To do that, the team first sifted through 2014 Fortune 500 SEC filings to find out how much the CEO at each company earned in a year.
The chief executives of some of America’s biggest corporations earn an average of 204 times the pay of their median workers, according to a Glassdoor analysis of regulatory filings and self-reported salaries by employees at those companies (see chart at bottom).
The Glassdoor study found the average CEO received $13.8 million, while the median worker at those CEO’s companies made an average of $77,800. That’s significantly less than past average ratios calculated by the AFL-CIO or the Economic Policy Institute, where the ratios topped 300 times median worker pay and were calculated using worker pay data from the Bureau of Labor Statistics. These surveys ask users to share details about their salary, bonuses, profit sharing and other pay in exchange for other insider information on the company.
Facebook had the fourth lowest ratio at 4. Also in the top 5 are CVS Health ( ratio 1,192), Walmart (1,133) and Target (939).
At Oracle Corp., Larry Ellison, who recently left his CEO role to take over as chief technology officer and chairman of the board, took in 573 times more than his median employee income, making a whopping $67.26 million in 2014. His median worker got $153,150, Glassdoor said.
Yahoo’s ratio: 307: CEO Marissa Mayer was paid $42 million, and the median worker pay was about $137,000.
Apple’s ratio: 251. CEO Tim Cook’s compensation was $9.2 million, compared with median worker pay of $36,760. “In recent years, a number of studies have highlighted the gap between CEO pay and average salaries for workers”, wrote Glassdoor chief economist Andrew Chamberlain in a statement about the research.
Still, Chamberlain says that while they are clear they may not have a full distribution of job titles, its figures offer a reliable estimate, especially with these caveats in mind.
“It will be one more arrow to sling at companies”, he said.
He also says to make a fair comparison, Glassdoor compared total CEO pay to total worker pay.
Although Glassdoor is not the first to publish estimated CEO pay ratios, the company said it has collected “thousands” of salary reports over the years from employees to encourage pay transparency in the workplace, giving it a “unique window into worker pay”.
Glassdoor’s report comes as more investors grumble about executive pay. To ensure statistical validity, only companies with 30 or more Glassdoor salary reports shared by employees during this timeframe are included, which was available for 441 of the S&P 500 companies.
Investors who want to keep advocating for lower executive compensation – and people who want to improve worker pay – will eventually have more ammunition. The new rule requires the nation’s 4,000 publicly traded companies to disclose the ratio of the CEO’s annual total compensation to the median compensation of the company’s employees.
On average, CEOs make 204 times what workers are paid, report says