How Does Your Pay Stack Up?
Public firms in the S&P 500 now generally disclose how much they pay employees.
The median wage across all the groups in the feature image is about $69,000.
The median pay for the consumer group alone is about $35,000.
For an interactive graph that shows where you stand, please see How Does Your Pay Stack Up?
Walmart CEO vs Median Take Home Pay
The Wall Street Journal has a seemingly shocking headline: At Walmart, the CEO Makes 1,188 Times as Much as the Median Worker.
Walmart is one of the largest private employers with more than 2.3 million employees world-wide and around 1.5 million in the U.S. The figures include both full-time and part-time workers.
Walmart disclosed the pay ratio as part of a broader requirement of the postcrisis Dodd-Frank law that went into effect this year.
Among the 18 retailers that have reported this data so far, Walmart’s median pay falls near the middle. By comparison, Amazon.com Inc.’s median worker earns $28,446, while Gap employees fall at the bottom of the group at $5,375.
Retail-industry officials argue that median-pay and pay-ratio figures for their industry shouldn’t be compared with others because the widespread use of part-time and seasonal workers makes both look more extreme. The rules for calculating the figures don’t allow companies to annualize most pay figures.
Bottom Ten
Inability to annualize pay and factor in part-time employees makes the above chart nearly meaningless.
For all the bashing of Walmart, $19,177 seems like a reasonable number, especially the way it’s calculated.
The median Walmart employee makes 273% of the median McDonald’s employee.
But what is the median McDonald’s employee really worth?
Mike “Mish” Shedlock
lol!
For a company the size of Walmart, whether the one CEO makes $20 or $20million, is no more than a great big roundoff. He’s making $10 for each employee working there. Very few workers kick that little up to the dude upstairs. May as well pay the guy enough so that he tells his secretary to screen headhunter calls.
While with 2+ million workers, every penny/hour for the median guy, quickly starts adding up to something meaningful. Doubly so at a place like Walmart, where every single store is accounted for as an independent profit center; hence need to keep an eye on costs at much finer granularity than at the level of the entire corporation.
From a Walmart worker’s POV, they pay plenty more than the $10 that goes to the CEO in taxes. And are, at the current rate, being debased out of 1000-2000 a year by direct printing. A few thousands in purely regulatorily imposed overcharges for medical care. Another pile to sustain the nonsense that is zoning laws preventing housing from being reasonable. Some 1000s in overpriced “education” for their kids. Some more for subsidizing the FIRE racketeers via mandated “insurance,” as well as commissions to idiots hawking “investments” that only exists at all on account of the above mentioned persistent debasement etc., etc. …..So it’s not as if whatever the Walmart CEO happens to be making, is some sort of grand contributor to the median employee’s economic woes. Blow away the rest of the leeches mentioned, replace them with a suitable bomb crater, and the median Walmart’er would be doing perfectly fine, regardless of what the CEO took home.
Whatever the number is, regardless whether it is being properly calculated, wealth is concentrating more and more to the top 1%, creating an extreme condition, which is going to backfire. Extremes lead to opposite extremes.
It pays to major in computer science. Facebook employee median salary is $240,000. And that is just salary, not including stock benefits. That means 50% of the employees at Facebook make OVER $240k a year.
Yeah, like the all children in Lake Wobegon 🙂
Everyone should make more than the median.
Another consideration is that in addition to the CEO, there are at least 39 other Walmart executives according to their corporate website. How much is this total compensation, including deferred and perks? I don’t know if there’s an easy way to find that out. It took a divorce proceeding for investors to find out all the compensation being given to former GE CEO Jack Welch.
Nearly half of GE’s profit was coming from financial wheeling and dealing when this Newsweek article was published. Jack Welch looked really smart then, ignoring R&D in the businesses that pulled the GE wagon. There were many good managers within GE who didn’t share Jack’s worldview. We know now who was right.
I recall the stories about Jack Welch’s compensation that was revealed via divorce documents. It seems that CEO envy is at least as great among fellow CEOs as it is among non-executive workers. “Soon CEOs were waving Welch’s deal in front of their own boards, demanding similar treatment, pay consultants and corporate directors tell NEWSWEEK. While no CEO admits to mimicking Welch’s contract, the executive elite began getting similar deals.” link to newsweek.com
Exactly, lower level compensation is adjusted downward till no one applies for the job. Why not the CEO position as well. I would have been happy to apply for CEO of the old GM for a mere one million dollars annual. I would have been just as capable of running the company into bankruptcy too.
If you bickering fools knew how to trade stocks and had any money you would see this as a non issue. I mean who really gives a hoot.
