazon's financials.

AFAIK, Jeff hasn't gotten a stock grant since the IPO in 1997, so the vast
majority of his net worth gains are purely capitol gains from holding amazon
stock for over 20 years. Since there have not been additional stocks granted,
this increase in Bezos' wealth actually costs Amazon nothing, not even
dilution, as it's just an increase of value of existing shares.

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klahtnun
Another way to think about this is how much the CEO is actually taking vs
others. If the Aptiv CEO worked for free, giving his $15 million pear year to
the 147k employees that would only be $100/year per employee. Meaningless.

Aptiv spends $1 billion per year on salaries.

So the very "worst CEO" (by this metric) receives 1.40% of all salary paid by
the company. Google's CEO receives is 1%.

I think this explains why CEOs make so much relative to an individual. Paying
them 1% of all salaries feels, and is, very cheap given how important their
role is.

If Steve Jobs had been paid 50% of all salary it would have been worth it to
shareholders. Of course lots of bad CEOs get paid huge amounts as well but why
is this bad? The salary they received is not what hurts the company, it only
cost around 1%. What really hurts is the damage a bad CEO does to the company.
That can cost the entire resources of the company.

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ncmncm
Big surprise to me is Broadcom paying median $354k.

Second biggest surprise is Valero. I imagine they contract out most of the
work, so have few employees. (Correction welcome.)

Alphabet at $259k seems high. I wonder if the median includes any actual
Google/Youtube/etc. employees, or only Alphabet management.

~~~
dvirsky
The Alphabet number includes RSUs, so definitely the actual median pay for all
employees. See [https://www.wired.com/story/what-tech-companies-pay-
employee...](https://www.wired.com/story/what-tech-companies-pay-
employees-2019/)

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ganstyles
This is cool. I was less interested in the ratio and more interested in the
median pay at places. Some places I’ve never heard of have a significantly
higher median pay than my company! And I’m pretty surprised at how high median
pay is at FAANG

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modeless
Shouldn't Jack Dorsey's pay be $2.80 now?

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el_nahual
Contrarian viewpoint: Having a CEO make ~1,000x the median wage doesn't seem
that _practically_ wrong to me, seen from a lens of "At most of these places,
if the CEO messes up many, many thousands of people will lose their jobs." Ie,
if one thinks of "right" compensation as being proportional to impact, not to
skill or job difficulty.

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fizwhiz
What's the source of the median pay data that the ratio seems to be completely
based on?

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umeshunni
Especially since most widely reported pay data is base salary only and not
stock.

~~~
fizwhiz
Exactly. Also, Broadcom on this list seems to have one of the higher median
pays of $354k. Paysa seems to disagree
[https://www.paysa.com/salaries/broadcom](https://www.paysa.com/salaries/broadcom)

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ivalm
The low ratio end up being founders since they benefit from large ownership
share.

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pmart123
This is a bad way to do this. There's executives with multiple c-suite roles,
compensation for multi-year performance targets, founders who elect to take
low salaries and company size disparities.

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WarOnPrivacy
I like how most of the 6 figure employee salaries are clustered around the
lower ratios - evidencing that top employee pay isn't at all dependent on top
CEO salaries.

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davidivadavid
Although such ratios are fun for headlines, it might be more interesting to
look at company-level Gini ratios for a better picture of inequalities.

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fbelzile
I'm not sure this ratio is very useful unless you also account for
dividends/stock options paid out to shareholders.

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benkuhn
Interesting that the top of the list is more or less companies ranked by
median pay ascending (give or take), plus Google.

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kpmcc
The data is scraped from this (which is paywalled, apologies):
[https://www.wsj.com/graphics/ceo-pay-for-the-
sp500/?mod=hp_l...](https://www.wsj.com/graphics/ceo-pay-for-the-
sp500/?mod=hp_lead_pos10)

Edit: Seeing a lot of people complaining about the data quality. A lot of the
more interesting breakdown on salary vs stock etc was only available by
clicking on each row. Maybe a more advanced scrape could reveal that stuff.

~~~
coderintherye
This is a great idea and the Google Sheet share is a great format, but there
are many flaws in the representation of the data. A great, immediate change
would be to add a row at the top indicating some of the flaws, and then start
making incremental changes to fix them (e.g. create a column for stock based
compensation).

Cause overall this is a great topic, just needs some work so people can focus
on the topic at hand rather then get bogged down in the data quality issue.

~~~
kpmcc
Appreciate it. Meant it mostly as a "Wow didn't know X company had 1000 to 1
CEO to median pay ratio". I'll see if I can get some more data / detail on
what goes into the pay numbers.

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gok
Seems to exclude stock based compensation?

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derpistan
Sundar Pichai does not make a quarter billion per year in salary, almost all
of it is in stonks.

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outside1234
Sundar makes $280M a year!?!?!?

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crb002
No surprise that Warren Buffet is paying himself a reasonable salary.

~~~
crimsonalucard1
Like someone else mentioned that's not a fair representation.

Warren is paid in growth of his net worth.

