AEI reports that Comrade Sanders' 300 to 1 ratio just isn't so:
Every time CEO salaries are reported for S&P 500 companies, there’s always a lot of hand-wringing and criticism of “excessive CEO compensation,” along with the inevitable comparisons of rising CEO salaries to stagnant pay for average workers, and how that contributes to rising income inequality and an increasing concentration of wealth for the top 1%, etc. In about a month, we’ll hear the annual lamenting from the AFL-CIO about skyrocketing pay for a small group of the nation’s highest paid CEOs, America’s income inequality crisis resulting from corporate CEOs taking all of the wage increases while giving nothing to rank-and-file workers, and how the pay gap between CEOs in the S&P 500 and the typical American worker has widened to some ratio like 373-to-1 (as the AFL-CIO reported last year, see “CEO Pay Continues to Skyrocket”).Socialists sure are liars.
We can get a more accurate and complete picture of CEO compensation by looking at wage data for all CEOs, not just a small handful, just released by the Bureau of Labor Statistics in its annual report on Occupational Employment and Wages for 2015. The BLS report provides “employment and wage estimates by area and by industry for wage and salary workers in 22 major occupational groups,” including the category “chief executives.” In 2015, the BLS reports that the average pay for America’s 238,940 chief executives was only $185,850. Looking at a smaller group of “chief executives,” who according to the BLS manage “companies and enterprises” (a group that is more comparable to the S&P500 CEOs than all “chief executives”), the 20,620 CEOs in that category earned an average salary last year of $220,700 (data here). Whereas most comparisons of CEO pay to average worker pay only consider the CEOs of the S&P 500 companies (or 2.4% of the total reported by the BLS), this larger sample of more than 20,000 CEOs reported by the BLS gives us a much better understanding of “average CEO compensation.”
The chart above shows the annual ratio of average CEO pay for the more than 20,620 CEOs who head companies and enterprises to the average annual pay of full-time workers based on BLS data for all occupations. For 2015, the average CEO earned $220,700 and the average full-time worker earned $48,320 (data here), for an Average CEO-to-Average Worker Pay ratio of only 4.56-to-1 – the same as the previous three years, and actually slightly lower than the peak ratios of more than 4.6-to-1 in both 2010 and 2011.
