CEO salary is booming! Just ask anyone in the mainstream business press. Sigh. If only.
For instance, The New York Times recently wrote: “Want to Make Money Like a C.E.O.? Work for 275 Years”
Actually, our annual deep dive on C-Suite compensation, just completed, finds private company CEO pay has largely flatlined. Median base salaries went from $244,000 in 2011 to just $250,000 in 2016. Bonuses, meanwhile, have edged up from $71,000 in 2011 to a projected $100,000 for 2017.
“Despite headlines that focus on the large and rapidly rising compensation packages of the CEOs of the largest public companies, the reality is that the vast majority of CEOs in the U.S. run small and mid-market privately owned companies—and most earn comfortable but not excessive salaries and bonuses,” says Wayne Cooper, executive chairman of Chief Executive Group, who runs the company’s annual survey.
Not everyone is stuck in the mud, however. In the top pay quartile, salaries jumped from $270,000 in 2011 to $350,000 in 2016 and are projected to hit $357,000 for 2017. Bonuses among the nation’s best-paid executives more than doubled over the period.
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While The Times would have you believe it will take hundreds of years for the average worker to earn what his CEO would make, the reality is different. The Bureau of Labor Statistics pegs 2017 median earnings for all occupations at $50,620. Going off our numbers, this is a CEO-to-worker pay ratio of 7.14. A gap, to be sure (yes, people who run companies make a lot more than most people who work at companies) but hardly the story-topping 4,987x at Mattel for former CEO Margaret Georgiadis, who left the company after vastly underperforming the market.
Also, for the vast majority of America’s company chieftains, there’s been little pay recovery in this recovery. CEO salary has not up, similar to all employees. “Most companies remain cautious and are keeping a lid on salary inflation for all employees,” says Cooper, “including those in the corner office.”
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