CEOs Shatter Employees' Pay

July 7, 2006

The average CEO earns more in one day than the typical paid employee earns in a year, according to a report by the Washington-based think tank Economic Policy Institute. Today’s CEO earns 262 times the pay ($10,982,000) of a typical worker ($41,861), according to the report, which was mentioned today on MSN.

That pay gap is the second-highest in the 40 years for which data are available, reports the Economic Policy Institute, a Washington-based think tank.

American CEOs fared even better in 2000, when they made an average of 300 times the salary of their workers.

Executive pay has become a hot-button issue with shareholders around the country.

A study released earlier this year by the Corporate Library — and titled “Pay for Failure” — singled out some of the corner suite’s worst offenders. Among them: Pfizer (PFE, news, msgs) CEO Henry McKinnell; Merck (MRK, news, msgs) former CEO Raymond Gilmartin; and AT&T’s (T, news, msgs) Edward Whitacre.

The article failed to mention why CEO salaries have exploded in recent years. In 1965, CEOs typically made “only” 24 times their average worker. I know they are a big reason why a company succeeds or is run to the ground, but damn. How much more compensation do they need when they work on the backs of their employees?