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Friday, February 10, 2012

Economy CEO-to-Worker Pay Ratios

Posted by Charles Mudede on Fri, Feb 10, 2012 at 8:34 AM

What was discovered when Payscale examined the CEO-to-worker pay ratios in Fortune 50 corporations? UnitedHealth Group looks like Nigeria: 1737 to 1; and Microsoft looks like Sweden: 13 to 1.

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"When calculating a CEO's total cash compensation for the fiscal year we count the following: salary and cash bonuses; other compensation, such as vested stock grants; and stock gains, the value realized by exercised stock options."

Seems like they do factor in other compensation.

Posted by rejemy on February 10, 2012 at 9:23 AM

Actually with Ballmer that does count bonus, he took no new stock: http://blogs.wsj.com/digits/2011/10/04/m…

However, he does own ~333 million shares of MSFT, so his yearly dividend payments are now sitting at $266.4 Million, so I don't think he cares about his direct compensation.

Posted by pragmatic on February 10, 2012 at 9:25 AM

Its nice to see a rich man like Warren Buffet not being greedy with his paycheck. I wish marketing paid as much as being a CEO lol!

Posted by marketing guru on February 10, 2012 at 9:28 AM

Its nice to see a rich man like Warren Buffet not being greedy with paycheck....if only people could as much money in marketing as CEOs...that would be the life lol!

Posted by marketing guru on February 10, 2012 at 9:32 AM

@3, @4 - if comment spam is your idea of marketing, you're overpaid at whatever your salary.

Posted by shabadoo on February 10, 2012 at 9:35 AM

1) i did not understand how that was possible when, as 2 points out, ballmer made more than 1,300,000.

Posted by Charles Mudede on February 10, 2012 at 9:46 AM

I guess they don't count dividends from stock already owned - just new stock and option grants.

Posted by rejemy on February 10, 2012 at 10:05 AM

Since when does Microsoft have employees? The median skews so high because nobody is counting the dash trash.

Posted by SchmuckyTheCat on February 10, 2012 at 10:28 AM

@8 is correct.

Posted by Will in Seattle

on February 10, 2012 at 10:46 AM

#1 is incorrect there are many, many unvested perks --- i.e., unfunded future obligations --- which aren't obvious and recorded different in financial reporting.

Ever heard of SERPs??? QSERPs??? Sometimes worth as much as $91 million to over $200 million?

Money uncounted......and many securitized streams pour into those SERPs, beginning with securitized student loans, and the SERPs in turn are themselves securitized.

Posted by sgt_doom on February 10, 2012 at 10:51 AM

@8 nails it; count the temps at MS and that CEO ratio skyrockets.

Posted by sloegin on February 10, 2012 at 11:16 AM

8, excellent point.

Posted by Charles Mudede on February 10, 2012 at 11:24 AM

Also, they're looking at median worker pay, not the lowest paid worker. I can buy that developers, managers, and marketers at Microsoft make enough money to skew the median pretty damn high, certainly higher than WalMart's jaw-dropping $22,700 median. I mean, Jesus Christ, that means half their employees make less than that.

Posted by keshmeshi on February 10, 2012 at 12:33 PM