Companies With Big Gaps Between CEO and Worker Pay

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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.

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