And some firms seem a little embarrassed.
WASHINGTON ― A moment that corporate executives may have dreaded for years has finally arrived.
As Congress chips away at bank regulations established by the 2010 Dodd-Frank law, another part of the measure is exposing the extreme income inequality between bosses and their workers.
The law requires publicly traded companies to calculate the ratio of their chief executive officer’s compensation to the median pay of the companies’ employees. After a series of delays, firms are finally disclosing their pay ratios in filings with the Securities and Exchange Commission.
Some of the numbers are shocking. The staffing firm ManpowerGroup paid its chief executive $11.9 million last year ― 2,483 times the average employee’s earnings. The firm noted in its disclosure that most of its employees are temps who work only part of the year, making just $4,828 on average.
ManpowerGroup’s ratio is the most lopsided of any disclosed as of Tuesday morning, according to Proxy Insight, a company that tracks SEC disclosures for investors. Excluding firms with no employees, the average ratio among the more than 263 disclosures to date is 77 to 1, with CEO pay averaging $7.2 million compared to $93,000 for the typical worker.
Other notable ratios for big firms include the appliance maker Whirlpool Corporation, which paid its CEO 356 times what it paid its average worker, and the health insurance company Humana, whose top executive earned 344 times more than the median salary for employees.
The disclosures come as Democrats and Republicans wage a rhetorical battle over who benefits most from the massive corporate tax cut President Donald Trump signed into law late last year. While Republicans have touted modest bonuses several million workers have received from various companies, Democrats have kept a running tally of share buybacks, which inflate the value of a company’s stock and enrich executives. Stock awards represent a substantial portion of executive compensation.
Companies have long disclosed executive pay as part of their SEC filings, but what’s new is the requirement that they also own up to what they pay their rank and file. Paired together, the numbers can serve as a barometer for economic inequality within particular firms.