Pay Ratio of Top 10 US CEOs Thousand-to-One of Average Employees

Income inequality as expressed by CEO-to-worker-pay has become a topic of interest both in the U.S. and Israel. The multiples of a CEO’s salary of the average employee of the CEO’s organization is known as as the CEO pay ratio.

Almost three years after the U.S. Congress ordered public companies to reveal actual CEO-to-worker pay ratios under the Dodd-Frank law, the numbers remained unknown in the U.S. As the Occupy Wall Street movement and 2012 election made income inequality a social flashpoint, mandatory disclosure of the ratios remained bottled up at the Securities and Exchange Commission, which hasn’t yet drawn up the rules to implement it. Some of America’s biggest companies are lobbying against the requirement.

The Economic Policy Institute put the CEO pay ratio to average workers salaries of the top 350 U.S. companies by sales as 231:1 in 2011.  It has been estimated as high as 354:1 by the AFL-CIO.  American CEOs were said to earn 26 percent more than their foreign counterparts in an article in the Atlantic Magazine.

Bloomberg magazine recently tabulated their own calculation of CEO-to-worker-pay data.  What is interesting is that in 2011 and 2012 of the ten highest ratio to worker pay CEOs in the U.S., six, David Simon, Larry Ellison, Howard Schultz, Leslie Moonves, Ralph Lauren and David Zaslav are of American Jewish origin.  Their combined average CEO ratio is 1,173:1 about five times the estimated average of 231:1 of all U.S. CEOs of the 350  largest companies in terms of sales.  The four non-Jewish origin CEOs of the Bloomberg top ten had a higher, 1326:1 CEO-to-worker-pay ratio, six times the estimated U.S. average.

One is conflicted if this new Jewish statistical nugget should be pointed out, as top CEO pay ratios are not exactly Nobel Prizes, but it also reflects a certain cultural and political dynamic that is ignored as one’s peril and at the peril blinding us to societal forces and change.  Admittedly, it’s harder to analyze data about CEO’s who are more modest in their salary ambitions, but that is also a characteristic of the American Jewish community that may need to be analyzed, perhaps in the realm of the not-for-profit organizational world, where Jewish American are well represented, rather than the for-profit arena.

About the Author
Pini Herman, PhD, is a principal of Phillips and Herman Demographic Research based in Los Angeles; He specializes in demographics, big data and predictive analysis; He has been affiliated with the University of Southern California Dept.of Geography, the USC School of Social Work, and served seven years as Research Director at the Jewish Federation of Greater Los Angeles.