Yeah, I worked directly for, or very closely with, six CEOs during the course of my career in high tech and used to hold your view. No more. Whether deliberately or by default, CEO comp has gone wild in recent years; it’s become ‘CEO comp engineering.’ Either it’s reined in voluntarily before the socialist/collectivists arrive and ‘fix’ it with a wreck, or something has to be done to put backbone in and strengthen the role of comp committees. Call it social engineering if you like, but if the boards and comp committees had to publicly defend, at the annual stockholder’s meeting, why they paid the CEO that last $10 million above, for instance, 200 times the median employee’s pay and which hammered equity by, say, an additional $20 million because of the tax hit, there’d be a hell of a different debate among comp committee members before approving it than there is today. There are no perfect and indispensable CEOs; there are many who think themselves so. Their comp committees agree.
Fascism: Isn’t it interesting that a major corporation which makes all its big investments by a competitive bidding process pays its executives by a non-competitive process? Well, not exactly non-competitive — all the executive compensation committees want to pay their guy in the top quartile of comparables, setting in motion an inexorable upward drive.
How about corporations behaving like capitalists, instead of crony capitalists? Bid out the job of CEO! If the current holder demands $X Million, and someone else will do the job for ($X – 10%) Million, we would be heading in the right direction.
And please, let’s see shareholders end the horrible practice of Golden Parachutes which reward failure by executives.
I have pointed out similar things many times. You are one of the few I have seen that understand this.
Not only that, but the “pay” is actually **compensation**. The majority of that comes from stock or stock options. It is not a cash payout that otherwise would have gone to the workers. It is a cost borne by shareholders. Of McMillon’s $22.4 million in compensation $15.2 million of it was restricted stock.
This is about envy, not a realistic look at an area where money could be freed up to pay workers more.
Once you start to automate jobs away, the ratio will improve. Are we better off with fewer jobs and higher unemployment when ratios are ‘improved’?
So I can only assume that you using the Koch Brothers as an example of success because they are “Gurus”? LOL Look into their past and present and then make the argument that it is because of that
It also leads to numerous another questions. Are the organizations larger than in the past, representing larger portions of the economy? As the world grows more complex, are organizations more stratified, and more decision-centric, with the work force divided between the masses, who have simple jobs and are easily replaced, and the select few at the other extreme that make critical decisions responsible for the success or failure of the organization?
Walmart has about 480 billion in revenue , profit of around 14 billion. His pay is about .157% of profits. If the CEO wrote a $10 check to each employee, out of his own pocket, he would not have any income. I think it’s important to keep things in perspective.
Yes, that is Precisely the problem. The comp committee invariably becomes the CEO’s compensation praetorian guard; it’s just human nature at work. I.e., we hired this guy as our CEO and he’s amazing; if you don’t believe us, just look at how much we’re paying him. The comp committees, as a group, need outside help to stop this runaway train. Progressive taxation at the corporate pre-tax level for any/all comp of any employee above x times corporate median pay would be a good start.
Whether one is religious or not, most would agree with the 10 Commandments and the golden rule of treating others the way we want to be treated. These common sense lessons include the 10th Commandment – thou shall NOT covet thy neighbor’s house, or anything else that belongs to your neighbor. Maybe this is why the majority of Democrats are not religious.
This is what happens when you open your markets to third world countries. Corporations get rich and workers get poor.
That depends on the circumstances. If you own your house outright, and are getting 20K a year in interest, and have health insurance, then a $25/hr job is adequate. It is not the same situation for someone who has to pay $1000 rent, has little or no savings and has to pay high premiums for health insurance.
I think he is lamenting that the Walmart ratio is not as high as it is for McDonald’s. And he proposes “achieving” that by passing right-work-for-peanuts laws all over the country.
Without commenting on whether this kind of gap is fair, right, smart, etc. is to note that the gap itself has increased substantially over time, which begs the question — Are the CEOs of today that much better than the CEOs of days past?
A great deal of misery is caused by comparing self with others. I’m happy with my pay rate of $25/hr, and have a wonderful lifestyle provided by that income. Then I read about someone making $50/hr and suddenly my pay rate is “substandard” and my lifestyle sucks.
CEO pay is a result of poor corporate governance. Corporate boards get taken over by CEOs and represent the CEO instead of shareholders. Secondly, there are a number of companies that track employee pay in different job types in every market in the country. When someone leaves our company, we can, through a subscription, go online and see what other businesses in the community are paying for that job. We always open the job on the lower end of that range. Everyone else does to. It’s how we keep from competing on pay and driving up wages. It’s been extremely effective.
Bosses sure are worth every penny…or so they think.
What is a median CEO really worth????