Companies With Big Gaps Between CEO and Worker Pay

Photo (cc) by pictures of money

The CEO of McDonald’s earned $644 for every $1 the chain’s average worker earned last year, a pay ratio of 644 to 1.

That ratio topped the list in a Bloomberg Business analysis of companies that rank high for their 2014 CEO-to-worker pay ratios.

Many public companies are being required by federal law to disclose how CEO pay compares with workers’ median pay. But the pay-ratio rule, approved by the U.S. Securities and Exchange Commission last week, does not go into effect until 2017.

In 2014, McDonald’s then-chief executive, Don Thompson (who stepped down in March of this year), earned a total compensation of $7.29 million, while the average McDonald’s worker earned $11,324.

The McDonald’s pay ratio will probably differ by the time the new law — which stemmed from the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act — takes effect, however.

In July, McDonald’s instituted an increase in pay and perks for some 90,000 workers, including boosting the wages at company-owned restaurants to $1 more than the local minimum wage.

Bloomberg ranked Community Health Systems No. 2 in pay disparity. Wayne Smith, chief executive officer, earned $26.44 million last year. The company’s pay ratio is lower than McDonald’s, at 414 to 1, because its average worker earns $63,837.

John Engler, president of the Business Roundtable, a trade group that opposes the pay-ratio rule disclosures, tells Bloomberg:

“I suppose the McDonald’s CEO, who has a lot of people working in McDonald’s restaurants, would have a big ratio and would have a lot of people at the bottom end.”

The companies in Bloomberg’s top five are:

  • McDonald’s (pay-gap ratio of 644 to 1)
  • Community Health Systems (414)
  • Universal Health Services (329)
  • Priceline (294)
  • Carmike Cinemas (276)

To view the figures for all of the companies ranked by Bloomberg, click on the link above.

Are you surprised by the McDonald’s pay ratio? Share your thoughts with us below or on our Facebook page.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

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